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 811-04642
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The Phoenix Edge Series Fund
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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)
Kathleen A. McGah, 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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Registrant's telephone number, including area code: (800) 541-0171
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Date of fiscal year end: December 31
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Date of reporting period: December 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.
[GRAPHIC OMITTED]
PHOENIX
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ANNUAL REPORT
THE PHOENIX EDGE
SERIES FUND
VARIABLE PRODUCTS FUND
DECEMBER 31, 2007
TABLE OF CONTENTS
PAGE
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A Message from the President........................................................................................ 1
Glossary............................................................................................................ 2
Disclosure of Fund Expenses......................................................................................... 6
SCHEDULE OF
SERIES SUMMARY INVESTMENTS
Phoenix Capital Growth Series....................................... 8 44
Phoenix Growth and Income Series.................................... 10 46
Phoenix Mid-Cap Growth Series....................................... 12 49
Phoenix Money Market Series......................................... 14 51
Phoenix Multi-Sector Fixed Income Series............................ 16 52
Phoenix Multi-Sector Short Term Bond Series......................... 18 60
Phoenix Strategic Allocation Series................................. 20 66
Phoenix-Aberdeen International Series............................... 22 74
Phoenix-Alger Small-Cap Growth Series............................... 24 76
Phoenix-Duff & Phelps Real Estate Securities Series................. 26 78
Phoenix-S&P Dynamic Asset Allocation Series:
Aggressive Growth................................................. 28 79
Phoenix-S&P Dynamic Asset Allocation Series: Growth................. 30 80
Phoenix-S&P Dynamic Asset Allocation Series: Moderate............... 32 81
Phoenix-S&P Dynamic Asset Allocation Series:
Moderate Growth................................................... 34 82
Phoenix-Sanford Bernstein Mid-Cap Value Series...................... 36 83
Phoenix-Sanford Bernstein Small-Cap Value Series.................... 38 85
Phoenix-Van Kampen Comstock Series.................................. 40 87
Phoenix-Van Kampen Equity 500 Index Series.......................... 42 89
Statement of Assets and Liabilities................................................................................. 96
Statement of Operations............................................................................................. 100
Statement of Changes In Net Assets.................................................................................. 104
Financial Highlights................................................................................................ 110
Notes to Financial Statements....................................................................................... 116
Report of Independent Registered Public Accounting Firm............................................................. 125
Board of Trustees' Consideration of Investment Advisory and Subadvisory Agreements.................................. 127
Fund Management Tables.............................................................................................. 163
PROXY VOTING PROCEDURES AND VOTING RECORD (FORM N-PX)
The advisor and subadvisors vote proxies relating to portfolio securities in accordance with procedures that have been
approved by the Fund's Board of Trustees. You may obtain a description of these procedures, along with information
regarding how the series voted proxies during the most recent 12-month period ended June 30, 2007, free of charge, by
calling toll-free 800-541-0171. This information is also available through the Securities and Exchange Commission's
website at http://www.sec.gov.
FORM N-Q INFORMATION
The Fund 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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Not FDIC Insured No Bank Guarantee May Lose Value
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A MESSAGE FROM THE PRESIDENT
Dear Phoenix Edge Series Fund Shareholder:
[PHOTO OF PHILIP K. POLKINGHORN]
This report provides performance and portfolio details about the underlying
investments of your Phoenix variable annuity or life insurance policy for the
fiscal year ended December 31, 2007. I hope you will take time to review this
important information.
At Phoenix, we are committed to providing you with a choice of quality
investment options from professional money managers across the industry,
including many well-known names. In addition to The Phoenix Edge Series Fund
options discussed in this report, we also offer a selection of other investment
options for your consideration.
You may wish to visit our Web site, phoenixwm.com, to learn more about the
variable investments available to you, which may include new offerings from time
to time. Also, if you haven't done so, this is a good time of year to meet with
your financial professional to review your portfolio and make sure that your
asset allocation strategy is consistent with your financial goals, especially if
there have been any recent changes in your personal situation.
We appreciate your business and thank you for choosing Phoenix to be part of
your financial plan. It is our great privilege to serve you.
Sincerely yours,
/s/ Philip K. Polkinghorn
Philip K. Polkinghorn
President, The Phoenix Edge Series Fund
JANUARY 2008
Asset Allocation does not guarantee against a loss, and there is no guarantee
that a diversified portfolio will outperform a non-diversified portfolio.
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.
AMBAC
American Municipal Bond Assurance Corporation.
COMPOSITE INDEX FOR STRATEGIC ALLOCATION SERIES
A composite index made up of 60% of the S&P 500 Index, which measures stock
market total return performance, and 40% of the Lehman Brothers Aggregate Bond
Index, which measures bond market total return performance.
COMPOSITE INDEX FOR S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH
A composite index made up of 75% of the S&P 500 Index, which measures stock
market total return performance, 8% of the Lehman Brothers Aggregate Bond Index,
which measures bond market total return performance, and 17% of the MSCI EAFE
Index, which measures foreign market equity performance.
COMPOSITE INDEX FOR S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH
A composite index made up of 60% of the S&P 500 Index, which measures stock
market total return performance, 27% of the Lehman Brothers Aggregate Bond
Index, which measures bond market total return performance, and 13% of the MSCI
EAFE Index, which measures foreign market equity performance.
COMPOSITE INDEX FOR S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH
A composite index made up of 50% of the S&P 500 Index, which measures stock
market total return performance, 40% of the Lehman Brothers Aggregate Bond
Index, which measures bond market total return performance, and 10% of the MSCI
EAFE Index, which measures foreign market equity performance.
COMPOSITE INDEX FOR S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE
A composite index made up of 30% of the S&P 500 Index, which measures stock
market total return performance, 65% of the Lehman Brothers Aggregate Bond
Index, which measures bond market total return performance, and 5% of the MSCI
EAFE Index, which measures foreign market equity performance.
ETF (EXCHANGE TRADED FUND)
A Fund that tracks an index, but can be traded like a stock.
FEDERAL RESERVE (THE "FED")
The central bank of the United States, responsible for controlling the money
supply, interest rates and credit with the goal of keeping the U.S. economy and
currency stable. Governed by a seven-member board, the system includes 12
regional Federal Reserve Banks, 25 branches and all national and state banks
that are part of the system.
FGIC
Financial Guaranty Insurance Company.
FHLB
Federal Home Loan Bank.
FHLMC
Federal Home Loan Mortgage Corporation.
FNMA OR "FANNIE MAE"
Federal National Mortgage Association.
FSA
Financial Security Assurance, Inc.
FTSE NAREIT EQUITY REITS INDEX
The FTSE NAREIT Equity REITs Index is a free-float market capitalization-
weighted index measuring equity tax-qualified real estate investment trusts,
which meet minimum size and liquidity criteria, that are listed on the New York
Stock Exchange, the American Stock Exchange and the NASDAQ National Market
System. The index is calculated on a total return basis with dividends
reinvested.
LEHMAN BROTHERS AGGREGATE BOND INDEX
The Lehman Brothers Aggregate Bond Index measures the U.S. investment grade
fixed rate bond market. The index is calculated on a total return basis.
MBIA
Municipal Bond Insurance Association.
MERRILL LYNCH 1-2.99 YEAR MEDIUM QUALITY CORPORATE BONDS INDEX
The Merrill Lynch 1-2.99 Year Medium Quality Corporate Bonds Index measures
performance of U.S. investment grade corporate bond issues rated "BBB" and "A"
by Standard & Poor's/Moody's with maturities between one and three years. The
index is calculated on a total return basis.
2
GLOSSARY (CONTINUED)
MSCI ASIA EXCLUDING JAPAN TOTAL RETURN INDEX
The MSCI AC (All Country) Far East ex Japan Index is a free float-adjusted
market capitalization weighted index that is designed to measure the equity
market performance of the Far East, excluding Japan. As of June 2007 the MSCI AC
Far East ex Japan Index consisted of the following 9 developed and emerging
market country indices: China, Hong Kong, Indonesia, Korea, Malaysia,
Philippines, Singapore Free, Taiwan, and Thailand.
MSCI EAFE(R) INDEX
The MSCI EAFE(R) Index 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 gross dividends
reinvested.
MSCI EASTERN EUROPE TOTAL RETURN INDEX
The MSCI EM (Emerging Markets) Europe, Middle East and Africa Index is a free
float-adjusted market capitalization weighted index that is designed to measure
the equity market performance of the emerging market countries of Europe, the
Middle East & Africa. As of June 2007, the MSCI EM EMEA Index consisted of the
following 10 emerging market country indices: Czech Republic, Hungary, Poland,
Russia, Turkey, Israel, Jordan, Egypt, Morocco, and South Africa.
MSCI EMU TOTAL RETURN INDEX
The MSCI EMU (European Economic and Monetary Union) Index is a free
float-adjusted market capitalization weighted index that is designed to measure
the equity market performance of countries within EMU. As of June 2007 the MSCI
EMU Index consisted of the following 11 developed market country indices:
Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the
Netherlands, Portugal, and Spain.
MSCI EUROPE TOTAL RETURN INDEX
The MSCI Europe Index is a free float-adjusted market capitalization weighted
index that is designed to measure the equity market performance of the developed
markets in Europe. As of June 2007, the MSCI Europe Index consisted of the
following 16 developed market country indices: Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
MSCI JAPAN INDEX
The MSCI Japan Index(SM) is an equity index of securities listed on Japanese
stock exchanges. The index is calculated on a total return basis with gross
dividends reinvested.
MSCI LATIN AMERICA TOTAL RETURN INDEX
The MSCI EM (Emerging Markets) Latin America Index is a free float-adjusted
market capitalization weighted index that is designed to measure the equity
market performance of emerging markets in Latin America. As of June 2007 the
MSCI EM Latin America Index consisted of the following 6 emerging market country
indices: Argentina, Brazil, Chile, Colombia, Mexico, and Peru.
MSCI WORLD EXCLUDING U.S. TOTAL RETURN INDEX
The MSCI World Index is a free float-adjusted market capitalization weighted
index that is designed to measure the equity market performance of developed
markets. As of June 2007 the MSCI World Index consisted of the following 23
developed market country indices: Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands,
New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United
Kingdom, and the United States.
PIK (PAYMENT-IN-KIND)
A bond which pays interest in the form of additional bonds, or preferred stock
which pays dividends in the form of additional preferred stock.
REIT (REAL ESTATE INVESTMENT TRUST)
A publicly traded company that owns, develops and operates income-producing real
estate such as apartments, office buildings, hotels, shopping centers and other
commercial properties.
RUSSELL 1000(R) GROWTH INDEX
The Russell 1000(R) Growth Index is a market capitalization-weighted index of
growth-oriented stocks of the 1,000 largest companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total return basis with dividends reinvested.
RUSSELL 1000(R) VALUE INDEX
The Russell 1000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the 1,000 largest companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total return basis with dividends reinvested.
3
GLOSSARY (CONTINUED)
RUSSELL 2000(R) GROWTH INDEX
The Russell 2000(R) Growth Index is a market capitalization-weighted index of
growth-oriented stocks of the smallest 2,000 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total return basis with dividends reinvested.
RUSSELL 2000(R) VALUE INDEX
The Russell 2000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the smallest 2,000 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total return basis with dividends reinvested.
RUSSELL 2500(TM) VALUE INDEX
The Russell 2500(TM) Value Index is a market capitalization-weighted index of
value-oriented stocks of the smallest 2,500 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total return basis with dividends reinvested.
RUSSELL MIDCAP(R) GROWTH INDEX
The Russell MidCap(R) Growth Index is a market capitalization-weighted index of
medium-capitalization, growth-oriented stocks of U.S. companies. The index is
calculated on a total return basis with dividends reinvested.
SBA
Small Business Administration.
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 (AMERICAN DEPOSITARY RECEIPT)
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 ACTIVE MANAGEMENT OF
AN ACTUAL PORTFOLIO.
4
THIS PAGE INTENTIONALLY BLANK.
THE PHOENIX EDGE SERIES FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
FOR THE SIX-MONTH PERIOD OF JULY 1, 2007 TO DECEMBER 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 of
The Phoenix Edge Series Fund, you incur ongoing costs including investment
advisory fees and other expenses. These examples are intended to help you
understand your ongoing costs (in dollars) of investing in one of the series 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
This section 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.
The expense estimate does not include the fees or expenses associated with the
separate insurance accounts, and if such charges were included, returns would be
lower.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
This section of the accompanying tables provides information about
hypothetical account values and hypothetical expenses based on the series'
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not your series' 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 series 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 additional fees and
expenses associated with the annuity or life insurance policy through which you
invest. Therefore, this 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 the annuity or life insurance
policy 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 Annualized Expenses Paid
Account Value Account Value Expense During
7/1/07 12/31/07 Ratio Period*
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CAPITAL GROWTH SERIES
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ACTUAL $1,000.00 $1,017.88 0.91% $4.63
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,020.56 0.91 4.65
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GROWTH AND INCOME SERIES
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ACTUAL $1,000.00 $ 998.09 0.85% $4.28
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,020.87 0.85 4.34
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MID-CAP GROWTH SERIES
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ACTUAL $1,000.00 $1,049.44 1.05% $5.42
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,019.85 1.05 5.36
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MONEY MARKET SERIES
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ACTUAL $1,000.00 $1,024.61 0.59% $3.01
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,022.19 0.59 3.01
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MULTI-SECTOR FIXED INCOME SERIES
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ACTUAL $1,000.00 $1,022.49 0.75% $3.82
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,021.38 0.75 3.83
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MULTI-SECTOR SHORT TERM BOND SERIES
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ACTUAL $1,000.00 $1,020.23 0.70% $3.56
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,021.63 0.70 3.57
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STRATEGIC ALLOCATION SERIES
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ACTUAL $1,000.00 $1,015.68 0.86% $4.37
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,020.82 0.86 4.39
* Expenses are equal to the Series' annualized expense ratio which includes
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
365 days to reflect the one-half year period.
You can find more information about the Series' expenses in the Financial
Statements section that follows. For additional information on operating
expenses and other shareholder costs including contractual charges associated
with the separate account refer to the series prospectus and the contract
prospectus.
6
THE PHOENIX EDGE SERIES FUND
DISCLOSURE OF FUND EXPENSES (UNAUDITED) (CONTINUED)
FOR THE SIX-MONTH PERIOD OF JULY 1, 2007 TO DECEMBER 31, 2007
EXPENSE TABLE
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Beginning Ending Annualized Expenses Paid
Account Value Account Value Expense During
7/1/07 12/31/07 Ratio Period*
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ABERDEEN INTERNATIONAL SERIES
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ACTUAL $1,000.00 $1,048.86 0.98% $5.06
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,020.20 0.98 5.00
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ALGER SMALL-CAP GROWTH SERIES
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ACTUAL $1,000.00 $1,036.63 1.00% $5.13
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,020.10 1.00 5.10
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DUFF & PHELPS REAL ESTATE SECURITIES SERIES
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ACTUAL $1,000.00 $ 913.58 1.00% $4.82
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,020.10 1.00 5.10
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S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH
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ACTUAL $1,000.00 $1,000.86 0.70% $3.53
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,021.63 0.70 3.57
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S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH
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ACTUAL $1,000.00 $1,012.16 0.70% $3.55
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,021.63 0.70 3.57
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S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE
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ACTUAL $1,000.00 $1,039.69 0.70% $3.60
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,021.63 0.70 3.57
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S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH
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ACTUAL $1,000.00 $1,025.21 0.70% $3.57
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,021.63 0.70 3.57
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SANFORD BERNSTEIN MID-CAP VALUE SERIES
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ACTUAL $1,000.00 $ 891.06 1.30% $6.20
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,018.57 1.30 6.64
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SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
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ACTUAL $1,000.00 $ 878.16 1.30% $6.15
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,018.57 1.30 6.64
EXPENSE TABLE
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Beginning Ending Annualized Expenses Paid
Account Value Account Value Expense During
7/1/07 12/31/07 Ratio Period*
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VAN KAMPEN COMSTOCK SERIES
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ACTUAL $1,000.00 $ 921.26 0.95% $4.60
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,020.36 0.95 4.85
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VAN KAMPEN EQUITY 500 INDEX SERIES
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ACTUAL $1,000.00 $ 983.01 0.55% $2.75
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
1,000.00 1,022.40 0.55 2.81
* Expenses are equal to the Series' annualized expense ratio which includes
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
365 days to reflect the one-half year period.
You can find more information about the Series' expenses in the Financial
Statements section that follows. For additional information on operating
expenses and other shareholder costs including contractual charges associated
with the separate account refer to the series prospectus and the contract
prospectus.
7
CAPITAL GROWTH SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX CAPITAL GROWTH SERIES ("CAPITAL GROWTH") Seeks intermediate and
long-term capital appreciation, with income as a secondary consideration.
[ ] For the 12-month reporting period, the Series returned 10.75%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49% and
the Russell 1000(R) Growth Index, the Series' style-specific benchmark,
returned 11.81%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN ABOVE.
HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR?
[ ] The four quarters of 2007 experienced significant shifts in economic
expectations. In the first quarter of 2007 the market's focus became the
subprime mortgage issues, and the widespread impact. The result being the
toll taken on financial stocks, resulting in a volatile and flat equity
market. Second quarter '07 experienced thriving merger and acquisition
activity, despite rising inflationary (commodity driven) fears, interest
rates, and the continued deterioration of the housing markets. Third quarter
of '07 experienced a liquidity freeze-up and credit-market meltdown which
led to a volatile quarter. Investors reassessed their appetite for risk, as
mergers and acquisitions activity came to a near standstill. These pressures
and issues inspired the Federal Reserve to lower interest rates, leading to
a rally, yet overall equity market sectors posted mixed results. During this
period, as Hedge funds were forced to unwind leveraged positions (sell long
holdings and cover short positions) to raise liquidity, investment
strategies focusing on attractive valuations and higher quality suffered.
Many of the same themes which impacted returns in the third quarter
continued to negatively impact the U.S. equity markets during fourth quarter
'07 as well. Most notably, the uncertainty surrounding the real estate and
subprime mortgage markets intensified, leading to further doubt as to
whether the ever-resilient consumer will be able to keep the economy free
from recession in 2008. Further, energy prices continued on their upward
path, resulting in a further cut of the consumer wallet. The Fed is doing
its best trapeze act -- trying to balance inflation and economic weakness.
In all, these fears, issues and uncertainties have led to a volatile market
environment. Over the year, growth stocks generally outperformed value.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR?
[ ] Overall, sector allocation proved very additive to returns due primarily to
being underweight in the Consumer Discretionary Sector and overweight in the
Materials and Energy Sectors. However, selective stock holdings detracted
from returns, primarily within the Industrials and Information Technology
Sectors.
[ ] Apple, a computer, digital music and mobile communications equipment
manufacturer; Freeport-McMoRan, a metals mining and manufacturing company;
Celanese, an industrial chemical provider; and Oracle, an enterprise
software provider were the top contributors during the year. Detracting from
performance were Continental Airlines, an air carrier; Electronic Data
Systems, an electronic data processing provider; Watson Pharmaceuticals, a
generic and branded pharmaceutical products company and WellCare Group, a
managed healthcare provider.
[ ] Looking ahead to 2008, investors will continue to weigh the severity of any
potential economic slowdown, the Federal Reserve's stance on inflationary
pressures, the impact of the mortgage and real estate markets, the trend in
both energy prices and the dollar, the level and outlook for employment, and
overall, the affects felt by the consumer. We strongly believe that over the
long-term, what matters most is the earnings growth and valuation of
individual companies. Our investment process mirrors this view, with a
continued focus on quality companies exhibiting improving fundamentals,
attractive valuations and positive investor interest. We remain confident
that the consistent application of our disciplined investment process will
continue to produce superior results over the long term.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
BECAUSE THE SERIES IS HEAVILY WEIGHTED IN THE TECHNOLOGY SECTOR, IT WILL BE
IMPACTED BY THAT SECTOR'S PERFORMANCE MORE THAN A SERIES WITH BROADER SECTOR
DIVERSIFICATION.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
8
CAPITAL GROWTH SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------
1 year 5 years 10 years
- --------------------------------------------------------------------------------
CAPITAL GROWTH SERIES 10.75% 9.50% 0.71%
- --------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.92
- --------------------------------------------------------------------------------
RUSSELL 1000(R) GROWTH INDEX 11.81 12.11 3.83
- --------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 0.92%; NET: 0.92%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/97. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES AS FOLLOWS:
Capital Growth Series S&P 500(R) Index Russell 1000(R) Growth Index
12/97 $10,000 $10,000 $10,000
12/98 13,001 12,876 13,871
12/99 16,859 15,597 18,470
12/00 13,863 14,164 14,328
12/01 9,070 12,482 11,402
12/02 6,820 9,723 8,223
12/03 8,626 12,515 10,669
12/04 9,055 13,875 11,341
12/05 9,391 14,558 11,938
12/06 9,693 16,856 13,021
12/07 10,735 17,782 14,559
SECTOR WEIGHTINGS as of 12/31/07*
- -----------------------------------------------------
- -----------------------------------------------------
Information Technology 31%
- -----------------------------------------------------
Health Care 19
- -----------------------------------------------------
Industrials 12
- -----------------------------------------------------
Energy 9
- -----------------------------------------------------
Consumer Discretionary 7
- -----------------------------------------------------
Materials 7
- -----------------------------------------------------
Consumer Staples 6
- -----------------------------------------------------
Other (includes short-term investments) 9
- -----------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
9
GROWTH AND INCOME SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX GROWTH AND INCOME SERIES ("GROWTH AND INCOME") Seeks dividend
growth, current income and capital appreciation.
[ ] For the 12-month reporting period the Series returned 6.66%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The return of volatility was the key theme for the year. After posting new
highs for the S&P 500 in early October, stocks turned lower on credit issues
tied to subprime mortgages. The mortgages had been dissected and repackaged
into securities held by large banks, brokers and insurance companies. When
the low teaser rates on the mortgages reset, homeowners could no longer make
their payments and the instruments defaulted. This resulted in a huge credit
squeeze, causing the Fed to begin lowering interest rates in order to steer
the economy away from falling into a recession. There were billion dollar
write-downs of investments and several CEOs were fired.
Also affecting the markets was a rise in the price of crude oil and a sharp
decline in the value of the U.S. Dollar. Because of these issues, the United
States equity markets posted mixed returns for the calendar year 2007.
The fund's benchmark, the Standard & Poor's 500, is a representative index
for large capitalization stocks and it returned 5.49%. The small cap
benchmark, Russell 2000, posted a loss of 1.57%. In terms of style indices,
Value stocks returned less than Growth stocks for the fiscal year. The
Russell 1000 Value Index had a slight loss of 0.17%, while the Russell 1000
Growth Index had a double-digit gain of 11.81%. With sub-par returns in
broad-based U.S. indices, the real action was in overseas emerging markets
stocks. The MSCI Emerging Markets index posted a huge gain of 39.78%. We did
not participate in this market because emerging foreign companies are not in
our investment universe.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] Performance for the year was favorable. The Growth & Income Series returned
6.66%. The investment portfolio return was 117 basis points higher than the
5.49% total return for the fund's benchmark, the Standard & Poor's 500.
In relation to the benchmark index, the fund benefited the most from sector
positioning in Financials, Consumer Discretionary and Health Care. Sector
positioning in Information Technology, Consumer Staples and Materials had an
adverse impact on the funds performance relative to its benchmark. The top
five individual stock contributors were Exxon Mobil, Occidental Petroleum,
Microsoft, AT&T and National Oilwell Varco. The bottom five contributors
were Citigroup, Bank of America, Merrill Lynch, American International Group
and Tyco.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING INTERNATIONALLY INVOLVES RISKS NOT ASSOCIATED WITH INVESTING
SOLELY IN THE U.S., SUCH AS CURRENCY FLUCTUATION, POLITICAL RISK,
DIFFERENCES IN ACCOUNTING AND THE LIMITED AVAILABILITY OF INFORMATION.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
10
GROWTH AND INCOME SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- ------------------------------------------------------------------------------------------
Inception Inception
1 year 5 years to 12/31/07 Date
- ------------------------------------------------------------------------------------------
GROWTH AND INCOME SERIES 6.66% 13.02% 5.71% 3/2/98
- ------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.18 3/2/98
- ------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 0.97%; NET: 0.91%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07 AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/2/98. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES AS FOLLOWS:
Growth and Income Series S&P 500(R) Index
3/2/98 $10,000 $10,000
12/98 12,045 11,895
12/99 14,093 14,409
12/00 13,162 13,086
12/01 12,087 11,532
12/02 9,366 8,983
12/03 11,938 11,562
12/04 13,189 12,818
12/05 13,822 13,450
12/06 16,197 15,572
12/07 17,275 16,428
SECTOR WEIGHTINGS as of 12/31/07*
- -----------------------------------------------------
- -----------------------------------------------------
Financials 20%
- -----------------------------------------------------
Information Technology 18
- -----------------------------------------------------
Health Care 13
- -----------------------------------------------------
Energy 12
- -----------------------------------------------------
Industrials 11
- -----------------------------------------------------
Consumer Discretionary 9
- -----------------------------------------------------
Consumer Staples 7
- -----------------------------------------------------
Other (includes short-term investments) 10
- -----------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
11
MID-CAP GROWTH SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX MID-CAP GROWTH SERIES ("MID-CAP GROWTH") Seeks capital appreciation.
[ ] For the 12-month reporting period the Series returned 21.80%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49% and
the Russell MidCap(R) Growth Index, the Series' style-specific benchmark,
returned 11.43%.
[ ] ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
For the period of January 1, 2007 through November 2007 Bennett Lawrence
Management, LLC was the sub-advisor for the Phoenix Mid-Cap Growth Edge Series.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
In the following commentary Bennett Lawrence Management, LLC discusses the
performance under their management Series.
[ ] The year started off on a strong note as inflation and interest rate
concerns took a back seat to good earnings reports and reasonable equity
valuations. Beneath the surface, a change in investor preferences had begun.
For the first time in a long while, demand for growth stocks strengthened.
Historically, mid-cycle slowdowns (the stage in the cycle that we appeared
to be in the majority of the year) have tended to favor equities in general
and growth stocks in particular. As a result, earnings visibility became a
most desirable trait and for the first time in seven years, growth stocks
outperformed value.
[ ] Toward the end of the year, worries mounted over housing, a credit crunch
and possible recession. Volatility became pronounced and the averages
started to lose ground. Fortunately, the Federal Reserve had begun a
campaign to restore liquidity to the credit markets. Hopefully this will
provide a counterbalance to the host of issues that are on the minds of
investors and weighing on share prices.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] The combination of strong demand for growth stocks, prescient industry/
sector allocation decisions and strong operating results from our portfolio
companies enabled the Series portfolio to enjoy performance that was over
2.5 times greater than the Russell Midcap Growth Index.
[ ] For the first time in a long while, earnings growth was directly correlated
to share performance. Generally speaking, the better the operating results,
the more impressive the share gains. Needless to say, this was a very good
backdrop for our high-growth investment strategy. In addition, we were
rewarded for overweighting the technology sector, as trends including
electronic payment transfer, e-commerce, software as a service, online
advertising and solar energy were very pervasive. Finally, the overwhelming
majority of our companies delivered operating results that exceeded
consensus estimates and led to positive momentum among the Series' portfolio
holdings.
Neuberger Berman began sub-advising the Portfolio at the end of November 2007.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] In the following commentary Neuberger Berman Management, Inc. discusses the
Series performance since their becoming subadvisor.
[ ] In 2007, Large- and Mid-Cap shares outpaced smaller issues while growth
style results outpaced value across the capitalization spectrum, the first
time since 1999. As the subprime issues continued to work their way through
the system, Financials, a large percentage of the value indices, were among
the weakest performing sectors for the year. Other sectors that were weaker
links included consumer-related areas. Telecom was an area of weakness as
concerns regarding a slowdown in consumer spending negatively impacted the
sector. Mid-Caps were the best performing capitalization bucket for the
year. This was in part due to private equity firms fueling acquisitions in
the Mid-Cap space which impacted the portfolio as we had several take overs
during the year.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] Equity market returns for the year 2007 were for the most part positive and
volatility had been on an up tick for much of the year as subprime issues
continued to unfold throughout the year. As volatility increases, companies
that exhibit earnings quality, which is what we seek to identify in our
process, continue to be rewarded in the marketplace. This type of
environment serves our quality focus well. We continue to believe that
companies that demonstrate the ability to grow earnings on a consistent
basis in this slowing environment will be rewarded as investors will pay up
for this attribute. This was the case for much of 2007 and we believe that
this will continue to be the backdrop for adding value in 2008.
[ ] We remain cautious of areas linked to the average consumer and will
therefore remain market-underweight in both Consumer Staples and
Discretionary. We continue to play niche areas within Consumer Discretionary
such as hotels, gaming and secondary education. The Portfolio continues to
be market weight in Industrials with an emphasis on niche areas such as
aviation. Although slightly underweight at this time, we continue to believe
that Energy will provide earnings growth potential given worldwide demand,
and we anticipate moving toward a neutral weighting opportunistically. Due
to the spread of subprime worries, and especially their effect on
Financials, we will remain underweight in this area at this time. We are
also currently overweighted in both the Health Care and Information
Technology sectors emphasizing medical diagnostics and specialized software
and services, respectively.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING INTERNATIONALLY INVOLVES RISKS NOT ASSOCIATED WITH INVESTING
SOLELY IN THE U.S., SUCH AS CURRENCY FLUCTUATION, POLITICAL RISK,
DIFFERENCES IN ACCOUNTING AND THE LIMITED AVAILABILITY OF INFORMATION.
INVESTING IN THE SECURITIES OF SMALL AND MID-SIZED COMPANIES INVOLVES RISKS,
SUCH AS RELATIVELY LOW TRADING VOLUMES, MORE PRICE VOLATILITY AND LESS
LIQUIDITY THAN SECURITIES FROM LARGER, MORE ESTABLISHED COMPANIES.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
12
MID-CAP GROWTH SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- ------------------------------------------------------------------------------------------------------------
Inception Inception
1 year 5 years to 12/31/07 Date
- ------------------------------------------------------------------------------------------------------------
MID-CAP GROWTH SERIES 21.80% 12.68% 6.44% 3/2/98
- ------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.18 3/2/98
- ------------------------------------------------------------------------------------------------------------
RUSSELL MIDCAP(R) GROWTH INDEX 11.43 17.90 6.95 3/2/98
- ------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.14%; NET: 1.10%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/2/98. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Mid-Cap Growth Series S&P 500(R) Index Russell MidCap(R) Growth Index
3/2/98 $10,000 $10,000 $10,000
12/98 12,175 11,895 10,988
12/99 17,729 14,409 16,624
12/00 20,166 13,086 14,671
12/01 15,068 11,532 11,714
12/02 10,171 8,983 8,504
12/03 13,104 11,562 12,136
12/04 13,984 12,818 14,015
12/05 14,569 13,450 15,710
12/06 15,171 15,572 17,385
12/07 18,478 16,428 19,371
FUND INVESTMENT ALLOCATION as of 12/31/07*
- --------------------------------------------------------
- --------------------------------------------------------
Information Technology 21%
- --------------------------------------------------------
Industrials 16
- --------------------------------------------------------
Health Care 16
- --------------------------------------------------------
Consumer Discretionary 15
- --------------------------------------------------------
Energy 10
- --------------------------------------------------------
Financials 6
- --------------------------------------------------------
Consumer Staples 5
- --------------------------------------------------------
Other (includes short-term investments) 11
- --------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
13
MONEY MARKET SERIES
[ ] PHOENIX MONEY MARKET SERIES ("MONEY MARKET") Seeks as high a level of
current income as is consistent with the preservation of capital and
maintenance of liquidity.
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------
1 year 5 years 10 years
- --------------------------------------------------------------------------------
MONEY MARKET SERIES AT NAV(2) 4.88% 2.65% 3.44%
- --------------------------------------------------------------------------------
LEHMAN BROTHERS AGGREGATE BOND INDEX 6.97 4.42 5.97
- --------------------------------------------------------------------------------
CITIGROUP 90-DAY TREASURY BILLS 4.74 2.95 3.62
- --------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 0.66%; NET: 0.65%.
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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/97. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Money Market Series Lehman Brothers Aggregate Bond Index Citigroup 90-Day Treasury Bills
12/97 $10,000 $10,000 $10,000
12/98 10,509 10,869 10,505
12/99 11,016 10,779 11,003
12/00 11,681 12,032 11,658
12/01 12,127 13,048 12,135
12/02 12,299 14,387 12,342
12/03 12,384 14,977 12,474
12/04 12,482 15,627 12,629
12/05 12,804 16,007 13,008
12/06 13,369 16,700 13,627
12/07 14,021 17,864 14,273
SECTOR WEIGHTINGS as of 12/31/07*
- --------------------------------------------------------
- --------------------------------------------------------
Commercial Paper 64%
- --------------------------------------------------------
Federal Agency Securities 19
- --------------------------------------------------------
Medium Term Notes 17
- --------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
14
THIS PAGE INTENTIONALLY BLANK.
MULTI-SECTOR FIXED INCOME SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX MULTI-SECTOR FIXED INCOME SERIES ("MULTI-SECTOR FIXED INCOME") Seeks
long-term total return.
[ ] For the 12-month reporting period the Series returned 3.71%. For the same
period, the Lehman Brothers Aggregate Bond Index, a broad-based fixed income
index, returned 6.97%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE FIXED INCOME MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The broad U.S. fixed income market, as represented by the Lehman Brothers
Aggregate Bond Index returned 6.97% for the fiscal year ended December 31,
2007. In the first five meetings of the year, the Fed kept the federal funds
rate unchanged at 5.25%. On September 18, 2007, the Fed cut the federal
funds rate by 0.50% to 4.75%, citing concerns that tightening credit
conditions could potentially increase the strain on the housing market,
eventually leading to lower-than-expected economic growth. The Fed proceeded
to cut rates another 0.25% at each of its next two meetings on October 31st
and December 11th. Since the beginning of the year the yield curve has
steepened, with rates declining across the curve.
[ ] The 1st half of 2007 can best be characterized as a low volatility, benign
credit environment. It was in this atmosphere that non-treasury fixed income
sectors outperformed. In stark contrast, the 2nd half of 2007 was
extraordinarily volatile. This was primarily due to fear surrounding the
subprime mortgage market and its resulting contagion. These fears caused a
very significant flight to quality which resulted in dramatic spread
widening in all sectors of the bond market. So significant was this flight
to quality, that it caused treasuries to outperform almost all spread
sectors, the exception being out-performance by some non-U.S. Dollar
investments.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] The decision to maintain an underweight to U.S. Treasuries in favor of
spread sectors was the largest detractor to performance for the fiscal year
ended December 31, 2007. Treasuries outperformed as concerns over subprime
sparked a flight to quality, causing spreads in many sectors to widen. This
environment typically does not favor our style of investing. Among the
series' investment in spread sectors, the allocation to emerging market
securities detracted the most from performance. Within emerging markets, the
overweight to Argentina and Venezuela were the key drivers of
underperformance.
[ ] The largest positive contributor to performance was the series' exposure to
non U.S. Dollar investments, which benefited from market expectations that
the Federal Reserve would cut U.S. interest rates in 2007 and stronger
growth outside of the United States. An additional positive contributor to
the series' performance was our issue selection within the investment grade
corporate sector, which out-performed the Lehman U.S. Corporate Investment
Grade Bond Index. Although the series' allocation to the corporate
high-yield sector hurt performance the higher quality focus and underweight
to CCC securities within the sector helped performance. For the year the Caa
component of the Lehman High Yield Index returned -0.13%, while the Ba and B
components returned 1.75% and 3.12%, respectively.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING INTERNATIONALLY INVOLVES RISKS NOT ASSOCIATED WITH INVESTING
SOLELY IN THE U.S., SUCH AS CURRENCY FLUCTUATION, POLITICAL RISK,
DIFFERENCES IN ACCOUNTING AND THE LIMITED AVAILABILITY OF INFORMATION.
THE SERIES' USE OF DERIVATIVES SUCH AS FUTURES, OPTIONS AND SWAP AGREEMENTS
TO PURSUE THEIR INVESTMENT OBJECTIVES MAY EXPOSE THE SERIES TO ADDITIONAL
RISKS THAT IT WOULD NOT BE SUBJECT TO IF IT INVESTED DIRECTLY IN THE
SECURITIES UNDERLYING THOSE DERIVATIVES. THESE RISKS MAY CAUSE THE SERIES TO
EXPERIENCE HIGHER LOSSES THAN SERIES THAT DO NOT USE DERIVATIVES.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
16
MULTI-SECTOR FIXED INCOME SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------
1 year 5 years 10 years
- --------------------------------------------------------------------------------
MULTI-SECTOR FIXED INCOME SERIES 3.71% 6.66% 5.67%
- --------------------------------------------------------------------------------
LEHMAN BROTHERS AGGREGATE BOND INDEX 6.97 4.42 5.97
- --------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 0.74%; NET: 0.74%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/97. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Multi-Sector Fixed Income Series Lehman Brothers Aggregate Bond Index
12/97 $10,000 $10,000
12/98 9,598 10,869
12/99 10,122 10,779
12/00 10,777 12,032
12/01 11,433 13,048
12/02 12,576 14,387
12/03 14,410 14,977
12/04 15,395 15,627
12/05 15,669 16,007
12/06 16,742 16,700
12/07 17,362 17,864
FUND INVESTMENT ALLOCATION as of 12/31/07*
- --------------------------------------------------------
- --------------------------------------------------------
Domestic Corporate Bonds 24%
- --------------------------------------------------------
Foreign Government Securities 17
- --------------------------------------------------------
Foreign Corporate Bonds 9
- --------------------------------------------------------
Non-Agency Mortgage-Backed Securities 8
- --------------------------------------------------------
Domestic Loan Agreements 8
- --------------------------------------------------------
Agency Mortgage-Backed Securities 7
- --------------------------------------------------------
U.S. Government Securities 5
- --------------------------------------------------------
Other (includes short-term investments) 22
- --------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
17
MULTI-SECTOR SHORT TERM BOND SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX MULTI-SECTOR SHORT-TERM BOND SERIES ("MULTI-SECTOR SHORT TERM BOND")
Seeks to provide high current income while attempting to limit changes in
the Series net assets caused by interest rate changes.
[ ] For the 12-month reporting period the Series returned 3.99%. For the same
period, the Lehman Brothers Aggregate Bond Index, a broad-based fixed income
index, returned 6.97% and the Merrill Lynch 1-2.99 Year Medium Quality
Corporate Bonds Index, the Series' style-specific benchmark, returned 5.31%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE FIXED INCOME MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The broad U.S. fixed income market, as represented by the Lehman Brothers
Aggregate Bond Index returned 6.97% for the fiscal year ended December 31,
2007. In the first five meetings of the year the Fed kept the federal funds
rate unchanged at 5.25%. On September 18, 2007, the Fed cut the federal
funds rate by 0.50% to 4.75%, citing concerns that tightening credit
conditions could potentially increase the strain on the housing market,
eventually leading to lower than expected economic growth. The Fed proceeded
to cut rates another 0.25% at each of its next two meetings on October 31st
and December 11th. Since the beginning of the year the yield curve has
steepened, with rates declining across the curve.
[ ] The 1st half of 2007 can best be characterized as a low volatility, benign
credit environment. It was in this atmosphere that non-treasury fixed income
sectors outperformed. In stark contrast, the 2nd half of 2007 was
extraordinarily volatile. This was primarily due to fear surrounding the
subprime mortgage market and its resulting contagion. These fears caused a
very significant flight to quality which resulted in dramatic spread
widening in all sectors of the bond market. So significant was this flight
to quality, that it caused treasuries to outperform almost all spread
sectors, the exception being out-performance by some non-U.S. Dollar
investments.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] The decision to maintain an underweight to U.S. Treasuries in favor of
spread sectors was the largest detractor to performance for the fiscal year
ended December 31, 2007. Treasuries outperformed as concerns over subprime
sparked a flight to quality, causing spreads in many sectors to widen. This
environment typically does not favor our style of investing, however, our
ability to be tactical in our use of high quality substitutes for
investment-grade corporates contributed positively to performance for the
year. Among the series' investment in spread sectors, the overweight to
asset backed securities detracted the most from performance. The
asset-backed sector was pressured by the home equity sub-component, which
suffered from weakness in the underlying collateral.
[ ] The largest positive contributor to performance was the series' exposure to
non U.S. Dollar investments, which benefited from market expectations that
the Federal Reserve would cut U.S. interest rates in 2007 and stronger
growth outside of the United States. Although the series' allocation to the
corporate high yield sector hurt performance the higher quality focus and
underweight to CCC securities within the sector helped performance. For the
year the Caa component of the Lehman High Yield Index returned -0.13%, while
the Ba and B components returned 1.75% and 3.12% respectively. As of
12/31/07, the series held 0% in Caa U.S. corporate securities, while the
index had 19.96%.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING INTERNATIONALLY INVOLVES RISKS NOT ASSOCIATED WITH INVESTING
SOLELY IN THE U.S., SUCH AS CURRENCY FLUCTUATION, POLITICAL RISK,
DIFFERENCES IN ACCOUNTING AND THE LIMITED AVAILABILITY OF INFORMATION.
THE VALUE OF MORTGAGE-BACKED AND OTHER ASSET SECURITIES, INCLUDING
PASS-THROUGH TYPE SECURITIES AND COLLATERALIZED MORTGAGE OBLIGATIONS (CMO'S)
MAY FLUCTUATE TO A GREATER DEGREE THAN OTHER DEBT SECURITIES IN RESPONSE TO
INTEREST RATE CHANGES.
THE SERIES' USE OF DERIVATIVES SUCH AS FUTURES, OPTIONS AND SWAP AGREEMENTS
TO PURSUE THEIR INVESTMENT OBJECTIVES MAY EXPOSE THE SERIES TO ADDITIONAL
RISKS THAT IT WOULD NOT BE SUBJECT TO IF IT INVESTED DIRECTLY IN THE
SECURITIES UNDERLYING THOSE DERIVATIVES. THESE RISKS MAY CAUSE THE SERIES TO
EXPERIENCE HIGHER LOSSES THAN SERIES THAT DO NOT USE DERIVATIVES.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
18
MULTI-SECTOR SHORT TERM BOND SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- ---------------------------------------------------------------------------------------------------------------------------
Inception Inception
1 year to 12/31/07 Date
- ---------------------------------------------------------------------------------------------------------------------------
MULTI-SECTOR SHORT TERM BOND SERIES 3.99% 4.22% 6/2/03
- ---------------------------------------------------------------------------------------------------------------------------
LEHMAN BROTHERS AGGREGATE BOND INDEX 6.97 3.96 6/2/03
- ---------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH 1-2.99 YEAR MEDIUM QUALITY CORPORATE BONDS INDEX 5.31 3.40 6/2/03
- ---------------------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 0.88%; NET: 0.70%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 6/2/03. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Merrill Lynch 1-2.99 Year
Multi-Sector Short Lehman Brothers Medium Quality Corporate
Term Bond Series Aggregate Bond Index Bonds Index
6/2/03 $10,000 $10,000 $10,000
12/03 10,296 10,018 10,144
12/04 10,845 10,453 10,340
12/05 10,993 10,707 10,536
12/06 11,621 11,171 11,042
12/07 12,085 11,949 11,628
FUND INVESTMENT ALLOCATION as of 12/31/07*
- ---------------------------------------------------------
- ---------------------------------------------------------
Non-Agency Mortgage-Backed Securities 22%
- ---------------------------------------------------------
Domestic Corporate Bonds 19
- ---------------------------------------------------------
Foreign Government Securities 16
- ---------------------------------------------------------
Foreign Corporate Bonds 9
- ---------------------------------------------------------
Domestic Loan Agreements 9
- ---------------------------------------------------------
Agency Mortgage-Backed Securities 8
- ---------------------------------------------------------
Asset-Backed Securities 6
- ---------------------------------------------------------
Other (includes short-term investments) 11
- ---------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
19
STRATEGIC ALLOCATION SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX STRATEGIC ALLOCATION SERIES ("STRATEGIC ALLOCATION") Seeks high
total return over an extended period of time consistent with prudent
investment risk.
[ ] For the 12-month reporting period the Series returned 5.98%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49% and
the Lehman Brothers Aggregate Bond Index, a broad-based fixed income index
returned 6.97%. The Composite Index for Strategic Allocation Series, the
Series' style-specific benchmark, returned 6.22%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The return of volatility was the key theme for the year. After posting new
highs for the S&P 500 in early October, stocks turned lower on credit issues
tied to subprime mortgages. The mortgages had been dissected and repackaged
into securities held by large banks, brokers and insurance companies. When
the low teaser rates on the mortgages reset, homeowners could no longer make
their payments and the instruments defaulted. This resulted in a huge credit
squeeze, causing the Fed to begin lowering interest rates in order to steer
the economy away from falling into a recession. There were billion dollar
write-downs of investments and several CEOs were fired. Also, affecting the
markets was a rise in the price of crude oil and a sharp decline in the
value of the U.S. dollar. Because of these issues, the United States equity
markets posted mixed returns for the calendar year 2007.
[ ] The fund's benchmark, the Standard & Poor's 500, is a representative index
for large capitalization stocks and it returned 5.49%. The small cap
benchmark, Russell 2000, posted a loss of 1.57%. In terms of style indices,
Value stocks returned less than Growth stocks for the fiscal year. The
Russell 1000 Value Index had a slight loss of 0.17%, while the Russell 1000
Growth Index had a double-digit gain of 11.81%. With sub-par returns in
broad-based U.S. indices, the real action was in overseas emerging markets
stocks.
The MSCI Emerging Markets index posted a huge gain of 39.78%. We did not
participate in this market because emerging foreign companies are not in our
investment universe.
WHAT FACTORS AFFECTED THE EQUITY PORTION SERIES'
PERFORMANCE DURING ITS FISCAL YEAR?
[ ] Equity performance for the year was favorable. The Strategic Allocation
Series stock portion of the portfolio returned 7.47% before taking into
account fund expenses. The investment portfolio return was 198 basis points
higher than the 5.49% total return for the fund's benchmark, the Standard &
Poor's 500.
In relation to the benchmark index, the fund benefited the most from sector
positioning in Financials, Consumer Discretionary and Health Care. Sector
positioning in Information Technology, Consumer Staples and Materials had an
adverse impact on the Series' performance relative to its benchmark. The top
five individual stock contributors were Exxon Mobil, Occidental Petroleum,
Microsoft, AT&T and National Oilwell Varco. The bottom five contributors
were Citigroup, Bank of America, Merrill Lynch, American International Group
and Tyco.
HOW DID THE FIXED INCOME MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The broad U.S. fixed income market, as represented by the Lehman Brothers
Aggregate Bond Index returned 6.97% for the fiscal year ended December 31,
2007. In the first five meetings of the year the Fed kept the federal funds
rate unchanged at 5.25%. On September 18, 2007, the Fed cut the federal
funds rate by 0.50% to 4.75%, citing concerns that tightening credit
conditions could potentially increase the strain on the housing market,
eventually leading to lower than expected economic growth. The Fed proceeded
to cut rates another 0.25% at each of its next two meetings on October 31st
and December 11th. Since the beginning of the year the yield curve has
steepened, with rates declining across the curve.
[ ] The 1st half of 2007 can best be characterized as a low volatility, benign
credit environment. It was in this atmosphere that non-treasury fixed income
sectors outperformed. In stark contrast, the 2nd half of 2007 was
extraordinarily volatile. This was primarily due to fear surrounding the
subprime mortgage market and its resulting contagion. These fears caused a
very significant flight to quality which resulted in dramatic spread
widening in all sectors of the bond market. So significant was this flight
to quality, that it caused treasuries to outperform almost all spread
sectors, the exception being out-performance by some non-U.S. Dollar
investments.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] The decision to maintain an underweight to U.S. Treasuries in favor of
spread sectors was the largest detractor to performance for the fiscal year
ended December 31, 2007. Treasuries outperformed as concerns over subprime
sparked a flight to quality, causing spreads in many sectors to widen. This
environment typically does not favor our style of investing, however, our
ability to be tactical in our use of high quality substitutes for
investment-grade corporates contributed positively to performance for the
year. Among the series' investment in spread sectors, the overweight to
asset backed securities and corporate high yield detracted the most from
performance. The asset-backed sector was pressured by the home equity
sub-component, which suffered from weakness in the underlying collateral.
The high-yield market weakened over increased concerns that tightening
credit conditions could potentially increase the strain on the housing
market, eventually leading to lower than expected economic growth.
[ ] The largest positive contributor to performance was the series' exposure to
non U.S. Dollar investments, which benefited from market expectations that
the Federal Reserve would cut U.S. interest rates in 2007 and stronger
growth outside of the United States. An additional positive contributor to
the series' performance was our issue selection within the investment grade
corporate sector, which out-performed the Lehman U.S. Corporate Investment
Grade Bond Index.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
20
STRATEGIC ALLOCATION SERIES (CONTINUED)
PORTFOLIOS THAT INVEST IN HIGH YIELD SECURITIES ARE SUBJECT TO GREATER
CREDIT RISK AND PRICE FLUCTUATION THAN PORTFOLIOS THAT INVEST IN HIGHER
QUALITY SECURITIES. THE SERIES' USE OF DERIVATIVES SUCH AS FUTURES, OPTIONS
AND SWAP AGREEMENTS TO PURSUE THE INVESTMENT OBJECTIVES MAY EXPOSE THE
SERIES TO ADDITIONAL RISKS THAT IT WOULD NOT BE SUBJECT TO IF THE INVESTMENT
OPTIONS INVESTED DIRECTLY IN THE SECURITIES UNDERLYING THOSE DERIVATIVES.
THESE RISKS MAY CAUSE THE SERIES TO EXPERIENCE HIGHER LOSSES THAN SERIES
THAT DO NOT USE DERIVATIVES.
THE ECONOMIES OF DEVELOPING COUNTRIES MAY BE ADVERSELY AFFECTED BY TRADE
BARRIERS, EXCHANGE CONTROLS, MANAGED ADJUSTMENTS IN RELATIVE CURRENCY VALUES
AND OTHER PROTAGONIST MEASURES IMPOSED OR NEGOTIATED BY THE COUNTRIES WITH
WHICH THEY TRADE.
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- ---------------------------------------------------------------------------------------------------------
1 year 5 years 10 years
- ---------------------------------------------------------------------------------------------------------
STRATEGIC ALLOCATION SERIES 5.98% 9.38% 6.67%
- ---------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.92
- ---------------------------------------------------------------------------------------------------------
LEHMAN BROTHERS AGGREGATE BOND INDEX 6.97 4.42 5.97
- ---------------------------------------------------------------------------------------------------------
COMPOSITE INDEX FOR STRATEGIC ALLOCATION SERIES 6.22 9.51 6.27
- ---------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 0.84%; NET: 0.83%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/97. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Composite 60%
Strategic Allocation S&P 500(R) Index Lehman Brothers S&P 500 / 40%
Series Aggregate Bond Index Lehman Aggregate Bond
12/97 $10,000 $10,000 $10,000 $10,000
12/98 12,079 12,876 10,869 12,109
12/99 13,440 15,597 10,779 13,568
12/00 13,518 14,164 12,032 13,429
12/01 13,770 12,482 13,048 12,932
12/02 12,176 9,723 14,387 11,662
12/03 14,596 12,515 14,977 13,819
12/04 15,685 13,875 15,627 14,964
12/05 15,965 14,558 16,007 15,565
12/06 17,991 16,856 16,700 17,293
12/07 19,067 17,782 17,864 18,370
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Domestic Common Stocks 57%
- ------------------------------------------------------------
Non-Agency Mortgage-Backed Securities 12
- ------------------------------------------------------------
Domestic Corporate Bonds 9
- ------------------------------------------------------------
Agency Mortgage-Backed Securities 7
- ------------------------------------------------------------
Foreign Corporate Bonds 3
- ------------------------------------------------------------
Municipal Bonds 3
- ------------------------------------------------------------
Asset-Backed Securities 3
- ------------------------------------------------------------
Other (includes short-term investments) 6
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
21
ABERDEEN INTERNATIONAL SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-ABERDEEN INTERNATIONAL SERIES ("ABERDEEN INTERNATIONAL") Seeks high
total return consistent with reasonable risk.
[ ] For the 12-month reporting period the Series returned 14.94%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49% and
the MSCI EAFE(R) Index, the Series' style-specific benchmark, returned
11.63%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The majority of International equity markets posted positive returns in
2007, despite ending the year on a negative tone. The MSCI EAFE index had a
total return of 11.63% for the year. U.S. investors benefited once again
from the weakness of the U.S. Dollar against most foreign currencies,
helping to boost overall returns.
[ ] Latin America was again the highest returning region, posting a return of
50.7%. Within Latin America, Brazil was a notable standout, achieving a
return of 80% as it benefited from significant exposure to its rich natural
resources within the commodities sector. Elsewhere in Emerging Markets,
China and India also performed exceptionally well posting returns in excess
of 50% each for the year.
[ ] In Continental Europe, equity market returns were boosted by a sharp rise in
the Euro versus the U.S. Dollar while continued strong economic growth
boosted corporate profits. Europe's largest economy, Germany, was the single
best performing market in the region, posting a U.S. Dollar return of 35.6%.
Of the other major International markets Japan was the greatest
disappointment, posting a negative return of 4.1% for the fiscal year under
review.
[ ] Within sectors, financials fared worst as the fallout from the U.S. subprime
crisis proved to be a major problem for Financial institutions globally
rather than being solely confined to the U.S. financial market. The
Materials and Energy sectors achieved high returns aided by continued upward
momentum in the underlying prices of oil and other natural resources.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] The fund produced a return of 14.94% for 2007. The exposure to Emerging
Markets had a positive contribution to performance with companies such as
Petrobras in Brazil, ICICI Bank in India, and Grupo Asur in Mexico,
producing very strong returns and comfortably outperforming the benchmark
index. This was partly offset by disappointing negative returns from
longterm holdings Samsung Electronics in South Korea and Taiwan
Semiconductor in Taiwan. The two Chinese positions of Petrochina and China
Mobile also contributed very strong returns during the year and profits were
taken in October 2007 due to our concern over the very high valuation levels
of Chinese equities.
[ ] Stock selection was strong within the United Kingdom ("UK"), as engineering
company, Weir Group continued to perform robustly and British American
Tobacco, Vodafone and food retailer William Morrison also posted solid
returns. Within the Continental European holdings, strong showings from
Belgacom and German companies Eon and Adidas, were partly offset by
disappointments in Swedish telecommunications company Ericsson and Dutch
financial giant ING Groep, where we sold our position in the second half of
the year. Within the Japanese portion of the portfolio, a number of
financial holdings suffered a knock on effect from the U.S. subprime crisis
with banking giant MUFJ performing poorly as did leasing company Orix.
Export giants Canon and Toyota also underperformed on fears of a U.S.
economic slowdown and a rise in the Yen in the second half of the year.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE.
INVESTING INTERNATIONALLY INVOLVES RISKS NOT ASSOCIATED WITH INVESTING
SOLELY IN THE U.S., SUCH AS CURRENCY FLUCTUATION, POLITICAL RISK,
DIFFERENCES IN ACCOUNTING AND THE LIMITED AVAILABILITY OF INFORMATION. THE
ECONOMIES OF DEVELOPING COUNTRIES MAY BE ADVERSELY AFFECTED BY TRADE
BARRIERS, EXCHANGE CONTROLS, MANAGED ADJUSTMENTS IN RELATIVE CURRENCY VALUES
AND OTHER PROTAGONIST MEASURES IMPOSED OR NEGOTIATED BY THE COUNTRIES WITH
WHICH THEY TRADE.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
22
ABERDEEN INTERNATIONAL SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------
1 year 5 years 10 years
- --------------------------------------------------------------------------------
ABERDEEN INTERNATIONAL SERIES 14.94% 22.56% 9.57%
- --------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.92
- --------------------------------------------------------------------------------
MSCI EAFE(R) INDEX 11.63 22.08 9.04
- --------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.01%; NET: 1.01%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/97. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Aberdeen
International
Series S&P 500(R) Index MSCI EAFE(R) Index
12/97 $10,000 $10,000 $10,000
12/98 12,792 12,876 12,033
12/99 16,565 15,597 15,318
12/00 13,946 14,164 13,180
12/01 10,593 12,482 10,385
12/02 9,025 9,723 8,759
12/03 11,901 12,515 12,190
12/04 14,374 13,875 14,713
12/05 17,043 14,558 16,775
12/06 21,709 16,856 21,280
12/07 24,952 17,782 23,755
COUNTRY WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
United Kingdom 20%
- ------------------------------------------------------------
Japan 17
- ------------------------------------------------------------
Germany 12
- ------------------------------------------------------------
Switzerland 6
- ------------------------------------------------------------
Italy 5
- ------------------------------------------------------------
Hong Kong 5
- ------------------------------------------------------------
Sweden 4
- ------------------------------------------------------------
Other (includes short-term investments) 31
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
23
ALGER SMALL-CAP GROWTH SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-ALGER SMALL-CAP GROWTH SERIES ("ALGER SMALL-CAP GROWTH") Seeks
long-term capital growth.
[ ] For the 12-month reporting period the Series returned 16.10%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49% and
the Russell 2000(R) Growth Index, the Series' style-specific benchmark,
returned 7.05%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] Judging from the tenor of the news and the sentiment of investors, you would
think that the markets this year were either down 10% or flat. Even with the
bottom falling out of financial services stocks in the third and fourth
quarters, however, the major indices were up for the year, some quite
decently. The S&P 500 Stock Index was up 5.5% and the Dow Jones Industrial
Average 8.9%. Large capitalization stocks performed better than their
smaller cap brethren; the Russell 1000, a large cap index, was up 5.8%,
while the smaller cap Russell 2000 Index posted a -1.6% decline. As a result
of the problems in the Financial Services sector, value indices sharply
underperformed growth counterparts. Because of the heavy weighting of banks,
brokerage and insurance companies in the value indices, the Russell 3000
Value Index posted a loss of -1.0% while the broadly-based Russell 3000
Growth Index was up 11.4%. Within the small cap space, the disparity between
growth and value was even greater as the Russell 2000 Value Index was down
-9.8% and the Russell 2000 Growth Index was up 7.1%.
[ ] We continue to sound the theme that many U.S. growth companies are deeply
immersed in a global economy that is showing signs of "decoupling" from the
United States and expanding at a much more rapid pace. Those companies are
seeing robust growth from places as diverse as Latin America, the Gulf
region, and especially China. These regions have been a source of new
markets and new business for many companies that trade on U.S. exchanges.
Yet, many of those companies have not seen multiple expansion commensurate
with that growth. They have done well but have not overshot this year.
That's why we believe they have potential for the year ahead.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] Over the fiscal year, relative to the Russell 2000 Growth Index, the Fund
benefited from positive security selection in all ten sectors, with the
greatest impact coming from the Industrials, Consumer Discretionary, Energy
and Information Technology sectors. In terms of allocation, there were no
significant contributors or detractors at the sector level. The top
contributing securities were Petrobank Energy & Resources Ltd. (in the
Energy sector), Synchronoss Technologies Inc. (Information Technology),
priceline.com Inc. (Consumer Discretionary), Deckers Outdoor Corp. (Consumer
Discretionary) and BE Aerospace Inc. (Industrials), while the top detractors
were Coldwater Creek Inc. (Consumer Discretionary), InterNAP Network
Services Corp. (Information Technology), HFF Inc. Class A (Financials),
American Reprographics Co. (Industrials) and DSW Inc. Class A (Consumer
Discretionary).
[ ] As of December 31, 2007, the portfolio remained well diversified, consisting
of investments in more than 100 securities across 42 industries. The top
five industries were: Biotechnology, Software, Oil Gas & Consumable Fuels,
Machinery and Semiconductors & Semiconductor Equipment.
[ ] If we are correct in our view that big-picture statistics are of less and
less use in steering investment decisions, then focusing on specific
companies and specific business opportunities will become even more vital
than ever. Already, many active investment managers (and growth managers in
particular) who focus on fundamentals have outperformed their respective
indices simply because they have the flexibility to focus on the strengths
and avoid some of the weaker areas of the economy and the markets. Given how
the year ahead appears to be shaping up, that will be just as important
going forward as it has been in 2007.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE.
INVESTING INTERNATIONALLY INVOLVES RISKS NOT ASSOCIATED WITH INVESTING
SOLELY IN THE U.S., SUCH AS CURRENCY FLUCTUATION, POLITICAL RISK,
DIFFERENCES IN ACCOUNTING AND THE LIMITED AVAILABILITY OF INFORMATION.
INVESTING IN THE SECURITIES OF SMALL AND MID-SIZED COMPANIES INVOLVES RISKS,
SUCH AS RELATIVELY LOW TRADING VOLUMES, MORE PRICE VOLATILITY AND LESS
LIQUIDITY THAN SECURITIES FROM LARGER, MORE ESTABLISHED COMPANIES.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
24
ALGER SMALL-CAP GROWTH SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- ---------------------------------------------------------------------------------------------------------------
Inception Inception
1 year 5 years to 12/31/07 Date
- ---------------------------------------------------------------------------------------------------------------
ALGER SMALL-CAP GROWTH SERIES 16.10% 20.23% 18.83% 8/12/02
- ---------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 11.45 8/12/02
- ---------------------------------------------------------------------------------------------------------------
RUSSELL 2000(R) GROWTH INDEX 7.05 16.50 15.41 8/12/02
- ---------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.27%; NET: 1.00%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Alger Small-Cap Russell 2000(R)
Growth Series S&P 500(R) Index Growth Index
8/12/02 $10,000 $10,000 $10,000
12/02 10,085 9,806 10,092
12/03 15,468 12,622 14,990
12/04 15,797 13,993 17,135
12/05 18,268 14,683 17,847
12/06 21,821 17,000 20,228
12/07 25,333 17,934 21,654
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Information Technology 26%
- ------------------------------------------------------------
Health Care 19
- ------------------------------------------------------------
Industrials 16
- ------------------------------------------------------------
Consumer Discretionary 14
- ------------------------------------------------------------
Energy 8
- ------------------------------------------------------------
Financials 7
- ------------------------------------------------------------
Materials 4
- ------------------------------------------------------------
Other (includes short-term investments) 6
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
25
DUFF & PHELPS REAL ESTATE SECURITIES SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES ("DUFF & PHELPS REAL
ESTATE SECURITIES") Seeks capital appreciation and income with approximately
equal emphasis.
[ ] For the 12-month reporting period the Series returned -15.71%. For the
same period, the S&P 500(R) Index, a broad-based equity index, returned
5.49% and the FTSE NAREIT Equity REITs Index, the Series' style-specific
benchmark, returned -15.69%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] After two years of highly liquid and accommodative debt markets, compressing
risk premia across all investment classes and a wave of privatizations, both
within the real estate world and the broader market, an environment of
vulnerability was created. The ensuing subprime credit crisis triggered an
increase in the cost of capital across all investment classes. The low IRRs
(internal rate of return targets) implicit in private market transactions
could no longer be supported.
[ ] The seven year run of positive fund flows and outperformance for REITs
versus the broader market as of year-end 2006 was about to end on above
average valuations, low implied cap rates and dividend yields well below the
90 basis point historical premium to the Ten-Year Treasury Bond.
[ ] REITs came under profit taking pressure as the credit crisis emerged.
[ ] Borrowing spreads increased rapidly across equity markets and the
historically unavailable credit terms were removed (i.e., high loan-to-value
advance rates used by the private real estate funds, interest only loans,
and covenant light debt issuances, all of which had driven a significant
compression in capitalization rates used to value net operating income of
real estate).
[ ] In early July, after Hilton announced its sale to Blackstone, privatizations
came to an abrupt halt as take over financing shut down.
[ ] The Street, which had been financing both debt and equity of privatizations
in the broader market and within the REIT space, suddenly realized how much
exposure of subprime paper and take over financing it had on its shelf.
Write-downs ensued and are by no means complete.
[ ] By the start of 2008, REIT valuations had returned to attractive levels as
measured by implied cap rates, material discounts to net asset values
calculated with higher cap rates than those seen in the private real estate
market, a dividend yield which had rapidly moved beyond the historical
premium to the Ten-Year Treasury Bond, and average historical multiples.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] Once the environment changed and privatizations came to a halt, we were
pleased to see the focus shift away from the next go-private rumor for REITs
which would not have met our screens towards an environment better suited to
our GARP style (focusing on cash flow growth at a reasonable price).
[ ] While we performed well against the benchmark both before and during the
go-privatization period, as evidenced by our annual performance in 2005,
2006 and 2007, the unique window favored a "deep-value" or "NAV-centric"
focus. A move away from go-privatizations helped us outperform the benchmark
in all but one month in the second half of 2007.
[ ] Field research, including visits with REIT management at all levels, and
regular property tours by all members of our team, remains the driver behind
our stock selection. It's been a hallmark of our process since we founded
our REIT business and is even more critical in uncertain times.
[ ] We anticipate the portfolio we have constructed can deliver earnings and
cash flow growth for '08 and '09 above the benchmark levels for reasonable
prices.
[ ] Current consensus estimates call for our benchmark to deliver 5-6% growth in
'08 and '09. Keep in mind '07 estimates actually ticked up slightly from the
start to the end of the year, and '08 estimates stayed flat - low beta cash
flow streams compared to the broader market.
[ ] We continue to emphasize secure, attractive and visible dividend yields and
diversification of holdings.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER
CONDITIONS AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND THERE IS NO GUARANTEE
THAT MARKET FORECASTS WILL BE REALIZED.
INVESTING IN REIT INVOLVES CERTAIN RISKS SUCH AS REFINANCING, CHANGES IN THE
VALUE OF PROPERTIES REITS OWN, DEPENDENCY ON MANAGEMENT SKILLS, ECONOMIC
IMPACT ON THE INDUSTRY AND RISKS SIMILAR TO THOSE LINKED TO SMALL-COMPANY
INVESTING.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
26
DUFF & PHELPS REAL ESTATE SECURITIES SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------------------
1 year 5 years 10 years
- --------------------------------------------------------------------------------------------
DUFF & PHELPS REAL ESTATE SECURITIES SERIES -15.71% 19.88% 12.32%
- --------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.92
- --------------------------------------------------------------------------------------------
FTSE NAREIT EQUITY REITS INDEX -15.69 18.17 10.48
- --------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.02%; NET: 1.02%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07 AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/97. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Duff & Phelps FTSE NAREIT
Real Estate Equity REITs
Securities Series S&P 500(R) Index Index
12/97 $10,000 $10,000 $10,000
12/98 7,881 12,876 8,250
12/99 8,257 15,597 7,869
12/00 10,798 14,164 9,943
12/01 11,513 12,482 11,328
12/02 12,904 9,723 11,760
12/03 17,842 12,515 16,128
12/04 24,031 13,875 21,218
12/05 27,659 14,558 23,800
12/06 37,911 16,856 32,142
12/07 31,955 17,782 27,098
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Regional Malls 16%
- ------------------------------------------------------------
Office 15
- ------------------------------------------------------------
Shopping Centers 12
- ------------------------------------------------------------
Health Care 12
- ------------------------------------------------------------
Apartments 10
- ------------------------------------------------------------
Industrial 10
- ------------------------------------------------------------
Lodging/Resorts 7
- ------------------------------------------------------------
Other (includes short-term investments) 18
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
27
S&P DYNAMIC ASSET ALLOCATION SERIES:
AGGRESSIVE GROWTH
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH ("S&P DYNAMIC
ASSET ALLOCATION: AGGRESSIVE GROWTH") Seeks long-term capital growth.
[ ] For the 12-month reporting period the Series returned 8.45%. For the same
period the S&P 500(R) Index, a broad-based equity index, returned 5.49%, and
the Composite Index for Phoenix-S&P Dynamic Asset Allocation Series:
Aggressive Growth returned 6.70%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] Emerging equity markets turned in a stronger performance than their more
developed counterparts during 2007 with the MSCI EM Latin America Index
leading the way with nearly a 50% total return for the year. The MSCI AC Far
East ex Japan Index posted a 33% gain, and the MSCI EM Europe, Middle East
and Africa Index scored almost a 31% total return. At the other end of the
spectrum, the S & P 500(R) Total Return Index gained a mere 5.5%, while the
MSCI Japan Index plunged 4.1% and the MSCI Europe Index scored a much less
impressive advance of 14.4% compared with the MSCI EMU Index equity market
bloc - which posted a hefty 20.4% gain. Overall, the MSCI World excluding
the U.S. Index advanced a respectable 12.9% for the year despite the
second-half downturn instigated by the global credit crisis. (All returns
are denominated in U.S. dollars.)
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] A consistently firm exposure to international equities and a solid short-
duration bias in fixed income allocations benefited the series' performance
the most; since international equities out-performed domestic U.S. stock
markets and the flight to quality in the second half of 2007. The Fed's
reversion to an accommodative credit posture worked in favor of debt
positions concentrated at the short-end of the U.S. Treasury yield curve.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING IN SECTOR FUNDS OR NON-DIVERSIFIED FUNDS MAY BE MORE VOLATILE THAN
INVESTING IN BROADLY DIVERSIFIED FUNDS, AND MAY BE MORE SUSCEPTIBLE TO
ADVERSE ECONOMIC, POLITICAL OR REGULATORY DEVELOPMENTS AFFECTING A SINGLE
ISSUER THAN WOULD BE THE CASE IF IT WERE MORE BROADLY DIVERSIFIED.
SEE NOTE 16 IN THE NOTES TO FINANCIAL STATEMENTS, IN REFERENCE TO A
SUB-ADVISORY CHANGE.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
28
S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- -----------------------------------------------------------------------------------------------------------------------------
Inception Inception
1 year to 12/31/07 Date
- -----------------------------------------------------------------------------------------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH 8.45% 11.05% 2/3/06
- -----------------------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 10.25 2/3/06
- -----------------------------------------------------------------------------------------------------------------------------
COMPOSITE INDEX FOR S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH 6.70 11.10 2/3/06
- -----------------------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.98%; NET: 1.01%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 2/3/06. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Composite Index
S&P Dynamic for S&P Dynamic
Asset Allocation Asset Allocation
Series: Aggressive Series: Aggressive
Growth S&P 500(R) Index Growth
2/3/06 $10,000 $10,000 $10,000
12/06 11,261 11,419 11,454
12/07 12,212 12,046 12,222
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Domestic Equity ETF's 70%
- ------------------------------------------------------------
International ETF's 25
- ------------------------------------------------------------
Fixed Income ETF's 5
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
29
S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH ("DYNAMIC ASSET
ALLOCATION SERIES: GROWTH") Seeks long-term capital growth as its primary
objective with current income as a secondary consideration.
[ ] For the 12-month reporting period the Series returned 8.33%. For the same
period the S&P 500(R) Index, a broad-based equity index, returned 5.49%, and
the Composite Index for Phoenix-S&P Dynamic Asset Allocation Series: Growth
returned 6.80%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] Emerging equity markets turned in a stronger performance than their more
developed counterparts during 2007 with the MSCI EM Latin America Index
leading the way with nearly a 50% total return for the year. The MSCI AC Far
East ex Japan Index posted a 33% gain, and the MSCI EM Europe, Middle East
and Africa Index scored almost a 31% total return. At the other end of the
spectrum, the S & P 500(R) Total Return Index gained a mere 5.5%, while the
MSCI Japan Index plunged 4.1% and the MSCI Europe Index scored a much less
impressive advance of 14.4% compared with the MSCI EMU Index equity market
bloc - which posted a hefty 20.4% gain. Overall, the MSCI World excluding
the U.S. Index advanced a respectable 12.9% for the year despite the
second-half downturn instigated by the global credit crisis. (All returns
are denominated in U.S. dollars.)
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] A consistently firm exposure to international equities and a solid short-
duration bias in fixed income allocations benefited the series' performance
the most; since international equities out-performed domestic U.S. stock
markets and the flight to quality in the second half of 2007. The Fed's
reversion to an accommodative credit posture worked in favor of debt
positions concentrated at the short-end of the U.S. Treasury yield curve.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING IN SECTOR FUNDS OR NON-DIVERSIFIED FUNDS MAY BE MORE VOLATILE THAN
INVESTING IN BROADLY DIVERSIFIED FUNDS, AND MAY BE MORE SUSCEPTIBLE TO
ADVERSE ECONOMIC, POLITICAL OR REGULATORY DEVELOPMENTS AFFECTING A SINGLE
ISSUER THAN WOULD BE THE CASE IF IT WERE MORE BROADLY DIVERSIFIED.
SEE NOTE 16 IN THE NOTES TO FINANCIAL STATEMENTS, IN REFERENCE TO A
SUB-ADVISORY CHANGE.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
30
S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- -----------------------------------------------------------------------------------------------------------------------
Inception Inception
1 year to 12/31/07 Date
- -----------------------------------------------------------------------------------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH 8.33% 9.62% 2/3/06
- -----------------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 10.25 2/3/06
- -----------------------------------------------------------------------------------------------------------------------
COMPOSITE INDEX FOR S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH 6.80 10.03 2/3/06
- -----------------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.72%; NET: 0.84%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 2/3/06. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Composite Index
S&P Dynamic for S&P Dynamic
Asset Allocation Asset Allocation
Series: Growth S&P 500(R) Index Series: Growth
2/3/06 $10,000 $10,000 $10,000
12/06 10,998 11,419 11,235
12/07 11,914 12,046 12,000
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Domestic Equity ETF's 50%
- ------------------------------------------------------------
Fixed Income ETF's 30
- ------------------------------------------------------------
International ETF's 19
- ------------------------------------------------------------
Other (includes short-term investments) 1
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
31
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE ("S&P DYNAMIC ASSET
ALLOCATION SERIES: MODERATE") Seeks current income with capital growth as a
secondary consideration.
[ ] For the 12-month reporting period the Series returned 7.98%. For the same
period the S&P 500(R) Index, a broad-based equity index, returned 5.49%, and
the Composite Index for Phoenix-S&P Dynamic Asset Allocation Series:
Moderate returned 6.89%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] Emerging equity markets turned in a stronger performance than their more
developed counterparts during 2007 with the MSCI EM Latin America Index
leading the way with nearly a 50% total return for the year. The MSCI AC Far
East ex Japan Index posted a 33% gain, and the MSCI EM Europe, Middle East
and Africa Index scored almost a 31% total return. At the other end of the
spectrum, the S & P 500(R) Total Return Index gained a mere 5.5%, while the
MSCI Japan Index plunged 4.1% and the MSCI Europe Index scored a much less
impressive advance of 14.4% compared with the MSCI EMU Index equity market
bloc - which posted a hefty 20.4% gain. Overall, the MSCI World excluding
the U.S. Index advanced a respectable 12.9% for the year despite the
second-half downturn instigated by the global credit crisis. (All returns
are denominated in U.S. dollars.)
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] A consistently firm exposure to international equities and a solid short-
duration bias in fixed income allocations benefited the series' performance
the most; since international equities out-performed domestic (U.S.) stock
markets and the flight to quality in the second half of 2007. The Fed's
reversion to an accommodative credit posture worked in favor of debt
positions concentrated at the short-end of the U.S. Treasury yield curve.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING IN SECTOR FUNDS OR NON-DIVERSIFIED FUNDS MAY BE MORE VOLATILE THAN
INVESTING IN BROADLY DIVERSIFIED FUNDS, AND MAY BE MORE SUSCEPTIBLE TO
ADVERSE ECONOMIC, POLITICAL OR REGULATORY DEVELOPMENTS AFFECTING A SINGLE
ISSUER THAN WOULD BE THE CASE IF IT WERE MORE BROADLY DIVERSIFIED.
SEE NOTE 16 IN THE NOTES TO FINANCIAL STATEMENTS, IN REFERENCE TO A
SUB-ADVISORY CHANGE.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
32
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- -----------------------------------------------------------------------------------------------------------------------------
Inception Inception
1 year to 12/31/07 Date
- -----------------------------------------------------------------------------------------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE 7.98% 7.17% 2/3/06
- -----------------------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 10.25 2/3/06
- -----------------------------------------------------------------------------------------------------------------------------
COMPOSITE INDEX FOR S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE 6.89 7.85 2/3/06
- -----------------------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS: GROSS: 3.29%; NET: 0.89%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 2/3/06. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Composite Index
S&P Dynamic for S&P Dynamic
Asset Allocation Asset Allocation
Series: Moderate S&P 500(R) Index Series: Moderate
2/3/06 $10,000 $10,000 $10,000
12/06 10,569 11,419 10,806
12/07 11,412 12,046 11,550
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Fixed Income ETF's 70%
- ------------------------------------------------------------
Domestic Equity ETF's 20
- ------------------------------------------------------------
International ETF's 10
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
33
S&P DYNAMIC ASSET ALLOCATION SERIES:
MODERATE GROWTH
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH ("S&P DYNAMIC
ASSET ALLOCATION SERIES: MODERATE GROWTH") Seeks long-term capital growth
and current income with a greater emphasis on capital growth.
[ ] For the 12-month reporting period the Series returned 8.50%. For the same
period the S&P 500(R) Index, a broad-based equity index, returned 5.49%, and
the Composite Index for Phoenix-S&P Dynamic Asset Allocation Series:
Moderate Growth returned 6.83%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] Emerging equity markets turned in a stronger performance than their more
developed counterparts during 2007 with the MSCI EM Latin America Total
Returns Index leading the way with nearly a 50% total return for the year.
The MSCI EM Far East ex Japan excluding Japan Total Return Index posted a
33% gain, and the MSCI EM Europe, Middle East and Africa Index scored almost
a 31% total return. At the other end of the spectrum, the S & P 500(R) Total
Return Index gained a mere 5.5%, while the MSCI Japan Index plunged 4.1% and
the MSCI Europe Total Return Index scored a much less impressive advance of
14.4% compared with the MSCI EMU Index equity market bloc - which posted a
hefty 20.4% gain. Overall, the MSCI World excluding the U.S. Index advanced
a respectable 12.9% for the year despite the second-half downturn instigated
by the global credit crisis. (All returns are denominated in U.S. dollars.)
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] A consistently firm exposure to international equities and a solid short-
duration bias in fixed income allocations benefited the series' performance
the most; since international equities out-performed domestic U.S. stock
markets and the flight to quality in the second half of 2007. The Fed's
reversion to an accommodative credit posture worked in favor of debt
positions concentrated at the short-end of the U.S. Treasury yield curve.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING IN SECTOR FUNDS OR NON-DIVERSIFIED FUNDS MAY BE MORE VOLATILE THAN
INVESTING IN BROADLY DIVERSIFIED FUNDS, AND MAY BE MORE SUSCEPTIBLE TO
ADVERSE ECONOMIC, POLITICAL OR REGULATORY DEVELOPMENTS AFFECTING A SINGLE
ISSUER THAN WOULD BE THE CASE IF IT WERE MORE BROADLY DIVERSIFIED.
SEE NOTE 16 IN THE NOTES TO FINANCIAL STATEMENTS, IN REFERENCE TO A
SUB-ADVISORY CHANGE.
For information regarding the indexes and certain investment terms see the
glossary starting on page 2.
34
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------------------------------------------------------
Inception Inception
1 year to 12/31/07 Date
- --------------------------------------------------------------------------------------------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH 8.50% 9.08% 2/3/06
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 10.25 2/3/06
- --------------------------------------------------------------------------------------------------------------------------------
COMPOSITE INDEX FOR S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH 6.83 9.28 2/3/06
- --------------------------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 2.14%; NET: 0.85%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 2/3/06. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Composite Index
S&P Dynamic for S&P Dynamic
Asset Allocation Asset Allocation
Series: Moderate Series: Moderate
Growth S&P 500(R) Index Growth
2/3/06 $10,000 $10,000 $10,000
12/06 10,878 11,419 11,085
12/07 11,803 12,046 11,843
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Fixed Income ETF's 45%
- ------------------------------------------------------------
Domestic Equity ETF's 40
- ------------------------------------------------------------
International ETF's 15
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
35
SANFORD BERNSTEIN MID-CAP VALUE SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES ("SANFORD BERNSTEIN MID-CAP
VALUE") Seeks long-term capital appreciation. Current income is a secondary
investment objective.
[ ] For the 12-month reporting period the Series returned 2.00%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49% and
the Russell 2500TM Value Index, the Series' style-specific benchmark,
returned -7.27%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The past year was a transitional one in many ways in the market for small
and mid-capitalization stocks. After a five-year period of strong earnings
growth relative to larger companies, in 2007 earnings for these companies
suffered a sharp compression and ended the year at or below growth rates for
larger stocks. This shift caused investors, who had viewed the more robust
earnings as a basis for investing in the smallest riskiest stocks in the
sector, to question those judgments and the high multiples that they had
awarded those stocks. Further, with increased scarcity of sustainable
earnings, the markets rediscovered quality. The result was companies with
measures of corporate success such as trailing profitability dramatically
outperformed those with stronger value characteristics. Not surprisingly, in
this environment larger companies outperformed smaller ones and growth
outperformed value.
[ ] Exacerbating this shift was the renewed volatility seen in the markets in
the second half of the year. Investors became increasingly uncertain about
the size and scope of the subprime contagion and stocks with perceived
exposure to housing or consumer spending were sharply marked down. Sectors
with perceived safety such as consumer staples and utilities outperformed
while more economically sensitive sectors such as transports and consumer
cyclicals underperformed. The more domestic focus of Small- and Mid-Caps was
also a headwind in this period as they gained less from the recent boom in
U.S. exports and will continue to be more vulnerable to the housing-led U.S.
economic slowdown or downturn, if one occurs.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] Our Portfolio's 2.00% performance outperformed the Russell 2500 Value Index
which was down 7.3%.
[ ] Strong stock selection in the Utilities, Consumer Cyclicals and Energy
sectors. The Portfolio also received a boost from its significant
underweight in Financials, especially those with more direct exposure to the
subprime contagion. We saw further benefit from overweight positions in the
industrial resource and capital equipment sectors. With increased concerns
about U.S. economic growth, companies in these sectors were bolstered by
their relatively greater exposure to foreign markets, where revenues and
profits remain robust. Specific stocks that outperformed include Hess, AGCO,
Steel Dynamics, SPX Corp and Enersys.
[ ] The biggest detractor from performance for the year was our stock selection
within the Consumer Growth sector where investors bid down shares of
companies over fears of a slowdown in U.S. consumer spending. An underweight
in Utilities hurt performance as investors bid the sector up, drawn to its
defensive characteristics in a period of economic uncertainty. Specific
stocks that underperformed include Avis Budget Group, TRW Automotive,
Central Pacific Financial, Terex and Quebecor World.
[ ] In spite of significant earnings disappointments in 2007, consensus
forecasts for 2008 appear to assume that small-capitalization stocks will
regain their recent earnings growth edge vs. large-capitalization stocks. We
continue to believe that for smaller stocks as a whole, earnings
expectations for 2008 remain too optimistic, valuations too high, and
valuation spreads between stocks too narrow.
[ ] Small- and Mid-Capitalization stocks continue to trade too much as a group,
without regard for fundamentals, despite greater performance differentials
in the last year. In 2007, stocks with greater overseas revenues did
markedly better than those that were mostly domestic, and stocks reliant on
the U.S. housing sector dramatically underperformed.
[ ] Thus, our Portfolio stance remains largely unchanged. We continue to
emphasize companies with strong historical returns and current success at
attractive valuations. These companies have benefited from breadth in their
revenue streams, generating a higher share from international markets than
the universe as a whole. On average, they also tend to be larger. Thus, we
expect our average market capitalization to be larger than the benchmark for
some time to come.
[ ] Recent market distress, however, is beginning to create some new
opportunities. While our fundamental and quantitative research suggests
caution, in a few instances the return potential appears sufficiently
compelling to justify the risk. In particular, our research suggests that a
few companies with a high degree of exposure to the U.S. economy--such as
those that make and sell high-priced discretionary consumer products--have
traded down too far and thus offer attractive investment opportunities.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
MID-CAP STOCKS ARE MORE VOLATILE AND MAY BE LESS LIQUID THAN LARGE-CAP
STOCKS.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
36
SANFORD BERNSTEIN MID-CAP VALUE SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------------------------------------
Inception Inception
1 year 5 years to 12/31/07 Date
- --------------------------------------------------------------------------------------------------------------
SANFORD BERNSTEIN MID-CAP VALUE SERIES 2.00% 16.47% 8.55% 3/2/98
- --------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.18 3/2/98
- --------------------------------------------------------------------------------------------------------------
RUSSELL 2500TM VALUE INDEX -7.27 16.17 9.33 3/2/98
- --------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.33%; NET: 1.31%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07 AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/2/98. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Sanford Bernstein
Mid-Cap Value Russell 2500(TM)
Series S&P 500(R) Index Value Index
3/2/98 $10,000 $10,000 $10,000
12/98 8,863 11,895 9,375
12/99 7,951 14,409 9,515
12/00 9,295 13,086 11,493
12/01 11,431 11,532 12,613
12/02 10,454 8,983 11,367
12/03 14,737 11,562 16,475
12/04 17,744 12,818 20,029
12/05 19,116 13,450 21,579
12/06 21,966 15,572 25,934
12/07 22,405 16,428 24,048
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Industrials 23%
- ------------------------------------------------------------
Financials 20
- ------------------------------------------------------------
Materials 14
- ------------------------------------------------------------
Consumer Staples 8
- ------------------------------------------------------------
Information Technology 8
- ------------------------------------------------------------
Utilities 7
- ------------------------------------------------------------
Consumer Discretionary 6
- ------------------------------------------------------------
Other (includes short-term investments) 14
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
37
SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES ("SANFORD BERNSTEIN
SMALL-CAP VALUE") Seeks long-term capital appreciation by investing
primarily in small capitalization stocks that appear to be under valued.
Current income is a secondary investment objective.
[ ] For the 12-month reporting period the Series returned -2.10%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49% and
the Russell 2000(R) Value Index, the Series' style-specific benchmark,
returned -9.78%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The past year was a transitional one in many ways in the market for smaller
cap stocks. After a five-year period of stronger earnings growth for
small-cap stocks, in 2007 Small-Caps' earnings growth suffered a sharp
compression and ended the year at or below growth rates for larger stocks.
This shift caused investors, who had viewed the more robust earnings as a
basis for investing in the smallest riskiest stocks in the sector, to
question those judgments and the high multiples that they had awarded those
stocks. Further, with increased scarcity of sustainable earnings, the
markets rediscovered quality. The result was companies with measures of
corporate success such as trailing profitability dramatically outperformed
those with stronger value characteristics. Not surprisingly, in this
environment larger companies outperformed smaller ones and growth
outperformed value.
[ ] Exacerbating this shift was the renewed volatility seen in the markets in
the second half of the year. Investors became increasingly uncertain about
the size and scope of the subprime contagion and stocks with perceived
exposure to housing or consumer spending were sharply marked down. Sectors
with perceived safety such as consumer staples and utilities outperformed
while more economically sensitive sectors such as transports and consumer
cyclicals underperformed. The more domestic focus of small-caps was also a
headwind in this period as they gained less from the recent boom in U.S.
exports and will continue to be more vulnerable to the housing-led U.S.
economic slowdown or downturn, if one occurs.
[ ] For the year 2007, our Portfolio returned -0.8%, before fees, strongly
outperforming both its benchmark the Russell 2000 Value Index, which was
down -9.8%, and the Russell 2000 Index which was down -1.6%.
[ ] Strong stock selection was an important contributor to our premium. It was
spread over a number of sectors but was more prevalent in financials,
capital equipment and industrial resources. In financials, the portfolio
benefited from our underweight of companies most directly exposed to the
issues in the subprime markets. For industrial resources and capital
equipment, the portfolio's holdings benefited from high exposure to
international markets where economic growth was perceived to be more
sustainable. Overweighted positions in industrial resources and capital
equipment were also strong drivers of performance, as was underweighting
financials. Specific stocks that contributed to performance include Columbus
McKinnon, Steel Dynamics, Commscope, Enersys and Zoran.
[ ] The biggest detractor from performance for the year was our stock selection
in transportation where concerns over the impact of higher fuel costs and a
slowdown in the economy hurt some of our holdings. Technology stock
selection was also a detractor. Underweight positions in the utilities and
energy sectors also negatively impacted performance. Specific stocks that
underperformed include Avis Budget, Central Pacific Financial, Shoe
Carnival, Quebecor World and CTS Corp.
[ ] In spite of significant earnings disappointments in 2007,
consensus forecasts for 2008 appear to assume that small-capitalization
stocks will regain their recent earnings growth edge vs.
Large-Capitalization stocks. We continue to believe that for smaller stocks
as a whole, earnings expectations for 2008 remain too optimistic, valuations
too high, and valuation spreads between stocks too narrow.
[ ] Small-Capitalization stocks continue to trade too much as a group, without
regard for fundamentals, despite greater performance differentials in the
last year. In 2007, stocks with greater overseas revenues did markedly
better than those that were mostly domestic, and stocks reliant on the U.S.
housing sector dramatically underperformed.
[ ] Thus, our Portfolio stance remains largely unchanged. We continue to
emphasize companies with strong historical returns and current success at
attractive valuations. These companies have benefited from breadth in their
revenue steams, generating a higher share from international markets than
the universe as a whole. On average, they also tend to be larger. Thus, we
expect our average market capitalization to be larger than the benchmark for
some time to come.
[ ] Recent market distress, however, is beginning to create some new
opportunities. While our fundamental and quantitative research suggests
caution, in a few instances the return potential appears sufficiently
compelling to justify the risk. In particular, our research suggests that a
few companies with a high degree of exposure to the U.S. economy--such as
those that make and sell high-priced discretionary consumer products--have
traded down too far and thus offer attractive investment opportunities.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
SMALL-CAP INVESTING INCLUDES THE RISK OF GREATER PRICE VOLATILITY, LESS
LIQUIDITY AND INCREASED COMPETITIVE THREAT.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
38
SANFORD BERNSTEIN SMALL-CAP VALUE SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------------------------------------------------
Inception Inception
1 year 5 years to 12/31/07 Date
- --------------------------------------------------------------------------------------------------------------------------
SANFORD BERNSTEIN SMALL-CAP VALUE SERIES -2.10% 16.73% 13.37% 11/20/00
- --------------------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 3.02 11/20/00
- --------------------------------------------------------------------------------------------------------------------------
RUSSELL 2000(R) VALUE INDEX -9.78 15.80 12.43 11/20/00
- --------------------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.35%; NET: 1.30%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 11/20/00. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Sanford Bernstein
Small-Cap Value Russell 2000(R)
Series S&P 500(R) Index Value Index
11/20/00 $10,000 $10,000 $10,000
12/00 10,644 9,844 10,945
12/01 12,321 8,675 12,479
12/02 11,269 6,758 11,054
12/03 16,212 8,699 16,141
12/04 19,888 9,643 19,732
12/05 21,371 10,119 20,661
12/06 24,950 11,715 25,512
12/07 24,426 12,359 23,018
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Industrials 25%
- ------------------------------------------------------------
Financials 22
- ------------------------------------------------------------
Materials 15
- ------------------------------------------------------------
Health Care 9
- ------------------------------------------------------------
Consumer Discretionary 8
- ------------------------------------------------------------
Information Technology 7
- ------------------------------------------------------------
Consumer Staples 7
- ------------------------------------------------------------
Other (includes short-term investments) 6
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
39
VAN KAMPEN COMSTOCK SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-VAN KAMPEN COMSTOCK SERIES ("VAN KAMPEN COMSTOCK") Seeks long-term
capital appreciation. The Series has a secondary investment objective to
seek current income.
[ ] For the 12-month reporting period the Series returned -2.22%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49% and
the Russell 1000(R) Value Index, the Series' style-specific benchmark,
returned -0.17%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] Despite the strong performance of the broad stock market in the first half
of the year, rising uncertainties about the economy dampened performance in
the second half of the year. Investors worried about how well the U.S.
economy would weather ever-higher oil prices, a weakening housing market and
slackening consumer spending, as well as the effects of an economic slowdown
on corporate profitability. Against this backdrop, the broad market (as
measured by the S&P 500 Index) had a small gain of 5.49%, while large cap
value stocks lagged with a return of -0.17% (as measured by the Russell 1000
Value Index) for the period.
[ ] In the 12-month period, stocks experienced several periods of significant
volatility, such as in July and October-November, in which investors briefly
rotated away from cyclical areas of the market (those with greater economic
sensitivity such as materials and energy) that have driven performance for
the past several years. During these periods of volatility, the Portfolio's
holdings of undervalued stocks performed relatively well, as we would expect
the Portfolio to do in this type of environment. Because of our emphasis on
stocks with reasonable valuations relative to our assessment of fair value,
the Portfolio had no exposure to the richly valued cyclical stocks, which
therefore minimized some of the damage to the Portfolio caused by these
sharp downdrafts.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] The primary detractor from performance relative to both indexes was the
Portfolio's lack of exposure to the energy sector. Within both indexes,
energy was the best-performing sector for the period as oil prices continued
to soar. However, we believe energy stock valuations are too expensive based
on our strict risk-reward criteria.
[ ] Relative to the S&P 500(R) Index, an overweight allocation in the financials
sector further dampened relative performance, as the sector was among the
weakest performing groups in the index during the period. The health care
sector was another area of relative weakness. Two pharmaceutical holdings
declined after the FDA did not approve their late-stage drugs. Conversely,
stock selection and a resulting overweight allocation in the consumer
staples sector were chief contributors to positive relative performance
during the period. Stock selection in the telecommunication services sector
also added to relative performance.
[ ] Relative to the Russell 1000(R) Value Index, other notable detractors from
performance were the utilities and industrials sectors. The Portfolio had
minimal utilities stocks, given their expensive valuations, and the sector
performed well owing to high energy prices. The Portfolio also had minimal
exposure to the industrials sector, which benefited from strong economic
growth over the past several years. However, the Portfolio's largest
positive contribution came from our stock selection and the resulting
underweight allocation in the financials sector. Within the sector, the
Portfolio owned holdings in banks, brokerages, insurers, and government
sponsored enterprises. Strong stock selection and a resulting overweight
position in the consumer staples sector also bolstered the Portfolio's
relative performance.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING INTERNATIONALLY INVOLVES RISKS NOT ASSOCIATED WITH INVESTING
SOLELY IN THE U.S., SUCH AS CURRENCY FLUCTUATION, POLITICAL RISK,
DIFFERENCES IN ACCOUNTING AND THE LIMITED AVAILABILITY OF INFORMATION.
THE ECONOMIES OF DEVELOPING COUNTRIES MAY BE ADVERSELY AFFECTED BY TRADE
BARRIERS, EXCHANGE CONTROLS, MANAGED ADJUSTMENTS IN RELATIVE CURRENCY VALUES
AND OTHER PROTAGONIST MEASURES IMPOSED OR NEGOTIATED BY THE COUNTRIES WITH
WHICH THEY TRADE.
THE SERIES' USE OF DERIVATIVES SUCH AS FUTURES, OPTIONS AND SWAP AGREEMENTS
TO PURSUE THEIR INVESTMENT OBJECTIVES MAY EXPOSE THE SERIES TO ADDITIONAL
RISKS THAT IT WOULD NOT BE SUBJECT TO IF IT INVESTED DIRECTLY IN THE
SECURITIES UNDERLYING THOSE DERIVATIVES. THESE RISKS MAY CAUSE THE SERIES TO
EXPERIENCE HIGHER LOSSES THAN SERIES THAT DO NOT USE DERIVATIVES.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
40
VAN KAMPEN COMSTOCK SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------------------------------------------------
Inception Inception
1 year 5 years to 12/31/07 Date
- --------------------------------------------------------------------------------------------------------------------------
VAN KAMPEN COMSTOCK SERIES -2.22% 11.76% 7.48% 3/2/98
- --------------------------------------------------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.18 3/2/98
- --------------------------------------------------------------------------------------------------------------------------
RUSSELL 1000(R) VALUE INDEX -0.17 14.63 7.23 3/2/98
- --------------------------------------------------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 1.00%; NET: 0.95%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07 AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/2/98. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Van Kampen Russell 1000(R)
Comstock Series S&P 500(R) Index Value Index
3/2/98 $10,000 $10,000 $10,000
12/98 11,079 11,895 10,965
12/99 13,775 14,409 11,771
12/00 18,205 13,086 12,597
12/01 14,935 11,532 11,893
12/02 11,660 8,983 10,047
12/03 14,443 11,562 13,064
12/04 16,309 12,818 15,218
12/05 17,194 13,450 16,292
12/06 20,787 15,572 19,916
12/07 20,327 16,428 19,882
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Financials 26%
- ------------------------------------------------------------
Consumer Staples 19
- ------------------------------------------------------------
Health Care 17
- ------------------------------------------------------------
Consumer Discretionary 12
- ------------------------------------------------------------
Materials 8
- ------------------------------------------------------------
Information Technology 6
- ------------------------------------------------------------
Telecommunication Services 5
- ------------------------------------------------------------
Other (includes short-term investments) 7
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
41
VAN KAMPEN EQUITY 500 INDEX SERIES
PRODUCT MANAGER COMMENTARY
[ ] PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES ("VAN KAMPEN EQUITY 500 INDEX")
Seeks high total return.
[ ] For the 12-month reporting period the Series returned 4.87%. For the same
period, the S&P 500(R) Index, a broad-based equity index, returned 5.49%.
ALL PERFORMANCE FIGURES ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND EXCLUDE
THE EFFECT OF FEES AND EXPENSES ASSOCIATED WITH THE VARIABLE LIFE INSURANCE
OR ANNUITY PRODUCT THROUGH WHICH YOU INVEST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER
THAN THE PERFORMANCE SHOWN.
HOW DID THE EQUITY MARKETS PERFORM DURING THE SERIES' FISCAL YEAR?
[ ] The S&P 500(R) Index returned a moderate gain of 5.49% for the year ended
December 31, 2007. Stock price volatility was much more pronounced in 2007
than it had been over the past several years, largely driven by investor
uncertainty as to the short- and long-term impacts of the subprime mortgage
market's troubles on the broader economy. In the first quarter, investors
took notice of distress signs in the subprime market, which fueled stock
price turbulence in March. Yet, corporate profits stayed positive and
economic data was generally favorably, contributing to the belief that the
effect of the subprime event would be contained.
[ ] However, by the third quarter, subprime troubles spilled into the credit
market and the broader economy. A tightening in credit standards, mortgage
lender bankruptcies and hedge fund implosions were followed by multi-billion
dollar losses reported at several large financial institutions in the fourth
quarter. At the same time, a cross current of unfavorable data buffeted the
market, indicating a languishing housing market, declining consumer
spending, rising oil prices and negative year-over-year corporate profit
growth.
[ ] A series of reductions to both the discount rate and the target federal
funds rate from the Federal Reserve (the "Fed") helped financial markets
regain their footing at several points in the third and fourth quarters. In
fact, the S&P 500 Index reached a record high early in the fourth quarter.
However, skepticism quickly returned as investors worried that the Fed's
ability to steer the economy away from recession would be limited by
potentially rising inflation. Fourth quarter corporate earnings expectations
were dismal, with only the largest multi-national companies expected to
generate growth through their exposure to international markets.
WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE DURING ITS FISCAL YEAR?
[ ] Within the S&P 500 Index and therefore the Fund, eight of the ten sectors
had positive absolute performance during the period, led by energy. Rising
energy prices in 2007 continued to provide a favorable backdrop for energy
companies to generate significant earnings. The materials sector also
performed very well, benefiting from a strong global economic backdrop and
robust demand for materials, particularly in China and India. The utilities
sector also placed within the top three performing sectors, as utilities
companies garnered considerable pricing power from the rising energy price
environment.
[ ] The two negative returning sectors in the Index and Fund were consumer
discretionary and financials. Investors generally avoided consumer- related
stocks as a weakening housing market, high energy prices and tightening
credit standards did not bode well for consumers' ability to spend. Such
fears were validated by declining consumer confidence and retail sales data
in the second half of 2007 and disappointing receipts from the holiday
shopping season.
[ ] Because the S&P 500 Index is market capitalization weighted (and that the
Fund seeks to replicate the performance attributes of the S&P 500 Index
before Fund fees), the overall contribution of each sector was influenced by
its relative size within the S&P 500 Index and the Fund portfolio. As such,
the sectors that contributed most to the Fund's return were energy and
technology, while financials and consumer discretionary were the largest
detractors.
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. ANY SUCH
OPINIONS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR CONDITIONS
AND SHOULD NOT BE RELIED ON AS INVESTMENT ADVICE.
INVESTING INTERNATIONALLY INVOLVES RISKS NOT ASSOCIATED WITH INVESTING
SOLELY IN THE U.S., SUCH AS CURRENCY FLUCTUATION, POLITICAL RISK,
DIFFERENCES IN ACCOUNTING AND THE LIMITED AVAILABILITY OF INFORMATION.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
42
VAN KAMPEN EQUITY 500 INDEX SERIES (CONTINUED)
AVERAGE ANNUAL TOTAL RETURN(1) for periods ended 12/31/07
- --------------------------------------------------------------------------------
1 year 5 years 10 years
- --------------------------------------------------------------------------------
VAN KAMPEN EQUITY 500 INDEX SERIES 4.87% 11.48% 4.84%
- --------------------------------------------------------------------------------
S&P 500(R) INDEX 5.49 12.83 5.92
- --------------------------------------------------------------------------------
SERIES EXPENSE RATIOS(2): GROSS: 0.77%; NET: 0.63%.
RETURNS REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. TOTAL
RETURN DOES NOT REFLECT EXPENSES ASSOCIATED WITH THE SEPARATE ACCOUNT SUCH AS
THE ADMINISTRATIVE FEES, ACCOUNT CHARGES AND SURRENDER CHARGES, WHICH IF
REFLECTED, WOULD REDUCE TOTAL RETURN. PERFORMANCE FIGURES MAY REFLECT VOLUNTARY
FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IN THE ABSENCE OF VOLUNTARY FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
PLEASE VISIT PHOENIXWM.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 THE EXPENSE RATIO(S) OF THE SERIES, BOTH NET AND GROSS ARE SET FORTH ACCORDING
TO THE PROSPECTUS FOR THE SERIES EFFECTIVE 5/1/07, AND MAY DIFFER FROM THE
EXPENSE RATIOS DISCLOSED IN THE FINANCIAL HIGHLIGHTS TABLES IN THIS REPORT.
NET EXPENSES: EXPENSES REDUCED BY A CONTRACTUAL WAIVER IN EFFECT THROUGH
4/30/08. GROSS EXPENSES: DO NOT REFLECT THE EFFECT OF THE CONTRACTUAL WAIVER.
GROWTH OF $10,000 For periods ended 12/31
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/97. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period.
[LINE GRAPH OMITTED]
PLOT POINTS FOR EDGAR PURPOSES ARE AS FOLLOWS:
Van Kampen
Equity 500 Index Series S&P 500(R) Index
12/97 $10,000 $10,000
12/98 13,168 12,876
12/99 15,651 15,597
12/00 13,856 14,164
12/01 12,207 12,482
12/02 9,316 9,723
12/03 11,759 12,515
12/04 12,916 13,875
12/05 13,393 14,558
12/06 15,296 16,856
12/07 16,041 17,782
SECTOR WEIGHTINGS as of 12/31/07*
- ------------------------------------------------------------
- ------------------------------------------------------------
Financials 17%
- ------------------------------------------------------------
Information Technology 17
- ------------------------------------------------------------
Energy 13
- ------------------------------------------------------------
Health Care 12
- ------------------------------------------------------------
Industrials 11
- ------------------------------------------------------------
Consumer Staples 10
- ------------------------------------------------------------
Consumer Discretionary 8
- ------------------------------------------------------------
Other (includes short-term investments) 12
- ------------------------------------------------------------
* % of total investments as of December 31, 2007.
For information regarding the indexes and certain investment terms
see the glossary starting on page 2.
43
PHOENIX CAPITAL GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--95.8%
AEROSPACE & DEFENSE--5.7%
Boeing Co. (The) 6,336 $ 554
Goodrich Corp. 123,800 8,742
Lockheed Martin Corp. 90,700 9,547
Precision Castparts Corp. 19,850 2,753
United Technologies Corp. 13,552 1,037
--------
22,633
--------
AIRLINES--0.8%
Continental Airlines, Inc.
Class B(b)(d) 139,450 3,103
--------
APPLICATION SOFTWARE--1.0%
Autodesk, Inc.(b) 76,900 3,827
--------
ASSET MANAGEMENT & CUSTODY BANKS--0.9%
Janus Capital Group, Inc.(d) 109,950 3,612
--------
BIOTECHNOLOGY--3.5%
Amgen, Inc.(b) 6,161 286
Gilead Sciences, Inc.(b) 302,564 13,921
--------
14,207
--------
COMMODITY CHEMICALS--0.9%
Celanese Corp. Series A 88,600 3,750
--------
COMMUNICATIONS EQUIPMENT--3.5%
Cisco Systems, Inc.(b) 498,646 13,498
QUALCOMM, Inc. 15,745 620
--------
14,118
--------
COMPUTER HARDWARE--7.9%
Apple, Inc.(b) 78,000 15,450
Dell, Inc.(b) 253,700 6,218
Hewlett-Packard Co. 138,366 6,985
International Business
Machines Corp. 26,100 2,822
--------
31,475
--------
COMPUTER STORAGE & PERIPHERALS--1.5%
EMC Corp.(b) 330,650 6,127
--------
CONSTRUCTION & FARM MACHINERY &
HEAVY TRUCKS--1.7%
Cummins, Inc. 23,950 3,050
Deere & Co. 42,500 3,958
--------
7,008
--------
DISTILLERS & VINTNERS--1.0%
Constellation Brands, Inc.
Class A(b) 163,450 3,864
--------
DIVERSIFIED METALS & MINING--3.2%
Freeport-McMoRan Copper &
Gold, Inc. (Indonesia)(c) 123,800 12,682
--------
VALUE
SHARES (000)
------- --------
ELECTRICAL COMPONENTS & EQUIPMENT--0.2%
Emerson Electric Co. 15,274 $ 865
--------
ENVIRONMENTAL & FACILITIES SERVICES--2.5%
Allied Waste Industries,
Inc.(b)(d) 890,850 9,817
--------
FOOD RETAIL--0.6%
Kroger Co. (The) 91,950 2,456
--------
FOOTWEAR--0.7%
NIKE, Inc. Class B 42,550 2,733
--------
HEALTH CARE EQUIPMENT--1.0%
Baxter International, Inc. 69,400 4,029
--------
HEALTH CARE SERVICES--2.4%
Express Scripts, Inc.(b) 131,800 9,621
--------
HOUSEHOLD PRODUCTS--2.4%
Colgate-Palmolive Co. 84,731 6,606
Energizer Holdings, Inc.(b)(d) 26,350 2,954
--------
9,560
--------
INDEPENDENT POWER PRODUCERS &
ENERGY TRADERS--2.2%
AES Corp. (The) 128,300 2,744
NRG Energy, Inc.(b)(d) 141,600 6,137
--------
8,881
--------
INDUSTRIAL CONGLOMERATES--0.8%
General Electric Co. 89,300 3,310
--------
INTEGRATED OIL & GAS--3.2%
Exxon Mobil Corp. 98,400 9,219
Occidental Petroleum
Corp. 44,800 3,449
--------
12,668
--------
INTERNET RETAIL--1.6%
Amazon.com, Inc.(b) 34,100 3,159
Expedia, Inc.(b)(d) 98,850 3,126
--------
6,285
--------
INTERNET SOFTWARE & SERVICES--1.6%
eBay, Inc.(b) 160,750 5,335
Google, Inc. Class A(b) 1,400 968
--------
6,303
--------
INVESTMENT BANKING & BROKERAGE--1.0%
Goldman Sachs Group, Inc.
(The) 5,100 1,097
Morgan Stanley 56,920 3,023
--------
4,120
--------
VALUE
SHARES (000)
------- --------
LIFE SCIENCES TOOLS & SERVICES--2.2%
Invitrogen Corp.(b) 54,050 $ 5,049
Waters Corp.(b) 46,450 3,673
--------
8,722
--------
MANAGED HEALTH CARE--3.9%
Aetna, Inc. 52,900 3,054
CIGNA Corp. 46,150 2,480
Health Net, Inc.(b) 16,589 801
Humana, Inc.(b) 82,450 6,209
UnitedHealth Group, Inc. 51,550 3,000
--------
15,544
--------
METAL & GLASS CONTAINERS--2.1%
Owens-Illinois, Inc.(b) 168,350 8,333
--------
MOVIES & ENTERTAINMENT--3.6%
News Corp. Class A 37,792 774
Regal Entertainment Group
Class A(d) 351,750 6,356
Walt Disney Co. (The) 227,600 7,347
--------
14,477
--------
OIL & GAS EQUIPMENT & SERVICES--4.1%
Baker Hughes, Inc. 10,515 853
BJ Services Co.(d) 15,747 382
Global Industries Ltd.(b) 218,650 4,683
Halliburton Co. 63,250 2,398
National Oilwell Varco,
Inc.(b) 112,000 8,228
--------
16,544
--------
OIL & GAS REFINING & MARKETING--2.1%
Frontier Oil Corp. 124,950 5,070
Valero Energy Corp. 49,200 3,446
--------
8,516
--------
PHARMACEUTICALS--5.8%
Abbott Laboratories 6,212 349
Johnson & Johnson 6,954 464
Merck & Co., Inc. 164,700 9,571
Schering-Plough Corp. 146,150 3,893
Watson Pharmaceuticals,
Inc.(b) 303,900 8,248
Wyeth 13,718 606
--------
23,131
--------
PROPERTY & CASUALTY INSURANCE--1.4%
Berkley (W.R.) Corp. 194,300 5,792
--------
RAILROADS--0.7%
Burlington Northern
Santa Fe Corp. 5,417 451
Norfolk Southern Corp. 46,150 2,328
--------
2,779
--------
See Notes to Financial Statements
44
PHOENIX CAPITAL GROWTH SERIES
VALUE
SHARES (000)
------- --------
RESTAURANTS--1.1%
Yum! Brands, Inc. 119,700 $ 4,581
--------
SEMICONDUCTOR EQUIPMENT--2.8%
Applied Materials, Inc. 526,800 9,356
Lam Research Corp.(b) 46,200 1,997
--------
11,353
--------
SEMICONDUCTORS--2.4%
Intel Corp. 250,550 6,680
NVIDIA Corp.(b) 85,650 2,914
--------
9,594
--------
SOFT DRINKS--2.4%
Pepsi Bottling Group, Inc.
(The) 233,900 9,230
PepsiCo, Inc. 7,139 542
--------
9,772
--------
SPECIALIZED FINANCE--0.8%
Nasdaq Stock Market, Inc.
(The)(b)(d) 66,200 3,276
--------
SPECIALTY CHEMICALS--0.8%
Sigma-Aldrich Corp. 57,450 3,137
--------
SPECIALTY STORES--0.1%
PetSmart, Inc. 20,256 477
--------
SYSTEMS SOFTWARE--7.7%
Microsoft Corp. 418,479 14,898
Oracle Corp.(b) 714,500 16,133
--------
31,031
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $313,730) 384,113
- ----------------------------------------------------------------------------
VALUE
SHARES (000)
------- --------
FOREIGN COMMON STOCKS(c)--2.9%
COMMUNICATIONS EQUIPMENT--2.9%
Nokia Oyj Sponsored ADR
(Finland) 146,000 $ 5,605
Research In Motion Ltd.
(Canada)(b) 52,700 5,976
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $11,398) 11,581
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--98.7%
(IDENTIFIED COST $325,128) 395,694
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--7.8%
MONEY MARKET MUTUAL FUNDS--6.5%
State Street Navigator Prime
Plus (4.88% seven-day
effective yield)(e) 25,979,590 25,980
--------
PAR
VALUE
(000)
-------
COMMERCIAL PAPER(f)--1.3%
Nicor, Inc.
4.000% due 1/2/08 $5,125 5,124
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $31,104) 31,104
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--106.5%
(IDENTIFIED COST $356,232) 426,798(a)
Other assets and liabilities, net--(6.5)% (26,186)
--------
NET ASSETS--100.0% $400,612
========
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$78,466 and gross depreciation of $10,131 for federal income tax purposes.
At December 31, 2007, the aggregate cost of securities for federal income
tax purposes was $358,463.
(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) All or a portion of security is on loan.
(e) Represents security purchased with cash collateral received for securities
on loan.
(f) The rate shown is the discount rate.
See Notes to Financial Statements
45
PHOENIX GROWTH AND INCOME SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--97.7%
AEROSPACE & DEFENSE--5.2%
Boeing Co. (The) 20,100 $ 1,758
General Dynamics Corp. 5,200 463
Honeywell International,
Inc. 16,800 1,034
Lockheed Martin Corp. 13,000 1,368
Northrop Grumman Corp. 8,400 661
Raytheon Co. 9,100 552
United Technologies Corp. 31,300 2,396
--------
8,232
--------
AIR FREIGHT & LOGISTICS--0.2%
United Parcel Service, Inc.
Class B 5,200 368
--------
AIRLINES--0.1%
AMR Corp.(b) 10,600 149
Continental Airlines, Inc.
Class B(b) 3,800 84
--------
233
--------
APPAREL RETAIL--0.5%
Aeropostale, Inc.(b) 7,000 186
Gap, Inc. (The) 23,700 504
Men's Wearhouse, Inc.
(The) 4,500 121
--------
811
--------
APPAREL, ACCESSORIES & LUXURY GOODS--0.2%
VF Corp. 5,700 391
--------
APPLICATION SOFTWARE--0.2%
Aspen Technology, Inc.(b) 16,900 274
--------
ASSET MANAGEMENT & CUSTODY BANKS--3.4%
Ameriprise Financial, Inc. 4,100 226
Bank of New York Mellon
Corp. (The) 25,315 1,235
Federated Investors, Inc.
Class B 8,800 362
Franklin Resources, Inc. 5,700 652
Legg Mason, Inc. 6,600 483
Northern Trust Corp. 10,600 812
SEI Investments Co. 12,600 405
State Street Corp. 15,200 1,234
--------
5,409
--------
AUTO PARTS & EQUIPMENT--0.4%
American Axle & Manufacturing
Holdings, Inc. 5,400 100
Lear Corp.(b) 17,200 476
--------
576
--------
AUTOMOBILE MANUFACTURERS--0.1%
Thor Industries, Inc. 5,000 190
--------
VALUE
SHARES (000)
------- --------
BIOTECHNOLOGY--0.6%
Cephalon, Inc.(b) 1,900 $ 137
OSI Pharmaceuticals,
Inc.(b) 17,900 868
--------
1,005
--------
BREWERS--0.7%
Anheuser-Busch Cos., Inc. 20,400 1,068
--------
BROADCASTING & CABLE TV--0.6%
CBS Corp. Class B 35,500 967
--------
BUILDING PRODUCTS--0.2%
Masco Corp. 15,700 339
--------
COAL & CONSUMABLE FUELS--0.4%
Massey Energy Co. 18,500 661
--------
COMMERCIAL PRINTING--0.3%
RR Donnelley & Sons Co. 12,700 479
--------
COMMUNICATIONS EQUIPMENT--1.8%
Cisco Systems, Inc.(b) 102,800 2,783
--------
COMPUTER & ELECTRONICS RETAIL--0.1%
RadioShack Corp. 12,100 204
--------
COMPUTER HARDWARE--3.9%
Hewlett-Packard Co. 52,700 2,660
International Business
Machines Corp. 32,400 3,503
NCR Corp.(b) 3,300 83
--------
6,246
--------
COMPUTER STORAGE & PERIPHERALS--0.4%
Emulex Corp.(b) 18,500 302
Network Appliance, Inc.(b) 10,300 257
QLogic Corp.(b) 10,300 146
--------
705
--------
CONSTRUCTION & ENGINEERING--0.1%
Perini Corp.(b) 1,800 75
--------
CONSTRUCTION & FARM MACHINERY &
HEAVY TRUCKS--0.7%
AGCO Corp.(b) 7,600 517
Cummins, Inc. 1,200 153
Toro Co. (The) 7,300 397
--------
1,067
--------
DATA PROCESSING & OUTSOURCED SERVICES--1.4%
Automatic Data Processing,
Inc. 15,000 668
Computer Sciences Corp.(b) 8,400 416
Electronic Data Systems
Corp. 23,500 487
Fiserv, Inc.(b) 13,100 727
--------
2,298
--------
VALUE
SHARES (000)
------- --------
DIVERSIFIED BANKS--1.3%
Comerica, Inc. 6,900 $ 300
Wells Fargo & Co. 56,200 1,697
--------
1,997
--------
DIVERSIFIED CHEMICALS--0.9%
Dow Chemical Co. (The) 12,900 509
E.I. du Pont de Nemours & Co. 20,300 895
--------
1,404
--------
DIVERSIFIED COMMERCIAL &
PROFESSIONAL SERVICES--0.3%
Dun & Bradstreet Corp. 5,000 443
--------
DIVERSIFIED METALS & MINING--0.5%
Freeport-McMoRan Copper &
Gold, Inc. (Indonesia)(c) 2,900 297
Southern Copper Corp. 4,300 452
--------
749
--------
ELECTRIC UTILITIES--1.2%
FirstEnergy Corp. 26,400 1,910
--------
ELECTRICAL COMPONENTS & EQUIPMENT--1.1%
Emerson Electric Co. 28,100 1,592
GrafTech International
Ltd.(b) 6,400 114
--------
1,706
--------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.4%
Agilent Technologies,
Inc.(b) 18,400 676
--------
ELECTRONIC MANUFACTURING SERVICES--0.4%
Tyco Electronics Ltd. 15,600 579
--------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.1%
Terra Industries, Inc.(b) 2,500 119
--------
FOOD RETAIL--0.5%
Kroger Co. (The) 17,500 467
SUPERVALU, Inc. 6,600 248
--------
715
--------
FOOTWEAR--0.6%
NIKE, Inc. Class B 14,700 944
--------
GENERAL MERCHANDISE STORES--0.2%
Big Lots, Inc.(b) 10,800 173
Family Dollar Stores, Inc. 10,300 198
--------
371
--------
HEALTH CARE DISTRIBUTORS--1.1%
Cardinal Health, Inc. 12,300 710
McKesson Corp. 15,600 1,022
--------
1,732
--------
See Notes to Financial Statements
46
PHOENIX GROWTH AND INCOME SERIES
VALUE
SHARES (000)
------- --------
HEALTH CARE EQUIPMENT--0.6%
Baxter International, Inc. 15,200 $ 882
--------
HEALTH CARE SERVICES--0.3%
Medco Health Solutions,
Inc.(b) 3,900 395
--------
HOME IMPROVEMENT RETAIL--0.6%
Sherwin-Williams Co.
(The) 17,000 987
--------
HOUSEHOLD APPLIANCES--0.3%
Stanley Works (The) 6,200 301
Whirlpool Corp. 2,800 228
--------
529
--------
HOUSEHOLD PRODUCTS--1.2%
Clorox Co. (The) 14,200 925
Kimberly-Clark Corp. 5,700 395
Procter & Gamble Co.
(The) 8,900 654
--------
1,974
--------
HOUSEWARES & SPECIALTIES--0.3%
American Greetings Corp.
Class A 6,300 128
Newell Rubbermaid, Inc. 12,700 329
--------
457
--------
HYPERMARKETS & SUPER CENTERS--0.7%
BJ's Wholesale Club, Inc.(b) 8,400 284
Wal-Mart Stores, Inc. 18,000 856
--------
1,140
--------
INDUSTRIAL CONGLOMERATES--0.8%
Teleflex, Inc. 3,500 221
Tyco International Ltd. 28,225 1,119
--------
1,340
--------
INDUSTRIAL MACHINERY--1.5%
Dover Corp. 4,100 189
Eaton Corp. 13,200 1,280
Gardner Denver, Inc.(b) 5,300 175
Parker Hannifin Corp. 9,250 696
--------
2,340
--------
INSURANCE BROKERS--0.3%
AON Corp. 11,400 544
--------
INTEGRATED OIL & GAS--9.1%
Chevron Corp. 14,300 1,334
ConocoPhillips 19,200 1,695
Exxon Mobil Corp. 75,000 7,027
Marathon Oil Corp. 9,100 554
Occidental Petroleum
Corp. 49,600 3,819
--------
14,429
--------
INTEGRATED TELECOMMUNICATION SERVICES--3.8%
AT&T, Inc. 101,205 4,206
Qwest Communications
International, Inc.(b) 39,900 280
VALUE
SHARES (000)
------- --------
INTEGRATED TELECOMMUNICATION SERVICES--CONTINUED
Verizon Communications,
Inc. 21,100 $ 922
Windstream Corp. 48,100 626
--------
6,034
--------
INTERNET RETAIL--0.3%
Expedia, Inc.(b) 4,900 155
IAC/InterActiveCorp.(b) 9,800 264
--------
419
--------
INTERNET SOFTWARE & SERVICES--0.6%
eBay, Inc.(b) 30,500 1,012
--------
INVESTMENT BANKING & BROKERAGE--1.2%
Charles Schwab Corp. (The) 15,500 396
Goldman Sachs Group, Inc. (The) 5,700 1,226
TD Ameritrade Holding Corp.(b) 16,800 337
--------
1,959
--------
LEISURE PRODUCTS--0.1%
Hasbro, Inc. 5,500 141
--------
LIFE & HEALTH INSURANCE--3.9%
AFLAC, Inc. 11,900 745
Lincoln National Corp. 15,200 885
MetLife, Inc. 33,500 2,064
Principal Financial Group, Inc. (The) 13,100 902
Prudential Financial, Inc. 15,300 1,424
StanCorp Financial Group, Inc. 2,500 126
Unum Group 5,200 124
--------
6,270
--------
LIFE SCIENCES TOOLS & SERVICES--0.2%
Invitrogen Corp.(b) 3,900 364
--------
MANAGED HEALTH CARE--3.0%
Aetna, Inc. 18,400 1,062
CIGNA Corp. 12,600 677
Coventry Health Care,
Inc.(b) 3,000 178
UnitedHealth Group, Inc. 30,000 1,746
WellPoint, Inc.(b) 11,900 1,044
--------
4,707
--------
METAL & GLASS CONTAINERS--0.2%
Ball Corp. 3,300 148
Owens-Illinois, Inc.(b) 4,600 228
--------
376
--------
MORTGAGE REITS--0.5%
Annaly Capital Management, Inc. 40,200 731
CapitalSource, Inc. 5,200 91
--------
822
--------
VALUE
SHARES (000)
------- --------
MOVIES & ENTERTAINMENT--2.8%
Time Warner, Inc. 76,900 $ 1,269
Viacom, Inc. Class B(b) 34,700 1,524
Walt Disney Co. (The) 52,500 1,695
--------
4,488
--------
MULTI-LINE INSURANCE--1.8%
American International
Group, Inc. 46,200 2,694
Hartford Financial Services
Group, Inc. (The) 2,000 174
--------
2,868
--------
MULTI-UTILITIES--0.8%
Public Service Enterprise
Group, Inc. 13,600 1,336
--------
OFFICE ELECTRONICS--0.1%
Xerox Corp. 7,600 123
--------
OIL & GAS DRILLING--0.8%
ENSCO International, Inc. 3,000 179
Transocean, Inc. 7,600 1,088
--------
1,267
--------
OIL & GAS EQUIPMENT & SERVICES--1.2%
Dresser-Rand Group, Inc.(b) 7,100 277
National Oilwell Varco, Inc.(b) 16,100 1,183
Tidewater, Inc. 7,600 417
--------
1,877
--------
OIL & GAS EXPLORATION & PRODUCTION--0.4%
Devon Energy Corp. 1,500 133
Noble Energy, Inc. 1,800 143
W&T Offshore, Inc. 10,900 327
--------
603
--------
OIL & GAS REFINING & MARKETING--0.5%
Holly Corp. 3,300 168
Valero Energy Corp. 8,500 595
--------
763
--------
OTHER DIVERSIFIED FINANCIAL SERVICES--5.0%
Bank of America Corp. 94,300 3,891
Citigroup, Inc. 9,800 288
JPMorgan Chase & Co. 85,400 3,728
--------
7,907
--------
PACKAGED FOODS & MEATS--0.4%
General Mills, Inc. 9,800 559
--------
PAPER PACKAGING--0.2%
Packaging Corporation of
America 13,200 372
--------
PERSONAL PRODUCTS--0.3%
NBTY, Inc.(b) 17,500 480
--------
See Notes to Financial Statements
47
PHOENIX GROWTH AND INCOME SERIES
VALUE
SHARES (000)
------- --------
PHARMACEUTICALS--6.9%
Abbott Laboratories 7,300 $ 410
Bristol-Myers Squibb Co. 13,500 358
Endo Pharmaceuticals
Holdings, Inc.(b) 8,600 229
Forest Laboratories, Inc.(b) 13,300 485
Johnson & Johnson 52,000 3,469
Merck & Co., Inc. 52,700 3,062
Pfizer, Inc. 116,700 2,653
Wyeth 8,600 380
--------
11,046
--------
PHOTOGRAPHIC PRODUCTS--0.1%
Eastman Kodak Co. 9,800 214
--------
PROPERTY & CASUALTY INSURANCE--1.4%
Chubb Corp. (The) 6,500 355
Cincinnati Financial Corp. 5,800 229
Philadelphia Consolidated
Holding Co.(b) 3,000 118
Travelers Cos., Inc. (The) 27,900 1,501
--------
2,203
--------
RAILROADS--0.2%
Norfolk Southern Corp. 7,600 383
--------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.0%
Jones Lang LaSalle, Inc. 1,000 71
--------
REGIONAL BANKS--0.6%
Bank of Hawaii Corp. 1,900 97
KeyCorp 12,200 286
Regions Financial Corp. 14,500 343
SunTrust Banks, Inc. 2,700 169
--------
895
--------
RESTAURANTS--1.9%
McDonald's Corp. 36,400 2,144
Yum! Brands, Inc. 23,400 896
--------
3,040
--------
SEMICONDUCTOR EQUIPMENT--1.1%
Applied Materials, Inc. 43,800 778
Lam Research Corp.(b) 5,100 221
MEMC Electronic Materials,
Inc.(b) 3,700 327
Novellus Systems, Inc.(b) 13,000 358
--------
1,684
--------
SEMICONDUCTORS--2.0%
Amkor Technology, Inc.(b) 15,300 131
VALUE
SHARES (000)
------- --------
SEMICONDUCTORS--CONTINUED
Integrated Device
Technology, Inc.(b) 21,900 $ 248
Intel Corp. 48,400 1,290
NVIDIA Corp.(b) 16,950 577
Texas Instruments, Inc. 29,800 995
--------
3,241
--------
SOFT DRINKS--1.6%
Coca-Cola Co. (The) 22,600 1,387
Pepsi Bottling Group, Inc.
(The) 29,100 1,148
--------
2,535
--------
SPECIALIZED REITS--0.3%
FelCor Lodging Trust, Inc. 14,500 226
Host Hotels & Resorts,
Inc. 12,500 213
--------
439
--------
SPECIALTY CHEMICALS--0.1%
H.B. Fuller Co. 8,400 189
--------
STEEL--0.3%
AK Steel Holding Corp.(b) 11,000 509
--------
SYSTEMS SOFTWARE--5.1%
BMC Software, Inc.(b) 9,000 321
McAfee, Inc.(b) 4,200 157
Microsoft Corp. 148,900 5,301
Oracle Corp.(b) 76,700 1,732
Symantec Corp.(b) 39,900 644
--------
8,155
--------
TECHNOLOGY DISTRIBUTORS--0.1%
Arrow Electronics, Inc.(b) 2,500 98
--------
TOBACCO--1.8%
Altria Group, Inc. 15,300 1,156
Loews Corp. - Carolina
Group 14,200 1,211
Reynolds American, Inc. 2,500 165
Universal Corp. 4,800 246
--------
2,778
--------
WIRELESS TELECOMMUNICATION SERVICES--0.3%
Sprint Nextel Corp. 41,300 542
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $119,266) 155,512
- ----------------------------------------------------------------------------
VALUE
SHARES (000)
------- --------
FOREIGN COMMON STOCKS(c)--1.1%
COMPUTER STORAGE & PERIPHERALS--0.3%
Seagate Technology
(Singapore) 15,100 $ 385
--------
INDUSTRIAL MACHINERY--0.1%
Ingersoll-Rand Co., Ltd.
Class A (United States) 3,500 163
--------
IT CONSULTING & OTHER SERVICES--0.5%
Accenture Ltd. Class A
(United States) 23,400 843
--------
PROPERTY & CASUALTY INSURANCE--0.2%
XL Capital Ltd. Class A
(United States) 6,700 337
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $2,003) 1,728
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--98.8%
(IDENTIFIED COST $121,269) 157,240
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--0.8%
PAR
VALUE
(000)
-------
COMMERCIAL PAPER(d)--0.8%
Praxair, Inc.
3.600% due 1/2/08 $ 1,250 1,250
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $1,250) 1,250
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.6%
(IDENTIFIED COST $122,519) 158,490(a)
Other assets and liabilities, net--0.4% 584
--------
NET ASSETS--100.0% $159,074
========
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$41,103 and gross depreciation of $5,729 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $123,116.
(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 interest rate shown is the coupon rate.
See Notes to Financial Statements
48
PHOENIX MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- -------
DOMESTIC COMMON STOCKS--89.4%
ADVERTISING--1.0%
Lamar Advertising Co. Class A 17,300 $ 832
-------
AEROSPACE & DEFENSE--6.2%
Aercap Holdings N.V.(b) 36,000 752
BE Aerospace, Inc.(b) 26,600 1,407
Precision Castparts Corp. 15,200 2,108
Rockwell Collins, Inc. 15,800 1,137
-------
5,404
-------
AIR FREIGHT & LOGISTICS--1.5%
Expeditors International of
Washington, Inc. 13,000 581
Robinson (C.H.) Worldwide,
Inc. 13,500 730
-------
1,311
-------
APPAREL RETAIL--1.2%
Abercrombie & Fitch Co.
Class A 6,800 544
Urban Outfitters, Inc.(b) 17,700 482
-------
1,026
-------
APPAREL, ACCESSORIES & LUXURY GOODS--0.7%
Coach, Inc.(b) 20,000 612
-------
APPLICATION SOFTWARE--3.4%
ANSYS, Inc.(b) 19,100 792
Autodesk, Inc.(b) 18,200 906
Citrix Systems, Inc.(b) 22,000 836
Intuit, Inc.(b) 14,900 471
-------
3,005
-------
ASSET MANAGEMENT & CUSTODY BANKS--1.1%
AllianceBernstein Holding LP 4,900 369
Northern Trust Corp. 7,500 574
-------
943
-------
BIOTECHNOLOGY--2.7%
Applera Corp. - Celera Group(b) 15,000 238
Celgene Corp.(b) 8,800 407
IDEXX Laboratories, Inc.(b) 8,000 469
Myriad Genetics, Inc.(b) 9,900 459
United Therapeutics Corp.(b) 8,200 801
-------
2,374
-------
BROADCASTING & CABLE TV--0.5%
Liberty Global, Inc. Class A(b) 11,100 435
-------
CASINOS & GAMING--4.3%
International Game Technology 7,600 334
Melco PBL Entertainment Ltd(b) 42,000 486
Penn National Gaming, Inc.(b) 14,700 875
Scientific Games Corp.
Class A(b) 29,000 964
VALUE
SHARES (000)
------- -------
CASINOS & GAMING--CONTINUED
WMS Industries, Inc.(b) 29,900 $ 1,096
-------
3,755
-------
COMMUNICATIONS EQUIPMENT--4.1%
Arris Group, Inc.(b) 70,400 703
F5 Networks, Inc.(b) 15,700 448
Foundry Networks, Inc.(b) 40,900 716
Harris Corp. 10,300 646
Juniper Networks, Inc.(b) 19,100 634
Polycom, Inc.(b) 16,000 444
-------
3,591
-------
COMPUTER & ELECTRONICS RETAIL--1.3%
GameStop Corp. Class A(b) 19,000 1,180
-------
CONSTRUCTION & ENGINEERING--1.7%
Fluor Corp. 6,700 976
Shaw Group, Inc. (The)(b) 8,000 484
-------
1,460
-------
DATA PROCESSING & OUTSOURCED SERVICES--2.8%
Iron Mountain, Inc.(b) 26,400 977
MasterCard, Inc. Class A 5,600 1,205
Total System Services, Inc. 8,000 224
-------
2,406
-------
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES--2.2%
Corrections Corporation of
America(b) 30,000 885
Huron Consulting Group, Inc.(b) 2,600 210
IHS, Inc.(b) 13,700 830
-------
1,925
-------
EDUCATION SERVICES--2.1%
DeVry, Inc. 20,200 1,049
Strayer Education, Inc. 4,500 768
-------
1,817
-------
ELECTRICAL COMPONENTS & EQUIPMENT--0.3%
Ametek, Inc. 5,500 258
-------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.6%
Dolby Laboratories, Inc.
Class A(b) 11,400 567
-------
ELECTRONIC MANUFACTURING SERVICES--1.0%
Trimble Navigation Ltd.(b) 28,100 850
-------
ENVIRONMENTAL & FACILITIES SERVICES--1.1%
Stericycle, Inc.(b) 15,800 939
-------
HEALTH CARE EQUIPMENT--6.4%
Bard (C.R.), Inc. 10,700 1,014
Gen-Probe, Inc.(b) 12,200 768
VALUE
SHARES (000)
------- -------
HEALTH CARE EQUIPMENT--CONTINUED
Hologic, Inc.(b) 28,300 $ 1,943
Intuitive Surgical, Inc.(b) 3,500 1,136
Wright Medical Group, Inc.(b) 23,500 685
-------
5,546
-------
HEALTH CARE FACILITIES--1.6%
Psychiatric Solutions, Inc.(b) 12,000 390
VCA Antech, Inc.(b) 22,800 1,008
-------
1,398
-------
HEALTH CARE SERVICES--1.0%
Express Scripts, Inc.(b) 12,300 898
-------
HEALTH CARE SUPPLIES--0.8%
Inverness Medical Innovations,
Inc.(b) 13,000 730
-------
HEALTH CARE TECHNOLOGY--1.2%
Cerner Corp.(b) 18,500 1,043
-------
HOME ENTERTAINMENT SOFTWARE--1.7%
Activision, Inc.(b) 51,500 1,530
-------
HOTELS, RESORTS & CRUISE LINES--0.7%
Gaylord Entertainment Co.(b) 15,000 607
-------
HOUSEHOLD PRODUCTS--0.6%
Energizer Holdings, Inc.(b) 5,000 561
-------
INDUSTRIAL GASES--1.3%
Airgas, Inc. 21,300 1,110
-------
INDUSTRIAL MACHINERY--1.2%
Danaher Corp. 11,900 1,044
-------
INTEGRATED OIL & GAS--0.6%
Murphy Oil Corp. 6,700 568
-------
INTERNET RETAIL--1.1%
GSI Commerce(R), Inc.(b) 18,400 359
IAC/InterActiveCorp.(b) 20,900 562
-------
921
-------
INTERNET SOFTWARE & SERVICES--1.5%
Equinix, Inc. 4,500 455
Omniture, Inc.(b) 7,000 233
VistaPrint Ltd.(b) 15,500 664
-------
1,352
-------
INVESTMENT BANKING & BROKERAGE--1.0%
GFI Group, Inc.(b) 9,300 890
-------
IT CONSULTING & OTHER SERVICES--1.7%
Cognizant Technology Solutions
Corp. Class A(b) 43,300 1,470
-------
See Notes to Financial Statements
49
PHOENIX MID-CAP GROWTH SERIES
VALUE
SHARES (000)
------- -------
LEISURE FACILITIES--0.5%
Vail Resorts, Inc.(b) 7,600 $ 409
-------
LIFE SCIENCES TOOLS & SERVICES--1.3%
Amag Pharmaceuticals, Inc.(b) 6,500 391
Pharmaceutical Product
Development, Inc. 18,400 743
-------
1,134
-------
OIL & GAS EQUIPMENT & SERVICES--3.7%
Dresser-Rand Group, Inc.(b) 12,000 469
ION Geophysical Corp. 23,700 374
National Oilwell Varco, Inc.(b) 17,400 1,278
Smith International, Inc. 14,800 1,093
-------
3,214
-------
OIL & GAS EXPLORATION & PRODUCTION--5.7%
Concho Resources, Inc.(b) 18,000 371
Continental Resources, Inc.(b) 12,800 334
Denbury Resources, Inc.(b) 64,800 1,928
Range Resources Corp. 28,500 1,464
XTO Energy, Inc. 17,500 899
-------
4,996
-------
PACKAGED FOODS & MEATS--0.3%
Ralcorp Holdings, Inc.(b) 4,100 249
-------
PERSONAL PRODUCTS--1.6%
Bare Escentuals, Inc. 22,500 545
Chattem, Inc.(b) 11,700 884
-------
1,429
-------
SEMICONDUCTOR EQUIPMENT--1.9%
MEMC Electronic Materials,
Inc.(b) 12,100 1,071
Varian Semiconductor Equipment
Associates, Inc.(b) 15,800 584
-------
1,655
-------
SEMICONDUCTORS--2.3%
Microchip Technology, Inc. 13,800 434
Microsemi Corp.(b) 19,000 421
NVIDIA Corp.(b) 19,500 663
Sigma Designs, Inc.(b) 8,500 469
-------
1,987
-------
VALUE
SHARES (000)
------- -------
SOFT DRINKS--0.9%
Hansen Natural Corp.(b) 17,700 $ 784
-------
SPECIALIZED FINANCE--3.1%
CME Group, Inc. 2,200 1,509
IntercontinentalExchange,
Inc.(b) 6,000 1,155
-------
2,664
-------
SPECIALTY CHEMICALS--1.2%
Ecolab, Inc. 20,800 1,065
-------
TRADING COMPANIES & DISTRIBUTORS--0.7%
Fastenal Co. 15,300 618
-------
WIRELESS TELECOMMUNICATION SERVICES--4.0%
American Tower Corp. Class A 25,700 1,095
NII Holdings, Inc.(b) 29,900 1,445
SBA Communications Corp.
Class A(b) 27,000 913
-------
3,453
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $69,347) 78,015
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS(c)--5.8%
ADVERTISING--1.2%
Focus Media Holding Ltd. ADR
(China)(b) 18,600 1,057
-------
AEROSPACE & DEFENSE--1.0%
CAE, Inc. (Canada) 67,500 910
-------
DRUG RETAIL--1.2%
Shoppers Drug Mart Corp.
(Canada) 18,900 1,020
-------
HOTELS, RESORTS & CRUISE LINES--0.9%
Orient-Express Hotel Ltd.
Class A (Bermuda) 12,800 736
-------
INVESTMENT BANKING & BROKERAGE--0.9%
Lazard Ltd. Class A
(United States) 20,000 814
-------
VALUE
SHARES (000)
------- -------
PHARMACEUTICALS--0.6%
Shire Pharmaceuticals Group plc
ADR (United Kingdom) 7,800 $ 538
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $4,934) 5,075
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--95.2%
(IDENTIFIED COST $74,281) 83,090
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--5.1%
PAR
VALUE
(000)
-------
REPURCHASE AGREEMENTS--5.1%
State Street Bank and Trust Co.
repurchase agreement 1.10%
dated 12/31/07, due 1/2/08,
repurchase price $4,419
collateralized by U.S. Treasury
Bond 5%, 5/15/37 market
value $4,512 $4,419 4,419
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $4,419) 4,419
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.3%
(IDENTIFIED COST $78,700) 87,509(a)
Other assets and liabilities, net--(0.3)% (256)
-------
NET ASSETS--100.0% $87,253
=======
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$9,805 and gross depreciation of $1,026 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $78,730.
(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.
See Notes to Financial Statements
50
PHOENIX MONEY MARKET SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
FACE
VALUE VALUE
(000) (000)
------- --------
FEDERAL AGENCY SECURITIES(d)--18.5%
FFCB
4.756% due 9/22/08(c) $ 500 $ 501
FHLB
4.350% due 1/7/08 2,965 2,963
5.083% due 1/10/08(c) 2,300 2,300
4.305% due 1/18/08 3,500 3,493
3.790% due 4/29/08 2,500 2,496
3.190% due 7/14/08 1,000 994
3.400% due 7/30/08 830 825
4.700% due 10/9/08 1,000 1,000
4.782% due 11/21/08(c) 3,000 3,000
4.600% due 11/28/08 3,500 3,500
4.500% due 12/11/08 2,650 2,650
FHLMC
4.320% due 1/30/08 2,000 1,993
5.000% due 2/8/08 2,650 2,651
5.750% due 4/15/08 2,400 2,410
3.060% due 7/15/08 500 497
- ----------------------------------------------------------------------------
TOTAL FEDERAL AGENCY SECURITIES
(IDENTIFIED COST $31,273) 31,273
- ----------------------------------------------------------------------------
FEDERAL AGENCY SECURITIES--VARIABLE(c)--0.7%
SBA (Final Maturity 2/25/23)
5.250% due 1/1/08(g) 170 170
SBA (Final Maturity 1/25/21)
5.000% due 1/1/08(g) 15 15
SBA (Final Maturity 10/25/22)
5.250% due 1/1/08(g) 285 284
SBA (Final Maturity 11/25/21)
5.375% due 1/1/08(g) 294 294
SBA (Final Maturity 2/25/23)
5.250% due 1/1/08(g) 146 146
SBA (Final Maturity 3/25/24)
4.875% due 1/1/08(g) 115 115
SBA (Final Maturity 5/25/21)
5.250% due 1/1/08(g) 61 61
SBA (Final Maturity 9/25/23)
5.125% due 1/1/08(g) 191 191
- ----------------------------------------------------------------------------
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE
(IDENTIFIED COST $1,276) 1,276
- ----------------------------------------------------------------------------
FACE
VALUE VALUE
(000) (000)
------- --------
COMMERCIAL PAPER(f)--63.0%
ABN-AMRO N. A. Finance, Inc.
5.000% due 1/15/08 $ 2,700 $ 2,695
5.020% due 1/15/08 3,500 3,493
5.250% due 1/15/08 2,090 2,086
Air Products & Chemicals, Inc.
4.480% due 1/11/08 3,305 3,301
Archer-Daniels-Midland Co.
4.500% due 1/8/08 3,815 3,812
4.460% due 1/10/08 2,470 2,467
4.380% due 1/31/08 2,100 2,092
Bank of America Corp.
4.820% due 1/24/08 2,800 2,791
4.810% due 2/22/08 3,200 3,178
Cargill, Inc.
4.700% due 2/13/08 3,500 3,480
4.720% due 2/26/08 3,250 3,226
5.000% due 2/29/08 1,355 1,344
Cintas Corp.
4.400% due 1/7/08 4,796 4,792
Danaher Corp.
4.350% due 1/23/08 3,440 3,431
4.650% due 1/29/08 2,300 2,292
Danske Corp.
4.670% due 2/1/08 800 797
Eaton Corp.
4.250% due 1/2/08 7,340 7,339
General Electric Capital Corp.
4.740% due 1/23/08 1,900 1,895
4.570% due 2/4/08 1,900 1,892
4.620% due 2/20/08 3,700 3,676
Govco, Inc.
5.250% due 1/9/08 3,800 3,796
5.100% due 1/16/08 1,200 1,197
4.700% due 1/30/08 3,600 3,586
Harley-Davidson Funding Corp.
4.530% due 2/14/08 1,820 1,810
4.480% due 2/21/08 2,675 2,658
International Lease Finance Corp.
4.750% due 1/28/08 2,700 2,690
4.670% due 1/30/08 3,500 3,487
Nicor, Inc.
4.000% due 1/2/08 4,970 4,969
FACE
VALUE VALUE
(000) (000)
------- --------
Praxair, Inc.
4.500% due 1/4/08 $ 2,840 $ 2,839
Private Export Funding Corp.
4.760% due 1/31/08 2,900 2,889
Toyota Motor Credit Corp.
4.620% due 2/21/08 1,600 1,590
4.470% due 3/12/08 3,445 3,415
4.440% due 3/27/08 3,300 3,265
UBS Finance Delaware LLC
4.960% due 1/14/08 1,500 1,497
4.860% due 1/25/08 3,545 3,534
4.770% due 2/25/08 3,400 3,375
- ----------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(IDENTIFIED COST $106,676) 106,676
- ----------------------------------------------------------------------------
MEDIUM TERM NOTES--16.9%
Citigroup Global Markets Holdings, Inc.
6.500% due 2/15/08 3,500 3,505
Danske Bank A/S 144A (Denmark)
4.919% due 1/16/09(b) (c) (e) (g) 3,000 3,000
FleetBoston Financial Corp.
3.850% due 2/15/08 2,500 2,496
HSBC Finance Corp.
5.836% due 2/15/08 4,500 4,503
HSH Nordbank AG NY 144A (Germany)
4.956% due 9/22/08(b) (c) (e) (g) 5,000 5,000
International Lease Finance Corp.
4.480% due 3/25/08 1,130 1,127
National Australia Bank Ltd. 144A (Australia)
5.240% due 1/6/09(b) (c) (e) (g) 3,000 3,000
Nordea Bank AB 144A (Sweden)
5.233% due 1/8/09(b) (c) (e) (g) 3,000 3,000
Wells Fargo & Co.
5.076% due 1/17/09(c) 3,000 3,000
- ----------------------------------------------------------------------------
TOTAL MEDIUM TERM NOTES
(IDENTIFIED COST $28,631) 28,631
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.1%
(IDENTIFIED COST $167,856) 167,856(a)
Other assets and liabilities, net--0.9% 1,581
--------
NET ASSETS--100.0% $169,437
========
(a) Federal Income Tax Information: At December 31, 2007, the aggregate cost of
securities was the same for book and federal income tax purposes.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
2007, these securities amounted to a value of $14,000 (reported in 000's) or
8.3% of net assets.
(c) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(d) The interest rate shown is the coupon rate.
(e) 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.
(f) The rate shown is the discount rate.
(g) The date shown is the reset date.
See Notes to Financial Statements
51
PHOENIX MULTI-SECTOR FIXED INCOME SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
PAR
VALUE VALUE
(000) (000)
------- --------
U.S. GOVERNMENT SECURITIES--5.2%
U.S. TREASURY BONDS--2.4%
U.S. Treasury Bond
5.000% due 5/15/37 $ 5,425 $ 5,913
--------
U.S. TREASURY NOTES--2.8%
U.S. Treasury Note
4.250% due 11/15/17 6,925 7,046
- ----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $12,843) 12,959
- ----------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--8.3%
FNMA
5.000% due 8/1/20 212 213
5.000% due 4/1/34 1,281 1,252
5.000% due 5/1/34 1,303 1,272
6.000% due 5/1/34 399 406
5.500% due 6/1/34 1,469 1,469
5.500% due 1/1/35 520 520
5.000% due 10/1/35 5,138 5,016
5.500% due 10/1/35 785 785
6.000% due 3/1/36 1,843 1,872
6.500% due 8/1/36 1,702 1,749
6.000% due 2/1/37 1,487 1,510
FNMA 04-W6, 1A4
5.500% due 7/25/34 1,680 1,680
FNMA 05-57, CK
5.000% due 7/25/35 889 888
FNMA 05-74, AG
5.000% due 9/25/35 527 526
GNMA
6.500% due 10/15/23 26 27
6.500% due 12/15/25 47 49
6.500% due 1/15/26 6 6
6.500% due 8/15/31 359 372
6.500% due 11/15/31 70 73
6.500% due 3/15/32 204 211
6.500% due 4/15/32 940 974
- ----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $20,698) 20,870
- ----------------------------------------------------------------------------
AGENCY NON-MORTGAGE BACKED
SECURITIES--1.2%
FHLMC 5.20%, 3/5/19 3,140 3,143
- ----------------------------------------------------------------------------
TOTAL AGENCY NON-MORTGAGE BACKED SECURITIES
(IDENTIFIED COST $3,082) 3,143
- ----------------------------------------------------------------------------
MUNICIPAL BONDS--4.0%
CALIFORNIA--0.8%
Alameda Corridor Transportation
Authority Series C Taxable
(MBIA Insured)
6.600% due 10/1/29 1,750 1,920
--------
PAR
VALUE VALUE
(000) (000)
------- --------
ILLINOIS--0.6%
Illinois Educational Facilities
Authority - Loyola University
Series C Taxable
(AMBAC Insured)
7.120% due 7/1/11 $ 1,330 $ 1,438
--------
MASSACHUSETTS--0.4%
Commonwealth of Massachusetts
General Obligation Series C
(FSA Insured)
5.500% due 12/1/17 890 1,020
--------
MINNESOTA--1.1%
State of Minnesota, General
Revenue
5.000% due 8/1/19 2,500 2,747
--------
SOUTH DAKOTA--0.1%
South Dakota State Educational
Enhancement Funding Corp.
Taxable Series A
6.720% due 6/1/25 285 282
--------
TEXAS--1.0%
City of Dallas
5.000% due 2/15/17 2,350 2,569
- ----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $9,682) 9,976
- ----------------------------------------------------------------------------
ASSET-BACKED SECURITIES--1.8%
Bear Stearns Structured
Products, Inc. 05-20N, B 144A
8.365% due 10/25/45(b) (c) 1,250 1,006
Bombardier Capital Mortgage
Securitization Corp. 99-A, A3
5.980% due 1/15/18(c) 930 907
Conseco Finance Securitizations
Corp. 01-3, A4
6.910% due 5/1/33(c) 1,465 1,473
Dunkin Securitization 06-1, M1
144A
8.285% due 6/20/31(b) 1,100 1,112
MASTR Alternative Net Interest
Margin 06-6, N1 144A
6.129% due 9/26/46(b) (c) (u) (y) 150 11
- ----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $4,880) 4,509
- ----------------------------------------------------------------------------
DOMESTIC CORPORATE BONDS--26.8%
AEROSPACE & DEFENSE--0.8%
DRS Technologies, Inc.
6.625% due 2/1/16 500 496
L-3 Communications Corp.(f)
7.625% due 6/15/12 625 643
6.125% due 1/15/14 550 542
PAR
VALUE VALUE
(000) (000)
------- --------
AEROSPACE & DEFENSE--CONTINUED
L-3 Communications Corp.
Series B
6.375% due 10/15/15(f) $ 250 $ 247
Precision Castparts Corp.
5.600% due 12/15/13(f) 150 159
--------
2,087
--------
AIRLINES--1.8%
American Airlines, Inc. 01-1
6.977% due 11/23/22 1,168 1,080
Continental Airlines, Inc. 98-1A
6.648% due 9/15/17 832 836
Delta Air Lines, Inc. 00-1
7.379% due 5/18/10 605 608
JetBlue Airways Corp. 04-2
7.969% due 11/15/08(c) 376 374
United Airlines, Inc. 00-2
7.032% due 10/1/10 1,311 1,311
United Airlines, Inc. 01-1
6.071% due 3/1/13 386 384
--------
4,593
--------
APPLICATION SOFTWARE--0.2%
Intuit, Inc.
5.750% due 3/15/17 415 408
--------
ASSET MANAGEMENT & CUSTODY BANKS--0.3%
Bank of New York Co., Inc. (The)
3.625% due 1/15/09 180 177
Janus Capital Group, Inc.
6.250% due 6/15/12 500 512
--------
689
--------
AUTOMOBILE MANUFACTURERS--0.2%
Ford Motor Co.
7.450% due 7/16/31 625 467
--------
AUTOMOTIVE RETAIL--0.3%
Hertz Corp. (The)
10.500% due 1/1/16 150 156
Hertz Corp.(The)
8.875% due 1/1/14(f) 600 611
--------
767
--------
BROADCASTING & CABLE TV--1.0%
Charter Communications
Holdings I LLC
11.750% due 5/15/14(c) (f) 275 175
Comcast Cable Holdings LLC
7.875% due 8/1/13(f) 500 548
COX Communications, Inc.
5.450% due 12/15/14 625 613
DIRECTV Holdings LLC/DIRECTV
Financing Co., Inc.
6.375% due 6/15/15(f) 1,000 965
Intelsat Corp.
9.000% due 6/15/16 300 304
--------
2,605
--------
See Notes to Financial Statements
52
PHOENIX MULTI-SECTOR FIXED INCOME SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
BUILDING PRODUCTS--0.9%
Building Materials Corp. of America
7.750% due 8/1/14(f) $ 610 $ 470
Esco Corp. 144A
8.625% due 12/15/13(b) 600 603
Masco Corp.
5.850% due 3/15/17 825 800
Owens Corning, Inc.
6.500% due 12/1/16 495 453
--------
2,326
--------
CASINOS & GAMING--0.4%
MGM MIRAGE
8.500% due 9/15/10(f) 630 657
Pokagon Gaming Authority 144A
10.375% due 6/15/14(b) 125 135
Seminole Hard Rock Entertainment,
Inc./Seminole Hard Rock
International LLC 144A
8.194% due 3/15/14(b) (c) 125 120
--------
912
--------
CATALOG RETAIL--0.4%
IAC/InterActiveCorp
7.000% due 1/15/13 875 945
--------
CONSUMER FINANCE--2.6%
Capital One Bank
5.750% due 9/15/10 125 125
Ford Motor Credit Co. LLC
7.875% due 6/15/10 615 568
8.625% due 11/1/10(f) 650 604
9.875% due 8/10/11(f) 575 544
9.693% due 4/15/12(c) 95 93
7.800% due 6/1/12(f) 435 382
GMAC LLC(f)
7.250% due 3/2/11 1,250 1,096
6.875% due 9/15/11 993 850
6.000% due 12/15/11 1,000 839
HSBC Finance Corp.
4.125% due 11/16/09(f) 275 272
Residential Capital LLC(f)
7.625% due 11/21/08 500 400
8.375% due 6/30/15 495 302
SLM Corp.
3.950% due 8/15/08 250 244
5.450% due 4/25/11(f) 250 230
4.810% due 1/31/14(c) 50 37
--------
6,586
--------
DATA PROCESSING & OUTSOURCED SERVICES--1.5%
Broadridge Financial Solutions,
Inc.
6.125% due 6/1/17 1,000 988
Convergys Corp.
4.875% due 12/15/09 1,000 1,013
First Data Corp. 144A
9.875% due 9/24/15(b) 605 563
Fiserv, Inc.
3.000% due 6/27/08(f) 150 149
Western Union Co. (The)
5.930% due 10/1/16 940 938
--------
3,651
--------
PAR
VALUE VALUE
(000) (000)
------- --------
DISTILLERS & VINTNERS--0.3%
Constellation Brands, Inc.
8.375% due 12/15/14 $ 280 $ 282
7.250% due 9/1/16(f) 220 207
Constellation Brands, Inc. 144A
7.250% due 5/15/17(b) 180 168
--------
657
--------
DIVERSIFIED CHEMICALS--0.3%
Cabot Corp. 144A
5.250% due 9/1/13(b) 750 769
Nalco Co.
7.750% due 11/15/11(f) 50 51
--------
820
--------
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES--0.6%
Cintas Corp.
6.000% due 6/1/12 50 53
Equifax, Inc.
6.300% due 7/1/17(f) 1,250 1,269
Mobile Mini, Inc. 144A
6.875% due 5/1/15(b) 250 230
--------
1,552
--------
DIVERSIFIED METALS & MINING--0.7%
Freeport-McMoRan Copper &
Gold, Inc. (Indonesia)
6.875% due 2/1/14(d) (f) 540 545
Glencore Funding LLC 144A
6.000% due 4/15/14(b) 1,150 1,157
--------
1,702
--------
ELECTRIC UTILITIES--1.1%
Consumers Energy Co. Series J
6.000% due 2/15/14(f) 1,250 1,283
Entergy Gulf States, Inc.
3.600% due 6/1/08(f) 1,000 992
Public Service Co. of Colorado
Series A
6.875% due 7/15/09 25 26
Southern California Edison Co.
7.625% due 1/15/10 100 106
Southern California Edison Co. 04-A
5.000% due 1/15/14(f) 50 50
Southern California Edison Co. 04-B
6.000% due 1/15/34(f) 100 101
Southern California Edison Co. 04-G
5.750% due 4/1/35 125 122
--------
2,680
--------
ELECTRICAL COMPONENTS & EQUIPMENT--0.2%
General Cable Corp.
7.125% due 4/1/17(f) 500 493
--------
ELECTRONIC MANUFACTURING SERVICES--0.4%
Jabil Circuit, Inc.
5.875% due 7/15/10 1,000 1,012
--------
PAR
VALUE VALUE
(000) (000)
------- --------
ENVIRONMENTAL & FACILITIES SERVICES--0.4%
Allied Waste North America, Inc.
6.125% due 2/15/14(f) $ 500 $ 483
Waste Management, Inc.
7.375% due 8/1/10 430 454
--------
937
--------
GAS UTILITIES--0.3%
AmeriGas Partners LP
7.250% due 5/20/15 500 492
Panhandle Eastern Pipe
Line Co. LP
4.800% due 8/15/08 100 100
Southwest Gas Corp.
7.625% due 5/15/12 140 154
--------
746
--------
HEALTH CARE SERVICES--0.2%
Fresenius Medical Care Capital
Trust IV
7.875% due 6/15/11 25 26
Quest Diagnostics, Inc.
7.500% due 7/12/11 35 38
6.400% due 7/1/17(f) 510 527
--------
591
--------
HEALTH CARE SUPPLIES--0.0%
Bausch & Lomb, Inc. 144A
9.875% due 11/1/15(b) 125 127
--------
HOMEBUILDING--0.0%
K. Hovnanian Enterprises, Inc.
6.500% due 1/15/14(f) 75 53
--------
HOTELS, RESORTS & CRUISE LINES--0.5%
Royal Caribbean Cruises Ltd.
6.875% due 12/1/13(f) 1,250 1,214
--------
INDEPENDENT POWER PRODUCERS & ENERGY
TRADERS--0.2%
AES Corp. (The) 144A
7.750% due 10/15/15(b) (f) 150 153
Texas Competitive Electric
Holdings Co. LLC 144A
10.250% due 11/1/15(b) 360 358
--------
511
--------
INDUSTRIAL MACHINERY--0.1%
Kennametal, Inc.
7.200% due 6/15/12 225 245
--------
INTEGRATED OIL & GAS--0.0%
Occidental Petroleum Corp.
4.250% due 3/15/10 80 80
--------
INTEGRATED TELECOMMUNICATION SERVICES--0.9%
Qwest Corp.
6.500% due 6/1/17 307 294
Verizon Global Funding Corp.
6.875% due 6/15/12(f) 1,000 1,082
Windstream Corp.(f)
8.625% due 8/1/16 500 528
7.000% due 3/15/19 250 239
--------
2,143
--------
See Notes to Financial Statements
53
PHOENIX MULTI-SECTOR FIXED INCOME SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
INVESTMENT BANKING & BROKERAGE--0.6%
BlackRock, Inc.
6.250% due 9/15/17 $ 375 $ 386
Jefferies Group, Inc.
5.500% due 3/15/16 225 214
Merrill Lynch & Co., Inc.
6.110% due 1/29/37(f) 500 442
Morgan Stanley 144A (Brazil)
10.090% due 5/3/17(b) (d) (f) 1,000(j) 511
--------
1,553
--------
LEISURE PRODUCTS--0.2%
Hasbro, Inc.
6.300% due 9/15/17 475 486
--------
LIFE & HEALTH INSURANCE--0.2%
Americo Life, Inc. 144A
7.875% due 5/1/13(b) 200 204
New York Life Insurance Co. 144A
5.875% due 5/15/33(b) 100 99
StanCorp Financial Group, Inc.
6.875% due 10/1/12 225 245
--------
548
--------
LIFE SCIENCES TOOLS & SERVICES--0.3%
Fisher Scientific International, Inc.
6.750% due 8/15/14(f) 725 743
--------
MANAGED HEALTH CARE--0.1%
UnitedHealth Group, Inc.
3.300% due 1/30/08 220 220
4.875% due 4/1/13 125 123
--------
343
--------
METAL & GLASS CONTAINERS--0.2%
Owens-Brockway Glass Container, Inc.
8.875% due 2/15/09 123 124
Plastipak Holdings, Inc. 144A
8.500% due 12/15/15(b) 500 502
--------
626
--------
MORTGAGE REITS--0.0%
iStar Financial, Inc. Series B
5.125% due 4/1/11 75 67
--------
MOTORCYCLE MANUFACTURERS--0.0%
Harley-Davidson, Inc. 144A
3.625% due 12/15/08(b) 100 99
--------
MOVIES & ENTERTAINMENT--0.4%
Time Warner, Inc.
6.875% due 5/1/12 275 289
Viacom, Inc.
6.250% due 4/30/16(f) 625 629
--------
918
--------
MULTI-LINE INSURANCE--0.2%
Assurant, Inc.
6.750% due 2/15/34 75 73
Farmers Insurance Exchange 144A
8.625% due 5/1/24(b) 75 84
Liberty Mutual Group, Inc. 144A(b)
5.750% due 3/15/14 200 204
7.000% due 3/15/34 150 146
PAR
VALUE VALUE
(000) (000)
------- --------
MULTI-LINE INSURANCE--CONTINUED
Liberty Mutual Insurance Co. 144A
8.500% due 5/15/25(b) $ 25 $ 27
--------
534
--------
MULTI-UTILITIES--0.2%
CMS Energy Corp.
7.750% due 8/1/10(f) 100 105
Dominion Resources, Inc.
Series D 5.125%
due 12/15/09 100 101
MidAmerican Energy
Holdings Co.
3.500% due 5/15/08 200 199
Xcel Energy, Inc.
3.400% due 7/1/08(f) 140 139
--------
544
--------
OFFICE ELECTRONICS--0.2%
Xerox Corp.
6.750% due 2/1/17(f) 600 625
--------
OFFICE REITS--0.3%
Mack-Cali Realty LP
5.125% due 2/15/14 700 694
--------
OIL & GAS EQUIPMENT & SERVICES--0.2%
Helix Energy Solutions 144A
9.500% due 1/15/16(b) (f) 400 409
--------
OIL & GAS EXPLORATION & PRODUCTION--1.0%
Anadarko Petroleum Corp.
3.250% due 5/1/08 345 343
Forest Oil Corp. 144A
7.250% due 6/15/19(b) 1,000 1,010
Plains Exploration & Production Co.
7.750% due 6/15/15(f) 610 613
Swift Energy Co.
7.625% due 7/15/11 500 505
--------
2,471
--------
OIL & GAS REFINING & MARKETING--0.6%
Kern River Funding Corp. 144A
4.893% due 4/30/18(b) 79 77
Tesoro Corp.
6.500% due 6/1/17 780 776
Valero Energy Corp.
4.750% due 6/15/13 550 534
--------
1,387
--------
OIL & GAS STORAGE & TRANSPORTATION--0.6%
Kaneb Pipe Line Operating
Partnership LP
5.875% due 6/1/13 125 127
Kinder Morgan Management Co.
ULC
5.700% due 1/5/16(f) 700 637
Williams Cos., Inc. (The)
7.125% due 9/1/11 500 531
--------
1,295
--------
PAR
VALUE VALUE
(000) (000)
------- --------
OTHER DIVERSIFIED FINANCIAL SERVICES--0.1%
Citigroup, Inc.
4.875% due 5/7/15(f) $ 175 $ 165
OneAmerica Financial Partners,
Inc. 144A
7.000% due 10/15/33(b) 175 184
--------
349
--------
PACKAGED FOODS & MEATS--0.2%
Dean Holding Co.
6.900% due 10/15/17 50 44
Kellogg Co. Series B
6.600% due 4/1/11 75 79
Tyson Foods, Inc.
6.850% due 4/1/16 400 410
--------
533
--------
PAPER PACKAGING--0.2%
Jefferson Smurfit Corp.
8.250% due 10/1/12(f) 215 213
Sealed Air Corp. 144A
5.375% due 4/15/08(b) 250 250
--------
463
--------
PAPER PRODUCTS--0.3%
Verso Paper Holdings LLC &
Verso Paper, Inc. Series B
11.375% due 8/1/16(f) 625 638
--------
PROPERTY & CASUALTY INSURANCE--0.4%
Berkley (W.R.) Corp.
5.875% due 2/15/13 75 76
Berkshire Hathaway Finance Corp.
4.625% due 10/15/13(f) 100 100
Fund American Cos., Inc.
5.875% due 5/15/13 175 176
Kingsway America, Inc.
7.500% due 2/1/14 125 132
Markel Corp.
6.800% due 2/15/13(f) 175 184
NYMAGIC, Inc.
6.500% due 3/15/14 150 154
Progressive Corp. (The)
6.250% due 12/1/32(f) 75 77
--------
899
--------
PUBLISHING--0.6%
Dex Media, Inc.
8.000% due 11/15/13 50 47
Donnelley (RH) Corp. 144A
8.875% due 10/15/17(b) 475 442
Idearc, Inc.
8.000% due 11/15/16(f) 500 462
News America, Inc.
6.625% due 1/9/08 250 250
Reader's Digest Association, Inc.
(The) 144A
9.000% due 2/15/17(b) 500 421
--------
1,622
--------
See Notes to Financial Statements
54
PHOENIX MULTI-SECTOR FIXED INCOME SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
REGIONAL BANKS--0.1%
Citizens Republic Bancorp, Inc.
5.750% due 2/1/13 $ 25 $ 26
Hudson United Bank
7.000% due 5/15/12 80 85
Zions Bancorp.
6.000% due 9/15/15 125 121
--------
232
--------
RESTAURANTS--0.0%
Outback Steakhouse, Inc. 144A
10.000% due 6/15/15(b) (f) 50 37
--------
SOFT DRINKS--0.1%
Coca-Cola Enterprises, Inc.
7.125% due 8/1/17(f) 133 152
--------
SPECIALIZED FINANCE--0.3%
Yankee Acquisition Corp. Series B
9.750% due 2/15/17(f) 815 750
--------
SPECIALIZED REITS--1.1%
Health Care REIT, Inc.
5.875% due 5/15/15 1,775 1,697
Host Hotels & Resorts LP
6.875% due 11/1/14(f) 650 650
Realty Income Corp.
6.750% due 8/15/19 425 439
--------
2,786
--------
SPECIALTY STORES--0.4%
Office Depot, Inc.
6.250% due 8/15/13 1,000 1,044
--------
STEEL--0.1%
Steel Dynamics, Inc. 144A
7.375% due 11/1/12(b) (f) 337 340
--------
TOBACCO--0.6%
Reynolds American, Inc.(f)
7.300% due 7/15/15 750 779
7.625% due 6/1/16 600 641
--------
1,420
--------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
Nextel Communications, Inc.
Series D
7.375% due 8/1/15(f) 1,000 985
- ----------------------------------------------------------------------------
TOTAL DOMESTIC CORPORATE BONDS
(IDENTIFIED COST $68,315) 67,191
- ----------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--9.5%
Adjustable Rate Mortgage
Trust 05-3, 2A1
4.695% due 7/25/35(c) 1,568 1,551
American Home Mortgage
Assets 07-2, M4
5.395% due 3/25/47(c) (u) 1,088 754
American Tower Trust L 07-1A,
C 144A
5.615% due 4/15/37(b) 500 469
PAR
VALUE VALUE
(000) (000)
------- --------
Bear Stearns Commercial Mortgage
Securities 07-PW18, AM
6.084% due 6/11/50(c) $ 1,475 $ 1,483
Bear Stearns Structured Products,
Inc. 04-15, A2 144A
0% due 11/27/34(b) 196 186
Bear Stearns Structured Products,
Inc. 05-10 144A
7.365% due 4/26/35(b) (c) 390 366
Chase Mortgage Finance Corp.
06-A1, 4A1
6.044% due 9/25/36(c) 2,097 2,118
Citicorp Mortgage Securities, Inc.
06-7, 1A1
6.000% due 12/25/36 1,508 1,515
Countrywide Home Loan
Mortgage Pass-Through Trust
04-13, 1A1
5.500% due 8/25/34 1,075 1,079
Countrywide Home Loan
Mortgage Pass-Through Trust
07-1, A2
6.000% due 3/25/37 1,878 1,891
DLJ Commercial Mortgage
Corp. 98-CF2, A1B
6.240% due 11/12/31 327 329
First Horizon Asset Securities,
Inc. 05-AR1, 2A1
5.012% due 4/25/35(c) 1,057 1,064
Franchise Mortgage Acceptance Co.
Loan Receivables Trust 98-CA,
A2 144A
6.660% due 1/15/12(b) 330 317
GS Mortgage Securities Corp. II
99-C1, A2
6.110% due 11/18/30(c) 304 304
Harborview Net Interest Margin
Corp. 06-12, N1 144A
6.409% due 12/19/36(b) 208 206
IndyMac Index Mortgage Loan
Trust 06-AR25, 3A1
6.368% due 9/25/36(c) 1,509 1,512
Lehman Brothers-UBS
Commercial Mortgage Trust
07-C2, H 144A
5.980% due 2/15/40(b) (c) 1,400 952
Lehman XS Net Interest Margin
06-GPM5, A1 144A
6.250% due 10/28/46(b) 170 168
Lehman XS Net Interest Margin
06-GPM7, A1 144A
6.250% due 12/28/46(b) 193 190
MASTR Resecuritization Trust
04-3 144A
5.000% due 3/28/34(b) 506 451
MASTR Resecuritization Trust
05-1 144A
5.000% due 10/28/34(b) 493 466
Residential Accredit Loans, Inc.
02-QS12, B1
6.250% due 9/25/32 607 505
Residential Accredit Loans, Inc.
05-QA4, A5
5.450% due 4/25/35(c) 1,375 1,350
PAR
VALUE VALUE
(000) (000)
------- --------
Structured Asset Securities Corp.
03-32, 1A1
5.210% due 11/25/33(c) $ 887 $ 869
Structured Asset Securities Corp.
05-1, 6A1
6.000% due 2/25/35 1,490 1,476
Timberstar Trust 06-1A, A 144A
5.668% due 10/15/36(b) 1,275 1,238
Wells Fargo Mortgage Backed
Securities Trust 05-5, 1A1
5.000% due 5/25/20 918 905
- ----------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $24,723) 23,714
- ----------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--18.6%
ARGENTINA--0.8%
Republic of Argentina PIK Interest
Capitalization
8.28% due 12/31/33(f) 1,654 1,592
Republic of Argentina
Series GDP
0% due 12/15/35(c) 3,676 425
--------
2,017
--------
AUSTRALIA--1.9%
Commonwealth of Australia
Series 909
7.500% due 9/15/09 5,486(i) 4,867
--------
BRAZIL--2.5%
Federative Republic of Brazil
12.500% due 1/5/16 3,499(j) 2,140
12.500% due 1/5/22 1,875(j) 1,179
10.250% due 1/10/28 3,350(j) 1,810
7.125% due 1/20/37 415 470
11.000% due 8/17/40 550 735
--------
6,334
--------
CANADA--0.9%
Commonwealth of Canada
4.250% due 9/1/09 2,220(k) 2,265
--------
GERMANY--0.3%
Federal Republic of Germany 144A
3.250% due 4/17/09(b) 495(l) 716
--------
HUNGARY--0.4%
Republic of Hungary
6.250% due 4/24/09 200,000(m) 1,136
--------
INDONESIA--0.3%
Republic of Indonesia 144A
7.250% due 4/20/15(b) (f) 600 636
--------
MEXICO--0.2%
United Mexican States Series B
6.750% due 9/27/34 500 552
--------
See Notes to Financial Statements
55
PHOENIX MULTI-SECTOR FIXED INCOME SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
NEW ZEALAND--1.1%
Commonwealth of New Zealand
Series 708
6.000% due 7/15/08 3,475(n) $ 2,653
--------
NORWAY--1.3%
Kingdom of Norway
5.500% due 5/15/09 17,485(o) 3,254
--------
PHILIPPINES--0.6%
Republic of Philippines
7.750% due 1/14/31 $ 1,405 1,628
--------
RUSSIA--1.7%
Russian Federation 144A
7.500% due 3/31/30(b) (c) 2,054 2,337
Russian Federation RegS
7.500% due 3/31/30(c) (e) 1,584 1,811
--------
4,148
--------
SINGAPORE--0.3%
Singapore Government
2.500% due 10/1/12 925(q) 649
--------
SOUTH AFRICA--0.5%
Republic of South Africa Series
R153
13.000% due 8/31/10 7,700(r) 1,220
--------
SWEDEN--0.3%
Kingdom of Sweden Series 1043
5.000% due 1/28/09 5,270(s) 822
--------
TRINIDAD AND TOBAGO--0.1%
Republic of Trinidad and Tobago RegS
9.875% due 10/1/09(e) 225 246
--------
TURKEY--1.9%
Republic of Turkey
10.500% due 1/13/08 500 501
0% due 5/6/09(c) 3,575(t) 2,481
9.000% due 6/30/11 500 559
11.500% due 1/23/12 750 911
7.250% due 3/15/15 350 376
--------
4,828
--------
UKRAINE--0.3%
Republic of Ukraine 144A
6.580% due 11/21/16(b) (f) 750 737
--------
VENEZUELA--3.2%
Republic of Venezuela
7.650% due 4/21/25 750 643
9.250% due 9/15/27 4,975 4,975
9.375% due 1/13/34 1,000 997
Republic of Venezuela RegS
5.375% due 8/7/10(e) 1,500 1,414
--------
8,029
- ----------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $44,664) 46,737
- ----------------------------------------------------------------------------
PAR
VALUE VALUE
(000) (000)
------- --------
FOREIGN CORPORATE BONDS(d)--10.1%
BRAZIL--0.5%
GTL Trade Finance, Inc. 144A
7.250% due 10/20/17(b) (f) $ 545 $ 553
Vale Overseas Ltd.
6.250% due 1/11/16(f) 500 501
6.250% due 1/23/17(g) 200 201
--------
1,255
--------
CANADA--0.8%
Catalyst Paper Corp.
7.375% due 3/1/14(f) 355 270
EnCana Corp.
5.900% due 12/1/17 420 430
European Investment Bank 144A
4.600% due 1/30/37(b) 625(k) 620
Rogers Wireless
Communications, Inc.
6.375% due 3/1/14 575 592
--------
1,912
--------
CHILE--0.2%
Empresa Nacional de
Electricidad SA
8.350% due 8/1/13 500 566
--------
CYPRUS--0.1%
ABH Financial Ltd. (Alfa Markets
Ltd.) 144A
8.200% due 6/25/12(b) 250 235
--------
EGYPT--0.1%
Orascom Telecom Finance SCA
144A
7.875% due 2/8/14(b) 300 285
--------
HONG KONG--0.2%
China Properties Group Ltd. 144A
9.125% due 5/4/14(b) (f) 500 411
Hutchison Whampoa International
Ltd. 144A
5.450% due 11/24/10(b) 150 152
--------
563
--------
INDIA--0.2%
ICICI Bank Ltd. 144A
6.375% due 4/30/22(b) (c) 625 566
--------
JAPAN--0.5%
Resona Bank Ltd. 144A
5.850% due 9/29/49(b) (c) 1,250 1,162
--------
KAZAKHSTAN--0.7%
Kazkommerts International BV
RegS
8.000% due 11/3/15(e) 1,000 825
PAR
VALUE VALUE
(000) (000)
------- --------
KAZAKHSTAN--CONTINUED
Tengizchevroil Finance Co.
SARL 144A
6.124% due 11/15/14(b) (f) $ 1,000 $ 942
--------
1,767
--------
LUXEMBOURG--0.3%
TNK-BP Finance SA 144A
7.500% due 3/13/13(b) 425 426
Tyco Electronic Group SA 144A
6.000% due 10/1/12(b) 210 215
--------
641
--------
MALAYSIA--0.5%
Malaysia International Shipping
Corp. Capital Ltd. 144A
6.125% due 7/1/14(b) 1,250 1,291
--------
MEXICO--0.2%
Pemex Project Funding Master Trust
6.125% due 8/15/08 7 7
Vitro S.A.B. de C.V.
8.625% due 2/1/12(f) 570 539
--------
546
--------
NETHERLANDS--0.3%
Majapahit Holding BV 144A
7.250% due 6/28/17(b) 825 794
--------
RUSSIA--2.5%
European Bank for Reconstruction
& Development
6.000% due 2/14/12 46,600(p) 1,838
Gazprom International SA 144A
7.201% due 2/1/20(b) 906 919
Gazprom OAO (Gaz Capital SA)
144A(b)
6.212% due 11/22/16(f) 1,530 1,468
6.510% due 3/7/22 520 494
OJSC AK Transneft
(TransCapitalInvest Ltd.) 144A
5.670% due 3/5/14(b) 610 585
OJSC Vimpel Communications
(UBS Luxembourg SA) 144A
8.375% due 10/22/11(b) 250 256
Russian Agricultural Bank OJSC
(RSHB Capital SA) 144A
6.299% due 5/15/17(b) 615 583
--------
6,143
--------
SINGAPORE--0.3%
UOB Cayman Ltd. 144A
5.796% due 12/29/49(b) (c) 700 695
--------
SOUTH AFRICA--0.0%
SABMiller plc 144A
6.625% due 8/15/33(b) 75 77
--------
See Notes to Financial Statements
56
PHOENIX MULTI-SECTOR FIXED INCOME SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
SOUTH KOREA--0.7%
Hynix Semiconductor, Inc. 144A
7.875% due 6/27/17(b) (f) $ 700 $ 635
Woori Bank 144A
6.125% due 5/3/16(b) (c) (f) 1,000 1,005
--------
1,640
--------
SWITZERLAND--0.2%
Petroplus Finance Ltd. 144A
6.750% due 5/1/14(b) 500 468
--------
UNITED ARAB EMIRATES--0.3%
Abu Dhabi National Energy Co.
144A
5.875% due 10/27/16(b) 825 808
--------
UNITED KINGDOM--0.6%
British Sky Broadcasting
Group plc
6.875% due 2/23/09 650 663
Hanson Australia Funding Ltd.
5.250% due 3/15/13(f) 125 125
Ineos Group Holdings plc 144A
8.500% due 2/15/16(b) (f) 500 447
Vodafone Group plc
6.150% due 2/27/37(f) 375 370
--------
1,605
--------
UNITED STATES--0.5%
Nova Chemicals Corp.
7.863% due 11/15/13(c) (f) 1,218 1,145
--------
VENEZUELA--0.4%
Petroleos de Venezuela S.A.
5.250% due 4/12/17 1,500 1,069
- ----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $26,188) 25,233
- ----------------------------------------------------------------------------
FOREIGN CREDIT LINKED NOTES--0.2%
INDONESIA--0.2%
Republic of Indonesia
(Citigroup, Inc.)
11.867% due 6/15/09 640 565
- ----------------------------------------------------------------------------
TOTAL FOREIGN CREDIT LINKED NOTES
(IDENTIFIED COST $590) 565
- ----------------------------------------------------------------------------
DOMESTIC CONVERTIBLE BONDS--0.1%
PHARMACEUTICALS--0.1%
Par Pharmaceutical Cos., Inc.
2.875% due 9/30/10 300 278
- ----------------------------------------------------------------------------
TOTAL DOMESTIC CONVERTIBLE BONDS
(IDENTIFIED COST $264) 278
- ----------------------------------------------------------------------------
DOMESTIC LOAN AGREEMENTS--9.3%
ADVERTISING--0.1%
Lamar Media Corp. Tranche F
6.375% due 3/31/14(c) 190 189
--------
ALTERNATIVE CARRIERS--0.5%
Level 3 Communications, Inc.
Tranche B
7.605% due 3/13/14(c) 115 110
PAR
VALUE VALUE
(000) (000)
------- --------
ALTERNATIVE CARRIERS--CONTINUED
Time Warner Telecom Holdings
Tranche B
8.471% due 1/7/13(c) $ 1,248 $ 1,206
--------
1,316
--------
APPAREL RETAIL--0.4%
Hanesbrands, Inc. Tranche B
7.600% due 9/5/13(c) 207 199
HBI Branded Apparel Ltd., Inc.
Tranche 2
9.110% due 3/5/14(c) 325 325
Totes Isotoner Corp. Tranche 2
11.360% due 1/16/14(c) 500 470
--------
994
--------
APPLICATION SOFTWARE--0.2%
Reynolds & Reynolds Co. (The)
Tranche FL
7.198% due 10/24/12(c) 499 480
--------
ASSET MANAGEMENT & CUSTODY BANKS--0.0%
Nuveen Investments, Inc. Tranche
Term B
7.841% due 11/13/14(c) 108 106
--------
AUTO PARTS & EQUIPMENT--0.5%
Mark IV Industries, Inc. Tranche 2
11.095% due 12/19/11(c) 325 293
Mark IV Industries, Inc. Tranche B
7.847% due 6/21/11(c) 950 887
--------
1,180
--------
AUTOMOBILE MANUFACTURERS--0.4%
Ford Motor Co. Tranche B
8.000% due 12/15/13(c) 612 568
General Motors Corp. Tranche B
7.615% due 11/29/13(c) 596 560
--------
1,128
--------
AUTOMOTIVE RETAIL--0.2%
Hertz Corp. Letter of Credit
7.110% due 12/21/12(c) 83 82
Hertz Corp. Tranche B
7.090% due 12/21/12(c) 395 386
--------
468
--------
BROADCASTING & CABLE TV--0.4%
Charter Communications
Operating LLC Tranche
7.360% due 3/6/14(c) 992 929
--------
CASINOS & GAMING--0.0%
Wimar Operating Co. LLC Tranche B
7.860% due 1/3/12(c) 110 108
--------
DATA PROCESSING & OUTSOURCED SERVICES--0.3%
First Data Corp. Tranche B3
7.640% due 9/24/14(c) 833 793
--------
PAR
VALUE VALUE
(000) (000)
------- --------
DEPARTMENT STORES--0.6%
Neiman-Marcus Group, Inc.
(The) Tranche
7.090% due 4/6/13(c) $ 1,473 $ 1,418
--------
DIVERSIFIED CHEMICALS--0.5%
Celanese Holdings LLC Tranche
Term B
8.181% due 3/30/14(c) 1,250 1,197
--------
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES--0.1%
ARAMARK Corp. Letter of
Credit
7.490% due 1/26/14(c) 19 18
ARAMARK Corp. Tranche B
7.490% due 1/26/14(c) 261 248
--------
266
--------
ELECTRIC UTILITIES--0.2%
Energy Future Holdings Tranche B2
8.645% due 10/10/14(c) 439 431
--------
ELECTRICAL COMPONENTS & EQUIPMENT--0.2%
Baldor Electric Co. Tranche
7.063% due 1/31/14(c) 524 516
--------
ENVIRONMENTAL & FACILITIES SERVICES--0.2%
Allied Waste North America, Inc.
Letter of Credit A
5.320% due 3/28/14(c) 206 197
Allied Waste North America, Inc.
Tranche B
7.100% due 3/28/14(c) 342 327
--------
524
--------
HEALTH CARE FACILITIES--0.4%
HCA, Inc. Tranche B
8.086% due 11/16/13(c) 426 412
Health Management Associates, Inc.
Tranche B
6.760% due 2/28/14(c) 258 241
LifePoint Hospitals, Inc.
Tranche B
6.975% due 4/15/12(c) 390 374
--------
1,027
--------
HOUSEWARES & SPECIALTIES--0.1%
Yankee Candle Co., Inc. Tranche B
8.891% due 2/6/14(c) 250 235
--------
INDEPENDENT POWER PRODUCERS & ENERGY
TRADERS--0.2%
NRG Energy, Inc. Letter of Credit
7.070% due 2/1/13(c) 325 325
NRG Energy, Inc. Tranche B1
7.070% due 2/1/13(c) 121 115
--------
440
--------
INTEGRATED TELECOMMUNICATION SERVICES--0.3%
NTELOS, Inc. Tranche B1
7.570% due 8/24/11(c) 748 742
--------
See Notes to Financial Statements
57
PHOENIX MULTI-SECTOR FIXED INCOME SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
LEISURE FACILITIES--0.3%
AMF Bowling Worldwide, Inc.
Tranche B
7.978% due 5/17/13(c) $ 871 $ 823
--------
OIL & GAS DRILLING--0.1%
Hercules Offshore, Inc. Tranche
6.990% due 7/11/13(c) 373 363
--------
OIL & GAS EQUIPMENT & SERVICES--0.1%
Helix Energy Solutions Group, Inc.
Tranche
7.453% due 7/1/13(c) 196 189
--------
PAPER PRODUCTS--0.7%
Georgia-Pacific Corp. Tranche A
6.872% due 12/20/10(c) 638 619
Georgia-Pacific Corp. Tranche B1
6.893% due 12/20/12(c) 1,078 1,030
NewPage Corp. Tranche B
8.688% due 12/20/14(c) 155 151
--------
1,800
--------
PUBLISHING--0.5%
Idearc, Inc. Tranche B
7.200% due 11/17/14(c) 990 945
Tribune Co. Tranche B
7.910% due 5/30/14(c) 338 288
--------
1,233
--------
RESTAURANTS--0.2%
Burger King Corp. Tranche B1
7.690% due 6/30/12(c) 582 573
--------
SPECIALIZED FINANCE--0.8%
Solar Capital Corp. Tranche US
7.356% due 2/28/14(c) 1,957 1,893
--------
SPECIALTY CHEMICALS--0.1%
JohnsonDiversey, Inc. Tranche B
6.878% due 12/16/11(c) 205 201
--------
TRADING COMPANIES & DISTRIBUTORS--0.2%
United Rentals, Inc. Letter of Credit
7.570% due 2/14/11 117 114
United Rentals, Inc. Tranche B
7.320% due 2/14/11(c) 277 270
--------
384
--------
PAR
VALUE VALUE
(000) (000)
------- --------
WIRELESS TELECOMMUNICATION SERVICES--0.5%
ALLTEL Communications, Inc.
Tranche B3
9.029% due 5/15/15(c) $ 623 $ 599
Cricket Communications, Inc.
Tranche B1
8.198% due 6/16/13(c) 615 608
--------
1,207
- ----------------------------------------------------------------------------
TOTAL DOMESTIC LOAN AGREEMENTS
(IDENTIFIED COST $23,924) 23,153
- ----------------------------------------------------------------------------
FOREIGN LOAN AGREEMENTS(d)--0.5%
GERMANY--0.3%
Fresenius Medical Care AG & Co.
KGaA Tranche B
6.516% due 3/31/13(c) 902 877
--------
UNITED STATES--0.2%
Bausch & Lomb, Inc. Tranche
8.127% due 4/11/15(c) 264(l) 384
- ----------------------------------------------------------------------------
TOTAL FOREIGN LOAN AGREEMENTS
(IDENTIFIED COST $1,272) 1,261
- ----------------------------------------------------------------------------
DOMESTIC PREFERRED STOCK--0.1%
SHARES
--------
SPECIALIZED REITS--0.0%
Saul Centers, Inc. Series A
Pfd. 8%(f) 425 10
--------
THRIFTS & MORTGAGE FINANCE--0.1%
Chevy Chase Bank FSB Series C
Pfd. 8%(f) 3,925 100
Chevy Chase Preferred Capital
Corp. Series A Pfd. 10.375% 1,225 62
--------
162
- ----------------------------------------------------------------------------
TOTAL DOMESTIC PREFERRED STOCK
(IDENTIFIED COST $179) 172
- ----------------------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED
STOCKS--0.2%
DIVERSIFIED METALS & MINING--0.2%
Vale Capital Ltd. 6,000 388
- ----------------------------------------------------------------------------
TOTAL DOMESTIC CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $301) 388
- ----------------------------------------------------------------------------
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--0.0%
INTEGRATED TELECOMMUNICATION SERVICES--0.0%
AT&T Latin America Corp.
Class A(v) 64,050 $ 0(w)
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $282) 0
- ----------------------------------------------------------------------------
EXCHANGE TRADED FUNDS--1.9%
DIAMONDS(R) Trust
Series I 12,894 1,709
iShares MSCI EAFE(R) Index
Fund(f) 22,414 1,761
iShares Russell 2000(R) Index
Fund(f) 8,144 619
PowerShares QQQ(f) 11,020 565
- ----------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUNDS
(IDENTIFIED COST $4,780) 4,654
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--97.8%
(IDENTIFIED COST $246,667) 244,803
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--14.9%
MONEY MARKET MUTUAL FUNDS--13.2%
State Street Navigator
Prime Plus (4.88%
seven-day effective
yield)(h) 33,024,350 33,024
--------
PAR
VALUE
(000)
-------
COMMERCIAL PAPER(x)--1.7%
Nicor, Inc.
4.000% due 1/2/08 $ 4,385 4,385
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $37,409) 37,409
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--112.5%
(IDENTIFIED COST $284,076) 282,212(a)
Other assets and liabilities, net--(12.5)% (31,345)
--------
NET ASSETS--100.0% $250,867
========
See Notes to Financial Statements
58
PHOENIX MULTI-SECTOR FIXED INCOME SERIES
At December 31, 2007, the Fund had entered into forward currency contracts as
follows (reported in 000's):
Unrealized
Appreciation
Contract to Receive In Exchange for Settlement Date Value (Depreciation)
- -------------------- ---------------- ---------------- ------- --------------
JPY 270,936 USD 2,542 2/28/08 $2,441 $(101)
-----
(101)
=====
USD United States Dollar JPY Japanese Yen
(a) Federal Income Tax Information (reported in 000's): Net unrealized
depreciation of investment securities is comprised of gross appreciation of
$3,485 and gross depreciation of $5,893 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $284,620.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
2007, these securities amounted to a value of $37,085 (reported in 000's) or
14.8% of net assets.
(c) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(d) 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.
(e) Regulation S security. Security is offered and sold outside of the United
States, therefore, it is exempt from registration with the SEC under rules
903 and 904 of the Securities Act of 1933.
(f) All or a portion of security is on loan.
(g) All or a portion segregated as collateral for forward currency contracts.
(h) Represents security purchased with cash collateral received for securities
on loan.
(i) Par value represents Australian Dollar.
(j) Par value represents Brazilian Real.
(k) Par value represents Canadian Dollar.
(l) Par value represents Euro.
(m) Par value represents Hungarian Forint.
(n) Par value represents New Zealand Dollar.
(o) Par value represents Norwegian Krone.
(p) Par value represents Russian Ruble.
(q) Par value represents Singapore Dollar.
(r) Par value represents South African Rand.
(s) Par value represents Swedish Krona.
(t) Par value represents Turkish Lira.
(u) Illiquid security.
(v) Non-income producing.
(w) Amount is less than $1,000.
(x) The rate shown is the discount rate.
(y) Illiquid and restricted security. At December 31, 2007 this security
amounted to a value of $11 or 0.0% of (reported in 000's) net assets. For
acquisition information, see Note 6 "Illiquid and Restricted Securities" in
the Notes to Financial Statements.
See Notes to Financial Statements
59
PHOENIX MULTI-SECTOR SHORT TERM BOND SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
PAR
VALUE VALUE
(000) (000)
------- --------
U.S. GOVERNMENT SECURITIES--3.1%
U.S. TREASURY NOTES--3.1%
U.S. Treasury Note
3.125% due 11/30/09 $ 75 $ 75
3.375% due 11/30/12 875 872
4.250% due 11/15/17 400 407
- ----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $1,348) 1,354
- ----------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--7.7%
FHLMC
4.650% due 10/10/13 160 159
4.500% due 12/1/18 342 336
FNMA
4.000% due 7/1/19 184 177
5.000% due 2/1/20 95 95
5.000% due 8/1/20 52 52
6.000% due 8/1/34 198 202
5.500% due 3/1/35 246 246
5.500% due 4/1/35 579 579
6.500% due 8/1/36 101 104
6.000% due 1/1/37 532 540
FNMA 04-W6, 1A4
5.500% due 7/25/34 303 303
FNMA 05-57, CK
5.000% due 7/25/35 56 56
FNMA 05-65, DK
5.000% due 8/25/35 68 68
FNMA 05-65, PJ
5.000% due 8/25/35 191 191
FNMA 05-74, AG
5.000% due 9/25/35 70 70
FNMA 05-80, AD
5.500% due 9/25/35 222 221
- ----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $3,394) 3,399
- ----------------------------------------------------------------------------
AGENCY NON-MORTGAGE BACKED
SECURITIES--1.3%
FHLMC
5.200% due 3/5/19 595 596
- ----------------------------------------------------------------------------
TOTAL AGENCY NON-MORTGAGE BACKED
SECURITIES
(IDENTIFIED COST $584) 596
- ----------------------------------------------------------------------------
MUNICIPAL BONDS--4.1%
COLORADO--0.6%
Colorado Department of
Transportation Revenue
(AMBAC Insured)
6.000% due 6/15/11 240 258
--------
GEORGIA--0.6%
Georgia State Series C
5.250% due 7/1/16 115 121
5.250% due 7/1/18 160 168
--------
289
--------
PAR
VALUE VALUE
(000) (000)
------- --------
MARYLAND--0.4%
Maryland State
5.000% due 8/1/10 $ 170 $ 178
--------
MASSACHUSETTS--0.4%
Commonwealth of Massachusetts
General Obligation Series C
(FSA Insured)
5.500% due 12/1/17 150 172
--------
NEW YORK--0.7%
New York State Dormitory
Authority Series B Taxable
3.350% due 12/15/09 315 309
--------
PENNSYLVANIA--0.8%
Philadelphia School District
Taxable Series C (FSA
Insured)
4.290% due 7/1/10 350 348
--------
TEXAS--0.6%
Houston Texas Independent School
District (FSA Insured)
5.500% due 7/15/18 235 253
- ----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $1,808) 1,807
- ----------------------------------------------------------------------------
ASSET-BACKED SECURITIES--7.2%
Bombardier Capital Mortgage
Securitization Corp. 99-A, A3
5.980% due 1/15/18(c) 110 108
Capital One Auto Finance
Trust 05-BSS B
4.320% due 5/15/10 350 349
Carmax Auto Owner Trust
05-1 C 4.820%
due 10/15/11 200 199
Chase Funding Mortgage Loan
Asset-Backed Certificates
04-1, 1A4
4.111% due 8/25/30 80 79
DaimlerChrysler Auto Trust
05-A, B
3.880% due 7/8/11 250 249
Dunkin Securitization 06-1,
M1 144A
8.285% due 6/20/31(b) 160 162
GMAC Mortgage Corp. Loan
Trust 06-HE3, A2
5.750% due 10/25/36(c) 350 316
Great America Leasing Receivables
05-1, A4 144A
4.970% due 8/20/10(b) 230 230
GS Auto Loan Trust 06-1, A2
5.470% due 2/15/09 68 68
GSAMP Trust 06-S4, M6
6.065% due 5/25/36(c) (t) 310 3
JPMorgan Mortgage Acquisition
Corp. 06-CW2, AF3
6.080% due 8/25/36(c) 225 223
PAR
VALUE VALUE
(000) (000)
------- --------
MASTR Alternative Net Interest
Margin 06-6, N1 144A
5.865% due 9/26/46(b) (c) (s) $ 26 $ 2
Renaissance Home Equity Loan
Trust 05-3, AF3
4.814% due 11/25/35(c) 625 618
Renaissance Home Equity Loan
Trust 06-1, AF2
5.533% due 5/25/36(c) 131 129
Residential Funding Mortgage
Securities II, Inc. 05-HI2, A3
4.460% due 5/25/35 131 130
Structured Asset Securities Corp.
05-7XS, 1A2B
5.270% due 4/25/35(c) 300 297
- ----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $3,542) 3,162
- ----------------------------------------------------------------------------
DOMESTIC CORPORATE BONDS--18.7%
AEROSPACE & DEFENSE--0.3%
L-3 Communications Corp.
7.625% due 6/15/12 115 118
--------
AGRICULTURAL PRODUCTS--0.3%
Cargill, Inc. 144A
5.600% due 9/15/12(b) 115 117
--------
AIRLINES--3.2%
American Airlines, Inc. 01-1
6.977% due 11/23/22 412 381
Continental Airlines, Inc. 98-1A
6.648% due 3/15/19 164 165
Delta Air Lines, Inc. 00-1
7.379% due 11/18/11 211 211
JetBlue Airways Corp. 04-2
7.969% due 5/15/10(c) 251 250
United Airlines, Inc. 00-2
7.032% due 4/1/12 123 123
United Airlines, Inc. 01-1
6.071% due 9/1/14 266 264
--------
1,394
--------
APPLICATION SOFTWARE--0.1%
Intuit, Inc.
5.750% due 3/15/17(f) 41 40
--------
ASSET MANAGEMENT & CUSTODY BANKS--0.4%
Janus Capital Group, Inc.
6.250% due 6/15/12 75 77
Nuveen Investments, Inc.
5.000% due 9/15/10 95 87
--------
164
--------
AUTOMOBILE MANUFACTURERS--0.2%
Daimler Finance North America LLC
6.500% due 11/15/13 70 73
--------
See Notes to Financial Statements
60
PHOENIX MULTI-SECTOR SHORT TERM BOND SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
AUTOMOTIVE RETAIL--0.2%
Hertz Corp.(The)
8.875% due 1/1/14 $ 100 $ 102
--------
BROADCASTING & CABLE TV--0.9%
Comcast Cable Holdings LLC
7.875% due 8/1/13 150 165
COX Communications, Inc.
4.625% due 6/1/13 250 239
--------
404
--------
BUILDING PRODUCTS--0.1%
Esco Corp. 144A
8.625% due 12/15/13(b) 54 54
--------
CASINOS & GAMING--0.1%
MGM MIRAGE
8.500% due 9/15/10 15 16
Seminole Hard Rock Entertainment,
Inc./Seminole Hard Rock
International LLC 144A
7.491% due 3/15/14(b) (c) 25 24
--------
40
--------
CONSUMER FINANCE--3.1%
Ford Motor Credit Co. LLC
5.625% due 10/1/08 345 335
9.875% due 8/10/11 118 112
9.693% due 4/15/12(c) 135 132
GMAC LLC
6.034% due 9/23/08(c) 185 179
6.119% due 5/15/09(c) 135 126
6.875% due 9/15/11 38 32
MBNA Corp.
4.625% due 9/15/08 100 100
Residential Capital LLC
7.625% due 11/21/08 100 80
7.500% due 2/22/11 50 31
SLM Corp.
4.035% due 2/1/10(c) 250 227
--------
1,354
--------
DATA PROCESSING & OUTSOURCED SERVICES--0.7%
Convergys Corp.
4.875% due 12/15/09 250 253
First Data Corp. 144A
9.875% due 9/24/15(b) 65 61
--------
314
--------
DISTILLERS & VINTNERS--0.1%
Constellation Brands, Inc.
8.375% due 12/15/14 40 40
--------
ELECTRIC UTILITIES--0.7%
Consumers Energy Co. Series H
4.800% due 2/17/09 100 100
Entergy Gulf States, Inc.
3.600% due 6/1/08 200 198
--------
298
--------
PAR
VALUE VALUE
(000) (000)
------- --------
ELECTRICAL COMPONENTS & EQUIPMENT--0.2%
General Cable Corp.
7.606% due 4/1/15(c) $ 100 $ 96
--------
HEALTH CARE FACILITIES--0.1%
HCA, Inc.
9.125% due 11/15/14 45 47
--------
HOTELS, RESORTS & CRUISE LINES--0.1%
Starwood Hotels & Resort
Worldwide, Inc.
6.250% due 2/15/13 63 63
--------
INDEPENDENT POWER PRODUCERS & ENERGY
TRADERS--0.1%
Texas Competitive Electric Holdings
Co. LLC 144A
10.250% due 11/1/15(b) 36 36
--------
INDUSTRIAL CONGLOMERATES--0.2%
Textron Financial Corp.
5.125% due 11/1/10 100 102
--------
INVESTMENT BANKING & BROKERAGE--0.9%
Lehman Brothers Holdings, Inc.
6.000% due 7/19/12 65 66
Merrill Lynch & Co., Inc. (Brazil)
10.710% due 3/8/17(d) 200(h) 104
Morgan Stanley 144A (Brazil)
10.090% due 5/3/17(b)(d) 250(h) 128
Piper Jaffray Equipment Trust
Securities 144A
6.000% due 9/10/11(b) 125 119
--------
417
--------
LIFE SCIENCES TOOLS & SERVICES--0.3%
Fisher Scientific International, Inc.
6.750% due 8/15/14 140 143
--------
MOVIES & ENTERTAINMENT--0.2%
Time Warner, Inc.
6.875% due 5/1/12 100 105
--------
OFFICE SERVICES & SUPPLIES--0.2%
Steelcase, Inc.
6.500% due 8/15/11 100 105
--------
OIL & GAS EQUIPMENT & SERVICES--0.0%
Helix Energy Solutions 144A
9.500% due 1/15/16(b) 13 13
--------
OIL & GAS EXPLORATION & PRODUCTION--0.3%
Swift Energy Co.
7.625% due 7/15/11 125 126
--------
OIL & GAS REFINING & MARKETING--0.8%
Tesoro Corp.
6.250% due 11/1/12 115 116
Valero Energy Corp.
4.750% due 6/15/13 225 218
--------
334
--------
PAR
VALUE VALUE
(000) (000)
------- --------
OIL & GAS STORAGE & TRANSPORTATION--0.7%
Knight, Inc.
6.500% due 9/1/12 $ 110 $ 110
Pacific Energy Partners LP/Pacific
Energy Finance Corp.
7.125% due 6/15/14 75 78
Transcont Gas Pipe Corp.
7.000% due 8/15/11 100 105
--------
293
--------
OTHER DIVERSIFIED FINANCIAL SERVICES--0.8%
ERAC USA Finance Co. 144A
5.300% due 11/15/08(b) 85 84
General Electric Capital Corp.
6.125% due 2/22/11 125 131
JP Morgan & Co., Inc.
6.250% due 1/15/09 50 51
MassMutual Global Funding II
144A
3.500% due 3/15/10(b) 100 99
--------
365
--------
PAPER PACKAGING--0.6%
Jefferson Smurfit Corp.
8.250% due 10/1/12 40 39
Packaging Corp. of America
4.375% due 8/1/08 250 248
--------
287
--------
PAPER PRODUCTS--0.5%
AbitibiBowater, Inc.
7.991% due 3/15/10(c) 165 145
Verso Paper Holdings LLC and
Verso Paper, Inc. Series B
8.661% due 8/1/14(c) 85 83
--------
228
--------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.5%
Colonial Realty LP
4.800% due 4/1/11 250 244
--------
RETAIL REITS--0.1%
Simon Property Group LP
5.600% due 9/1/11 55 55
--------
SPECIALIZED FINANCE--0.2%
Yankee Acquisition Corp. Series B
8.500% due 2/15/15 80 74
--------
SPECIALIZED REITS--0.7%
Host Hotels & Resorts LP
6.875% due 11/1/14 115 115
Nationwide Health Properties
6.250% due 2/1/13 130 135
Ventas Realty LP/Ventas Capital
Corp.
6.750% due 6/1/10 50 51
--------
301
--------
See Notes to Financial Statements
61
PHOENIX MULTI-SECTOR SHORT TERM BOND SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
STEEL--0.1%
Steel Dynamics, Inc. 144A
7.375% due 11/1/12(b) $ 41 $ 41
--------
TOBACCO--0.5%
Philip Morris Capital Corp.
7.500% due 7/16/09 200 204
--------
WIRELESS TELECOMMUNICATION SERVICES--0.2%
Nextel Communications, Inc.
Series D
7.375% due 8/1/15 75 74
- ----------------------------------------------------------------------------
TOTAL DOMESTIC CORPORATE BONDS
(IDENTIFIED COST $8,380) 8,265
- ----------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--20.6%
American General Mortgage Loan
Trust 06-1, A2 144A
5.750% due 12/25/35(b) (c) 275 273
Asset Securitization Corp. 96-D3,
A1C
7.400% due 10/13/26 25 26
Banc of America Alternative Loan
Trust 06-9, A1
6.000% due 1/25/37 413 408
Bear Stearns Commercial Mortgage
Securities 04-ESA, J 144A
5.817% due 5/14/16(b) 350 359
Bear Stearns Structured Products,
Inc. 04-15, A2 144A
0% due 11/27/34(b) 39 37
Bear Stearns Structured Products,
Inc. 05-10 144A
7.365% due 4/26/35(b) (c) 108 102
Bear Stearns Structured Products,
Inc. 05-20N, A 144A
8.365% due 10/25/45(b) (c) 86 86
Chase Mortgage Finance Corp.
04-S1 M
5.098% due 2/25/19(c) 80 76
Chase Mortgage Finance Corp.
04-S3, 3A1
6.000% due 3/25/34 353 356
Chase Mortgage Finance Corp.
06-A1, 4A1
6.044% due 9/25/36(c) 415 419
Citicorp Mortgage Securities, Inc.
06-7, 1A1
6.000% due 12/25/36 111 111
Countrywide Home Loan Mortgage
Pass-Through Trust 04-13, 1A1
5.500% due 8/25/34 179 180
Countrywide Home Loan Mortgage
Pass-Through Trust 07-1, A2
6.000% due 3/25/37 258 260
Credit Suisse First Boston Mortgage
Securities Corp. 03-8, 3A24
5.500% due 4/25/33 290 279
Credit Suisse First Boston Mortgage
Securities Corp. 05-12, 6A1
6.000% due 1/25/36 143 141
Credit Suisse First Boston Mortgage
Securities Corp. 98-C1, B
6.590% due 5/17/40 390 391
PAR
VALUE VALUE
(000) (000)
------- --------
Crown Castle Towers LLC 05-1A,
AFX 144A
4.643% due 6/15/35(b) $ 250 $ 250
First Horizon Asset Securities, Inc.
05-AR1, 2A1
5.012% due 4/25/35(c) 235 236
Franchise Mortgage Acceptance Co.
Loan Receivables Trust 98-CA,
A2 144A
6.660% due 9/15/20(b) 65 63
GMAC Commercial Mortgage
Securities, Inc 98-C2 E
6.500% due 5/15/35 50 52
GMAC Mortgage Corp. Loan Trust
05-AR2, 2A
4.862% due 5/25/35(c) 303 300
GMAC Mortgage Corp. Loan Trust
05-HE2, A3
4.622% due 11/25/35(c) 76 75
GMAC Mortgage Corp. Loan Trust
06-HE2, A3
6.320% due 5/25/36 350 342
Greenwich Structured Adjustable
Rate Mortgage Products 05-4A,
N1 144A
7.793% due 7/27/45(b) (c) 25 25
GS Mortgage Securities Corp. II
07-EOP, G 144A
5.060% due 3/6/20(b) (c) 130 122
GS Mortgage Securities Corp. II
07-EOP, H 144A
5.190% due 3/6/20(b) (c) 110 105
Harborview Mortgage Loan Trust
05-15, B8
6.699% due 10/20/45(c) 200 140
Harborview Mortgage Loan Trust
05-9, B10
6.699% due 6/20/35(c) 129 105
Harborview Net Interest Margin
Corp. 06-12, N1 144A
6.409% due 12/19/36(b) 48 48
IndyMac Index Mortgage Loan Trust
06-AR25, 3A1
6.368% due 9/25/36(c) 184 184
Indymac Index Mortgage Loan Trust
07-AR2, B1
5.868% due 6/25/37(c) 135 116
JPMorgan Mortgage Trust 05-S3,
2A2
5.500% due 1/25/21 49 49
JPMorgan Mortgage Trust 06-A1,
B1
5.399% due 2/25/36(c) 248 243
Lehman Brothers - UBS
Commercial Mortgage Trust
07-C2, A2
5.303% due 2/15/40 225 226
Lehman XS Net Interest Margin
06-GPM4, A1 144A
6.250% due 9/28/46(b) 19 19
Lehman XS Net Interest Margin
06-GPM7, A1 144A
6.250% due 12/28/46(b) 62 61
MASTR Alternative Net Interest
Margin Trust 05-CW1A, N1 144A
6.750% due 12/26/35(b) (s) 22 19
PAR
VALUE VALUE
(000) (000)
------- --------
MASTR Resecuritization Trust
05-4CI, N2 144A
7.865% due 4/26/45(b) (c) (s) $ 120 $ 59
Merrill Lynch/Countrywide
Commercial Mortgage Investors,
Inc. 06-3, 2A1
6.090% due 10/25/36(c) 195 198
Residential Accredit Loans, Inc.
05-QA4, A5
5.450% due 4/25/35(c) 229 225
Residential Funding Mortgage
Securities I, Inc. 05-SA1, 2A
4.856% due 3/25/35(c) 165 163
Residential Funding Mortgage
Securities I, Inc. 06-S4, A2
6.000% due 4/25/36 215 217
SBA Commercial Mortgage Backed
Securities Trust 06-1A, B 144A
5.451% due 11/15/36(b) 95 94
Structured Asset Securities Corp.
03-32, 1A1
5.210% due 11/25/33(c) 165 161
Wachovia Bank Commercial
Mortgage Trust 2004-C12, A2
5.001% due 7/15/41 215 216
Wachovia Mortgage Loan Trust
LLC 06-A, B1
5.416% due 5/20/36(c) 249 237
Wells Fargo Mortgage Backed
Securities Trust 04-EE, 2A3
3.989% due 12/25/34(c) 165 163
Wells Fargo Mortgage Backed
Securities Trust 04-R, 2A1
4.360% due 9/25/34(c) 276 275
Wells Fargo Mortgage Backed
Securities Trust 05-14, 2A1
5.500% due 12/25/35 224 219
Wells Fargo Mortgage Backed
Securities Trust 05-5, 1A1
5.000% due 5/25/20 178 175
Wells Fargo Mortgage Backed
Securities Trust 05-AR10, 2A16
4.109% due 6/25/35(c) 210 204
Wells Fargo Mortgage Backed
Securities Trust 05-AR16, 6A3
5.000% due 10/25/35(c) 223 224
- ----------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $9,322) 9,114
- ----------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--15.6%
ARGENTINA--0.4%
Republic of Argentina
5.389% due 8/3/12(c) 194 171
--------
AUSTRALIA--1.2%
Commonwealth of Australia
Series 909
7.500% due 9/15/09 622(g) 552
--------
BRAZIL--1.9%
Federative Republic of Brazil
10.500% due 7/14/14 45 57
7.875% due 3/7/15 150 170
12.500% due 1/5/16 737(h) 451
12.500% due 1/5/22 250(h) 157
--------
835
--------
See Notes to Financial Statements
62
PHOENIX MULTI-SECTOR SHORT TERM BOND SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
CANADA--0.4%
Commonwealth of Canada
3.750% due 6/1/08 193(i) $ 195
--------
CHILE--0.6%
Republic of Chile
5.411% due 1/28/08(c) $ 250 250
--------
COLOMBIA--0.2%
Republic of Colombia
10.000% due 1/23/12 60 70
--------
GERMANY--0.4%
Federal Republic of Germany
144A
3.250% due 4/17/09(b) 115(j) 166
--------
HUNGARY--0.2%
Republic of Hungary
6.250% due 4/24/09 20,000(k) 114
--------
INDONESIA--0.2%
Republic of Indonesia 144A
7.250% due 4/20/15(b) 100 106
--------
MEXICO--0.6%
United Mexican States
5.943% due 1/13/09(c) 250 250
--------
NEW ZEALAND--0.5%
Commonwealth of New Zealand
Series 708
6.000% due 7/15/08 307(l) 234
--------
NORWAY--1.4%
Kingdom of Norway
5.500% due 5/15/09 3,225(m) 600
--------
PHILIPPINES--1.2%
Republic of Philippines
8.375% due 3/12/09 200 208
8.375% due 2/15/11 285 308
--------
516
--------
RUSSIA--0.3%
Russian Federation RegS
7.500% due 3/31/30(c) (e) 114 130
--------
SINGAPORE--0.3%
Singapore Government
2.500% due 10/1/12 175(o) 123
--------
SWEDEN--0.2%
Kingdom of Sweden Series 1043
5.000% due 1/28/09 715(p) 112
--------
TRINIDAD AND TOBAGO--0.2%
Republic of Trinidad and Tobago RegS
9.875% due 10/1/09(e) 75 82
--------
TURKEY--2.3%
Republic of Turkey
10.500% due 1/13/08 350 351
0% due 5/6/09 400(q) 277
11.750% due 6/15/10 340 395
--------
1,023
--------
PAR
VALUE VALUE
(000) (000)
------- --------
VENEZUELA--3.1%
Republic of Venezuela
8.500% due 10/8/14 $ 330 $ 319
5.750% due 2/26/16 140 113
Republic of Venezuela RegS
5.375% due 8/7/10(e) 975 919
--------
1,351
- ----------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $6,630) 6,880
- ----------------------------------------------------------------------------
FOREIGN CORPORATE BONDS(d)--9.1%
CANADA--0.6%
European Investment Bank 144A
4.600% due 1/30/37(b) 150(j) 149
Thomson Corp. (The)
4.250% due 8/15/09 100 100
--------
249
--------
CHILE--0.7%
Celulosa Arauco y Constitucion SA
7.750% due 9/13/11 165 178
Empresa Nacional de Electricidad SA
7.750% due 7/15/08 120 121
--------
299
--------
GERMANY--0.6%
Deutsche Bank AG NY Series GS
4.055% due 3/22/12(c) 250 250
--------
HONG KONG--0.6%
Hutchison Whampoa International
Ltd. 144A
5.450% due 11/24/10(b) 250 253
--------
INDIA--0.4%
ICICI Bank Ltd. 144A
5.750% due 11/16/10(b) 175 174
--------
LUXEMBOURG--0.1%
Tyco Electronic Group SA 144A
6.000% due 10/1/12(b) 35 36
--------
MALAYSIA--0.4%
Malaysia International Shipping
Corporation Capital Ltd. 144A
5.000% due 7/1/09(b) 200 201
--------
MEXICO--0.4%
Fideicomiso Petacalco Trust 144A
10.160% due 12/23/09(b) 74 76
Vitro S.A.B. de C.V.
8.625% due 2/1/12 115 109
--------
185
--------
NETHERLANDS--0.4%
Majapahit Holding BV 144A
7.250% due 6/28/17(b) 100 96
NXP BV/NXP Funding LLC
7.993% due 10/15/13(c) 105 97
--------
193
--------
PAR
VALUE VALUE
(000) (000)
------- --------
POLAND--0.5%
Telekomunikacja Polska SA Finance
BV 144A
7.750% due 12/10/08(b) $ 225 $ 231
--------
QATAR--0.2%
Ras Laffan Liquefied Natural Gas
Co. Ltd. 144A
3.437% due 9/15/09(b) 97 97
--------
RUSSIA--2.2%
European Bank for Reconstruction
& Development
6.000% due 2/14/12 5,000(n) 197
Gazprom OAO (Gaz Capital SA)
144A(b)
6.212% due 11/22/16 230 221
6.510% due 3/7/22 100 95
OJSC AK Transneft
(TransCapitalInvest Ltd.) 144A
5.670% due 3/5/14(b) 270 259
Russian Agricultural Bank OJSC
(RSHB Capital SA) 144A
6.299% due 5/15/17(b) 100 95
TNK-BP Finance SA RegS
6.125% due 3/20/12(e) 115 110
--------
977
--------
SOUTH KOREA--0.3%
Export-Import Bank of Korea
4.500% due 8/12/09 120 119
--------
SWITZERLAND--0.2%
Petroplus Finance Ltd. 144A
6.750% due 5/1/14(b) 75 70
--------
UKRAINE--0.2%
NAK Naftogaz Ukrainy (Standard
Bank London Holdings plc)
8.125% due 9/30/09 100 95
--------
UNITED ARAB EMIRATES--0.4%
Abu Dhabi National Energy Co.
144A
5.620% due 10/25/12(b) 170 172
--------
UNITED STATES--0.9%
Invesco plc
4.500% due 12/15/09 250 246
Nova Chemicals Corp.
7.863% due 11/15/13(c) 170 160
--------
406
- ----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $4,060) 4,007
- ----------------------------------------------------------------------------
DOMESTIC CONVERTIBLE BONDS--0.1%
PHARMACEUTICALS--0.1%
Par Pharmaceutical Cos., Inc.
2.875% due 9/30/10 40 37
- ----------------------------------------------------------------------------
TOTAL DOMESTIC CONVERTIBLE BONDS
(IDENTIFIED COST $35) 37
- ----------------------------------------------------------------------------
See Notes to Financial Statements
63
PHOENIX MULTI-SECTOR SHORT TERM BOND SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
FOREIGN CREDIT LINKED NOTES--0.2%
INDONESIA--0.2%
Republic of Indonesia
(Citigroup, Inc.)
11.867% due 6/15/09 $ 120 $ 106
- ----------------------------------------------------------------------------
TOTAL FOREIGN CREDIT LINKED NOTES
(IDENTIFIED COST $111) 106
- ----------------------------------------------------------------------------
DOMESTIC LOAN AGREEMENTS(c)--8.5%
ADVERTISING--0.1%
Lamar Media Corp. Tranche F
6.875% due 3/31/14 25 25
--------
ALTERNATIVE CARRIERS--0.3%
Level 3 Communications, Inc.
Tranche B
7.493% due 3/13/14 17 16
Time Warner Telecom Holdings
Tranche B
8.471% due 1/7/13 120 116
--------
132
--------
APPAREL RETAIL--0.3%
Hanesbrands, Inc. Tranche B
7.090% due 9/5/13 40 40
HBI Branded Apparel Ltd., Inc.
Tranche 2
9.110% due 3/5/14 65 65
Totes Isotoner Corp. Tranche B
7.814% due 1/16/13 16 15
--------
120
--------
APPLICATION SOFTWARE--0.2%
Reynolds & Reynolds Co. (The)
Tranche FL
7.198% due 10/24/12 93 89
--------
ASSET MANAGEMENT & CUSTODY BANKS--0.0%
Nuveen Investments, Inc.
Tranche Term B
7.841% due 11/13/14 19 19
--------
AUTOMOBILE MANUFACTURERS--0.4%
Ford Motor Co. Tranche B
8.360% due 12/15/13 114 106
General Motors Corp. Tranche B
7.745% due 11/29/13 94 89
--------
195
--------
BROADCASTING & CABLE TV--0.7%
Charter Communications
Operating LLC Tranche
7.360% due 3/6/14 248 232
DIRECTV Holdings LLC Tranche B
6.820% due 4/13/13 65 65
--------
297
--------
CASINOS & GAMING--0.0%
Wimar Operating Co. LLC Tranche B
7.610% due 1/3/12 17 16
--------
PAR
VALUE VALUE
(000) (000)
------- --------
DATA PROCESSING & OUTSOURCED SERVICES--0.3%
First Data Corp. Tranche B3
7.710% due 9/24/14 $ 149 $ 142
--------
DEPARTMENT STORES--0.3%
Neiman-Marcus Group, Inc. (The)
Tranche
7.346% due 4/6/13 144 139
--------
DISTRIBUTORS--0.3%
Building Materials Holding Corp.
Tranche B
7.850% due 11/10/13 158 135
--------
DIVERSIFIED CHEMICALS--0.3%
Celanese Holdings LLC Tranche
Term B
8.181% due 3/30/14 120 115
Huntsman Corp. Tranche B
7.070% due 8/16/12 17 17
--------
132
--------
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES--0.1%
ARAMARK Corp. Letter of Credit
7.198% due 1/26/14 3 3
ARAMARK Corp. Tranche B
7.198% due 1/26/14 41 39
--------
42
--------
ELECTRIC UTILITIES--0.1%
Energy Future Holdings Tranche B2
8.645% due 10/10/14 62 61
--------
ELECTRICAL COMPONENTS & EQUIPMENT--0.2%
Baldor Electric Co. Tranche
6.938% due 1/31/14 74 72
--------
ENVIRONMENTAL & FACILITIES SERVICES--0.5%
Allied Waste North America, Inc.
Letter of Credit A
6.621% due 3/28/14 33 31
Allied Waste North America, Inc.
Tranche B
6.440% due 3/28/14 54 52
Duratek, Inc. Tranche B
7.660% due 6/30/16 11 11
EnergySolutions LLC Tranche
7.570% due 2/26/14 107 104
EnergySolutions LLC Tranche B
7.660% due 6/7/13 23 23
EnviroCare Tranche C
7.570% due 6/30/16 1 1
--------
222
--------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.0%
Mosaic Co. (The) Tranche B
7.112% due 12/1/13 6 6
--------
HEALTH CARE FACILITIES--0.4%
HCA, Inc. Tranche B
7.610% due 11/16/13 55 53
PAR
VALUE VALUE
(000) (000)
------- --------
HEALTH CARE FACILITIES--CONTINUED
Health Management Associates, Inc.
Tranche B
7.110% due 2/28/14 $ 35 $ 33
LifePoint Hospitals, Inc.
Tranche B
6.985% due 4/15/12 83 79
--------
165
--------
HEALTH CARE SERVICES--0.2%
Davita Inc. Tranche B1
6.860% due 10/5/12 113 109
--------
HOUSEWARES & SPECIALTIES--0.1%
Yankee Candle Co., Inc.
Tranche B
8.891% due 2/6/14 50 47
--------
INDEPENDENT POWER PRODUCERS & ENERGY
TRADERS--0.4%
Mirant North America LLC
Tranche B
7.070% due 1/3/13 40 38
NRG Energy, Inc. Letter of Credit
7.070% due 2/1/13 108 108
NRG Energy, Inc. Tranche B1
7.070% due 2/1/13 39 38
--------
184
--------
INTEGRATED TELECOMMUNICATION SERVICES--0.6%
NTELOS, Inc. Tranche B1
7.570% due 8/24/11 265 263
--------
LEISURE FACILITIES--0.1%
AMF Bowling Worldwide, Inc. Tranche B
7.860% due 5/17/13 60 57
--------
OIL & GAS DRILLING--0.1%
Hercules Offshore, Inc. Tranche
7.110% due 7/11/13 52 50
--------
OIL & GAS EQUIPMENT & SERVICES--0.2%
Helix Energy Solutions Group, Inc.
Tranche
7.320% due 7/1/13 90 87
--------
PAPER PRODUCTS--0.1%
NewPage Corp. Tranche B
9.891% due 12/20/14 24 23
--------
PUBLISHING--0.4%
Idearc, Inc. Tranche B
7.360% due 11/17/14 114 109
Tribune Co. Tranche B
8.375% due 5/17/14 60 51
--------
160
--------
RESTAURANTS--0.3%
Burger King Corp. Tranche B1
6.750% due 6/30/12 117 115
--------
See Notes to Financial Statements
64
PHOENIX MULTI-SECTOR SHORT TERM BOND SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
SEMICONDUCTORS--0.3%
Freescale Semiconductor, Inc.
Tranche
7.110% due 12/1/13 $ 124 $ 115
--------
SPECIALIZED FINANCE--0.4%
Solar Capital Corp. Tranche US
7.590% due 2/11/13 191 184
--------
SPECIALTY CHEMICALS--0.1%
JohnsonDiversey, Inc. Tranche B
7.860% due 12/16/11 26 26
--------
WIRELESS TELECOMMUNICATION SERVICES--0.7%
ALLTEL Communications, Inc.
Tranche B3
9.029% due 5/15/15 114 109
Cricket Communications, Inc.
Tranche B1
7.360% due 6/16/13 111 110
MetroPCS Wireless, Inc. Tranche B
7.625% due 11/3/13 118 113
--------
332
- ----------------------------------------------------------------------------
TOTAL DOMESTIC LOAN AGREEMENTS
(IDENTIFIED COST $3,874) 3,761
- ----------------------------------------------------------------------------
FOREIGN LOAN AGREEMENTS(c)--0.6%
GERMANY--0.3%
Fresenius Medical Care AG & Co.
KGaA Tranche B
6.735% due 3/31/13 135 132
--------
PAR
VALUE VALUE
(000) (000)
------- --------
UNITED KINGDOM--0.2%
Yell Group plc Tranche B1
7.320% due 2/10/13 $ 75 $ 72
--------
UNITED STATES--0.1%
Bausch & Lomb, Inc. Tranche
8.127% due 4/11/15 33(l) 48
- ----------------------------------------------------------------------------
TOTAL FOREIGN LOAN AGREEMENTS
(IDENTIFIED COST $257) 252
- ----------------------------------------------------------------------------
SHARES
-------
EXCHANGE TRADED FUNDS--0.8%
DIAMONDS(R) Trust
Series I 1,444 191
iShares MSCI EAFE(R) Index
Fund 920 72
iShares Russell 2000(R) Index
Fund 730 56
PowerShares QQQ 1,100 56
- ----------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUNDS
(IDENTIFIED COST $382) 375
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--97.6%
(IDENTIFIED COST $43,724) 43,115
- ----------------------------------------------------------------------------
PAR
VALUE VALUE
(000) (000)
------- --------
SHORT-TERM INVESTMENTS--2.0%
COMMERCIAL PAPER(r)--2.0%
Nicor, Inc.
4.000% due 1/2/08 $ 870 $ 870
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $870) 870
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.6%
(IDENTIFIED COST $44,594) 43,985(a)
Other assets and liabilities, net--0.4% 183
--------
NET ASSETS--100.0% $ 44,168
========
At December 31, 2007, the Fund had entered into forward currency contracts as
follows (reported in 000's):
Unrealized
Appreciation
Contract to Receive In Exchange for Settlement Date Value (Depreciation)
- ------------------- --------------- --------------- ----- --------------
JPY 48,453 USD 455 2/28/08 $437 $(18)
----
(18)
====
USD United States Dollar JPY Japanese Yen
(a) Federal Income Tax Information (reported in 000's): Net unrealized
depreciation of investment securities is comprised of gross appreciation of
$298 and gross depreciation of $940 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $44,627.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
2007, these securities amounted to a value of $5,389 or 12.2% (reported in
000's) of net assets.
(c) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(d) A security is considered to be foreign if the security is issued in a
foreign country. The country of risk, noted parenthetically or in the
header, is determined based on criteria described in Note 2G, "Foreign
security country determination" in the Notes to Financial Statements.
(e) Regulation S security. Security is offered and sold outside of the United
States, therefore, it is exempt from registration with the SEC under rules
903 and 904 of the Securities Act of 1933.
(f) All or a portion segregated as collateral for forward currency contracts.
(g) Par value represents Australian Dollar.
(h) Par value represents Brazilian Real.
(i) Par value represents Canadian Dollar.
(j) Par value represents Euro.
(k) Par value represents Hungarian Forint.
(l) Par value represents New Zealand Dollar.
(m) Par value represents Norwegian Krone.
(n) Par value represents Russian Ruble.
(o) Par value represents Singapore Dollar.
(p) Par value represents Swedish Krona.
(q) Par value represents Turkish Lira.
(r) The rate shown is the discount rate.
(s) Illiquid and restricted security. At December 31, 2007, these securities
amounted to a value of $80 or 0.2% of (reported in 000's) net assets. For
acquisition information, see Note 6 "Illiquid and Restricted Securities" in
the Notes to Financial Statements.
(t) Illiquid Security.
See Notes to Financial Statements
65
PHOENIX STRATEGIC ALLOCATION SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
PAR
VALUE VALUE
(000) (000)
------- --------
U.S. GOVERNMENT SECURITIES--1.1%
U.S. TREASURY BONDS--0.7%
U.S. Treasury Bond
5.000% due 5/15/37 $ 1,620 $ 1,766
--------
U.S. TREASURY NOTES--0.4%
U.S. Treasury Note
3.375% due 11/30/12 125 124
4.250% due 11/15/17 1,075 1,094
--------
1,218
--------
- ----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $2,953) 2,984
- ----------------------------------------------------------------------------
AGENCY NON-MORTGAGE BACKED
SECURITIES--0.6%
FHLMC
5.200% due 3/5/19 1,520 1,521
- ----------------------------------------------------------------------------
TOTAL AGENCY NON-MORTGAGE BACKED SECURITIES
(IDENTIFIED COST $1,492) 1,521
- ----------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--6.7%
FHLMC R010-AB
5.500% due 12/15/19 568 574
FNMA
4.500% due 6/1/19 455 448
4.000% due 6/1/20 618 592
5.000% due 6/1/20 1,453 1,454
4.500% due 7/1/20 1,142 1,123
6.500% due 10/1/31 32 33
6.000% due 9/1/32 210 214
5.000% due 5/1/34 947 925
5.500% due 5/1/34 1,029 1,029
5.500% due 6/1/34 2,834 2,834
6.000% due 7/1/34 454 462
5.000% due 6/1/35 4,361 4,257
5.000% due 11/1/35 1,268 1,237
5.000% due 3/1/36 665 649
5.500% due 1/1/37 540 539
5.500% due 4/1/37 298 298
FNMA 04-W6, 1A4
5.500% due 7/25/34 491 491
GNMA
6.500% due 11/15/23 76 79
6.500% due 12/15/23 18 19
6.500% due 2/15/24 143 148
6.500% due 6/15/28 168 174
6.500% due 7/15/31 115 119
6.500% due 11/15/31 105 109
6.500% due 2/15/32 143 149
6.500% due 4/15/32 122 127
- ----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $18,173) 18,083
- ----------------------------------------------------------------------------
PAR
VALUE VALUE
(000) (000)
------- --------
MUNICIPAL BONDS--2.8%
CALIFORNIA--1.0%
Alameda Corridor Transportation
Authority Series C Taxable
(MBIA Insured)
6.600% due 10/1/29 $ 1,000 $ 1,097
Kern County Pension Obligation
Taxable (MBIA Insured)
7.260% due 8/15/14 420 468
Sonoma County Pension
Obligation Taxable
(FSA Insured)
6.625% due 6/1/13 1,065 1,116
--------
2,681
--------
FLORIDA--0.1%
Miami-Dade County Educational
Facilities Authority Taxable
Series C
5.480% due 4/1/16 200 201
--------
MASSACHUSETTS--0.1%
Commonwealth of Massachusetts
General Obligation Series C
(FSA Insured)
5.500% due 12/1/17 295 338
--------
MINNESOTA--0.4%
State of Minnesota, General
Revenue
5.000% due 8/1/19 900 989
--------
MISSISSIPPI--0.3%
Mississippi Development Bank
Series A Taxable (FSA Insured)
5.000% due 6/1/12 710 718
--------
PENNSYLVANIA--0.5%
City of Pittsburgh Pension
Obligation Taxable Series C
(FGIC Insured)
6.500% due 3/1/17 1,250 1,359
--------
TEXAS--0.4%
City of Dallas
5.000% due 2/15/17 1,100 1,203
- ----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $7,104) 7,489
- ----------------------------------------------------------------------------
ASSET-BACKED SECURITIES--2.5%
Bayview Financial Acquisition
Trust 06-A, 1A2
5.483% due 2/28/41(c) 325 316
Capital One Auto Finance Trust
07-B, A3A
5.030% due 4/15/12 925 931
Carmax Auto Owner Trust
05-2, A4
4.340% due 9/15/10 900 897
PAR
VALUE VALUE
(000) (000)
------- --------
Carmax Auto Owner Trust
07-2, A3
5.230% due 12/15/11 $ 1,550 $ 1,566
Dunkin Securitization 06-1,
M1 144A
8.285% due 6/20/31(b) 305 308
GS Auto Loan Trust 06-1,
A2
5.470% due 2/15/09 137 137
JPMorgan Mortgage Acquisition
Corp. 06-CW2, AF3
6.080% due 8/25/36(c) 470 465
Nomura Asset Acceptance Corp.
07-1, 1A2
5.669% due 3/25/47(c) 620 558
Residential Funding Mortgage
Securities II, Inc. 06-HSA1,
A3
5.230% due 2/25/36(c) 1,000 811
Wachovia Auto Loan Owner
Trust 06-2A, A3 144A
5.230% due 8/22/11(b) 675 676
- ----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $6,908) 6,665
- ----------------------------------------------------------------------------
DOMESTIC CORPORATE BONDS--9.5%
AEROSPACE & DEFENSE--0.5%
L-3 Communications Corp.
7.625% due 6/15/12 250 257
Rockwell Collins, Inc.
4.750% due 12/1/13 1,000 1,019
--------
1,276
--------
AIRLINES--0.6%
American Airlines, Inc. 01-1
6.977% due 11/23/22 597 552
Continental Airlines, Inc. 98-1A
6.648% due 3/15/19 457 460
JetBlue Airways Corp. 04-2
7.969% due 5/15/10(c) 387 385
United Airlines, Inc. 01-1
6.071% due 9/1/14 286 285
--------
1,682
--------
APPLICATION SOFTWARE--0.0%
Intuit, Inc.
5.750% due 3/15/17 71 70
--------
ASSET MANAGEMENT & CUSTODY BANKS--0.1%
Bank of New York Mellon Corp. (The)
4.950% due 11/1/12 180 180
Janus Capital Group, Inc.
6.250% due 6/15/12 150 154
--------
334
--------
AUTOMOBILE MANUFACTURERS--0.1%
Daimler Finance North America LLC
6.500% due 11/15/13 130 136
--------
See Notes to Financial Statements
66
PHOENIX STRATEGIC ALLOCATION SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
AUTOMOTIVE RETAIL--0.1%
AutoNation, Inc.
7.000% due 4/15/14 $ 245 $ 233
--------
BROADCASTING & CABLE TV--0.0%
Time Warner Cable, Inc.
5.850% due 5/1/17 130 130
--------
BUILDING PRODUCTS--0.2%
CRH America, Inc. (Ireland)
6.000% due 9/30/16(d) 255 249
Masco Corp.
5.850% due 3/15/17 165 160
Owens Corning, Inc.
6.500% due 12/1/16 60 55
--------
464
--------
CASINOS & GAMING--0.1%
MGM MIRAGE
8.500% due 9/15/10 25 26
Seneca Gaming, Corp. Series B
7.250% due 5/1/12 225 228
--------
254
--------
COMMUNICATIONS EQUIPMENT--0.1%
Cisco Systems, Inc.
5.500% due 2/22/16 250 254
--------
CONSTRUCTION MATERIALS--0.1%
Vulcan Materials Co.
5.600% due 11/30/12 190 191
--------
CONSUMER FINANCE--1.1%
Ford Motor Credit Co. LLC
8.625% due 11/1/10 180 167
9.875% due 8/10/11 238 225
9.693% due 4/15/12(c) 50 49
7.800% due 6/1/12 200 175
GMAC LLC
6.875% due 9/15/11 38 33
6.875% due 8/28/12 500 419
6.750% due 12/1/14 80 65
Residential Capital LLC
7.625% due 11/21/08 125 100
SLM Corp.
4.035% due 2/1/10(c) 1,950 1,772
--------
3,005
--------
DATA PROCESSING & OUTSOURCED SERVICES--0.1%
Broadridge Financial Solutions, Inc.
6.125% due 6/1/17 250 247
First Data Corp. 144A
9.875% due 9/24/15(b) 110 103
--------
350
--------
DIVERSIFIED BANKS--0.4%
National Capital Trust II 144A
5.486% due 12/29/49(b) (c) 950 868
Wachovia Corp.
4.875% due 2/15/14 355 341
--------
1,209
--------
PAR
VALUE VALUE
(000) (000)
------- --------
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES--0.1%
Equifax, Inc.
6.300% due 7/1/17 $ 240 $ 244
--------
DRUG RETAIL--0.1%
CVS Caremark Corp.
5.750% due 6/1/17 260 262
--------
ELECTRIC UTILITIES--0.5%
Entergy Gulf States, Inc.
5.700% due 6/1/15 1,000 973
Great River Energy 144A
5.829% due 7/1/17(b) 150 156
Southern Power Co. Series D
4.875% due 7/15/15 280 265
--------
1,394
--------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.4%
Mettler-Toledo International, Inc.
4.850% due 11/15/10 1,000 1,023
--------
FOOD RETAIL--0.1%
Kroger Co. (The)
6.800% due 12/15/18 130 138
Safeway, Inc.
6.350% due 8/15/17 190 198
--------
336
--------
GAS UTILITIES--0.2%
AmeriGas Partners LP
7.250% due 5/20/15 500 492
--------
HEALTH CARE DISTRIBUTORS--0.0%
Cardinal Health, Inc. 144A
6.000% due 6/15/17(b) 80 81
--------
HEALTH CARE EQUIPMENT--0.1%
HCA, Inc. 144A
9.250% due 11/15/16(b) 180 189
--------
HEALTH CARE SERVICES--0.1%
Quest Diagnostics, Inc.
6.400% due 7/1/17 280 289
--------
HOME FURNISHINGS--0.1%
Mohawk Industries, Inc.
6.125% due 1/15/16 275 275
--------
HOTELS, RESORTS & CRUISE LINES--0.1%
Royal Caribbean Cruises Ltd.
7.250% due 6/15/16 285 282
--------
INDEPENDENT POWER PRODUCERS & ENERGY
TRADERS--0.1%
AES Corp. (The) 144A
7.750% due 10/15/15(b) 250 255
--------
INDUSTRIAL MACHINERY--0.8%
ITW Cupids Financing Trust I 144A
6.550% due 12/31/11(b) 2,000 2,102
--------
PAR
VALUE VALUE
(000) (000)
------- --------
INTEGRATED TELECOMMUNICATION SERVICES--0.2%
Citizens Communications Co.
6.250% due 1/15/13 $ 190 $ 185
Qwest Corp.
7.875% due 9/1/11 125 130
6.500% due 6/1/17 143 137
Verizon Communications, Inc.
4.900% due 9/15/15 225 219
--------
671
--------
INVESTMENT BANKING & BROKERAGE--0.5%
BlackRock, Inc.
6.250% due 9/15/17 300 309
Lehman Brothers Holdings, Inc.
6.000% due 7/19/12 300 306
Merrill Lynch & Co., Inc.
6.110% due 1/29/37 270 238
Merrill Lynch & Co., Inc. (Brazil)
10.710% due 3/8/17 240(h) 124
Morgan Stanley 144A (Brazil)
10.090% due 5/3/17(b) 600(h) 307
--------
1,284
--------
LEISURE PRODUCTS--0.1%
Hasbro, Inc.
6.300% due 9/15/17 200 205
--------
MOVIES & ENTERTAINMENT--0.1%
Time Warner, Inc.
6.875% due 5/1/12 200 211
--------
MULTI-LINE INSURANCE--0.1%
Assurant, Inc.
5.625% due 2/15/14 250 245
--------
MULTI-UTILITIES--0.1%
Dominion Resources, Inc. Series D
5.000% due 3/15/13(m) 175 171
--------
OFFICE ELECTRONICS--0.1%
Xerox Corp.
6.750% due 2/1/17 325 339
--------
OFFICE REITS--0.1%
HRPT Properties Trust
5.750% due 11/1/15 275 257
--------
OFFICE SERVICES & SUPPLIES--0.1%
Pitney Bowes, Inc.
4.750% due 5/15/18 375 349
--------
OIL & GAS EQUIPMENT & SERVICES--0.0%
Helix Energy Solutions 144A
9.500% due 1/15/16(b) 50 51
--------
OIL & GAS EXPLORATION & PRODUCTION--0.3%
Apache Corp.
6.000% due 1/15/37 365 362
Plains Exploration & Production Co.
7.750% due 6/15/15 125 126
XTO Energy, Inc.
6.250% due 8/1/17 190 199
--------
687
--------
See Notes to Financial Statements
67
PHOENIX STRATEGIC ALLOCATION SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
OIL & GAS REFINING & MARKETING--0.1%
Tesoro Corp.
6.500% due 6/1/17 $ 255 $ 254
--------
OIL & GAS STORAGE & TRANSPORTATION--0.4%
Kinder Morgan Management Co. ULC
5.700% due 1/5/16 725 660
NGPL PipeCo. LLC 144A
6.514% due 12/15/12(b) 250 254
TEPPCO Partners LP
7.625% due 2/15/12 130 143
--------
1,057
--------
OTHER DIVERSIFIED FINANCIAL SERVICES--0.4%
General Electric Capital Corp.
5.375% due 10/20/16 700 709
JPMorgan Chase & Co.
5.250% due 5/1/15 250 244
--------
953
--------
PAPER PRODUCTS--0.0%
Verso Paper Holdings LLC and
Verso Paper, Inc. Series B
8.661% due 8/1/14(c) 93 91
--------
REGIONAL BANKS--0.4%
SunTrust Banks, Inc.
5.250% due 11/5/12 150 151
Zions Bancorporation
5.650% due 5/15/14 1,000 981
--------
1,132
--------
SPECIALIZED REITS--0.1%
Host Hotels & Resorts LP
6.875% due 11/1/14 200 200
Realty Income Corp.
6.750% due 8/15/19 110 113
--------
313
--------
TOBACCO--0.2%
Reynolds American, Inc.
7.300% due 7/15/15 600 623
- ----------------------------------------------------------------------------
TOTAL DOMESTIC CORPORATE BONDS
(IDENTIFIED COST $25,963) 25,705
- ----------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--12.2%
Banc of America Alternative Loan
Trust 06-9, A1
6.000% due 1/25/37 1,219 1,202
Banc of America Funding Corp.
05-8, 1A1
5.500% due 1/25/36 584 578
Bear Stearns Adjustable Rate
Mortgage Trust 05-12, 13A1
5.444% due 2/25/36(c) 613 601
Bear Stearns Commercial Mortgage
Securities 06-PW12, A4
5.711% due 9/11/38(c) 720 744
Bear Stearns Commercial Mortgage
Securities 07-PW18, AM
6.084% due 6/11/50(c) 550 553
PAR
VALUE VALUE
(000) (000)
------- --------
Citigroup Mortgage Loan Trust,
Inc. 05-5, 2A3
5.000% due 8/25/35 $ 553 $ 551
Citigroup/Deutsche Bank
Commercial Mortgage Trust
06-CD2, A4
5.362% due 1/15/46(c) 1,190 1,196
Countrywide Home Loan
Mortgage Pass-Through Trust
04-13, 1A1
5.500% due 8/25/34 716 719
Credit Suisse First Boston
Mortgage Securities Corp.
05-12, 6A1
6.000% due 1/25/36 962 953
Credit Suisse Mortgage Capital
Certificates 06-C1, A4
5.555% due 2/15/39(c) 1,710 1,736
Crown Castle Towers LLC 05-1A,
AFX 144A
4.643% due 6/15/35(b) 800 800
DLJ Commercial Mortgage Corp.
98-CF2, A1B
6.240% due 11/12/31 2,651 2,664
First Horizon Asset Securities, Inc.
05-AR1, 2A1
5.012% due 4/25/35(c) 763 768
GMAC Mortgage Corp. Loan Trust
05-HE2, A3
4.622% due 11/25/35(c) 379 375
GS Mortgage Securities Corp. II
05-GG4, AJ
4.782% due 7/10/39 800 727
GS Mortgage Securities Corp. II
99-C1, A2
6.110% due 11/18/30(c) 2,024 2,029
Harborview Net Interest Margin
Corp. 06-12, N1 144A
6.409% due 12/19/36(b) 58 57
IndyMac Index Mortgage Loan
Trust 06-AR25, 3A1
6.368% due 9/25/36(c) 612 613
JPMorgan Chase Commercial
Mortgage Securities Corp.
01-CIBC, A3
6.260% due 3/15/33 1,123 1,165
JPMorgan Mortgage Acquisition
Corp. 06-CW2, AF4
6.337% due 8/25/36(c) 530 516
JPMorgan Mortgage Trust 05-S3,
2A2
5.500% due 1/25/21 655 659
Lehman Brothers - UBS
Commercial Mortgage Trust
06-C6, A4
5.372% due 9/15/39 325 326
Lehman Brothers - UBS
Commercial Mortgage Trust
07-C2, A2
5.303% due 2/15/40 1,230 1,234
Lehman Brothers - UBS
Commercial Mortgage Trust
07-C6, A2
5.845% due 7/15/40 500 510
PAR
VALUE VALUE
(000) (000)
------- --------
MASTR Resecuritization Trust
05-1 144A
5.000% due 10/28/34(b) $ 334 $ 317
Merrill Lynch Mortgage Trust
06-C1, AM
5.659% due 5/12/39(c) 700 705
Morgan Stanley Capital I 06-T23,
A4
5.811% due 8/12/41(c) 790 822
Residential Accredit Loans, Inc.
06-QA1, A21
5.966% due 1/25/36(c) 1,243 1,239
Residential Funding Mortgage
Securities I, Inc. 05-SA1, 2A
4.856% due 3/25/35(c) 773 764
Structured Asset Securities Corp.
03-32, 1A1
5.210% due 11/25/33(c) 588 576
Timberstar Trust 06-1A, A 144A
5.668% due 10/15/36(b) 675 655
Wells Fargo Mortgage Backed
Securities Trust 04-EE, 2A3
3.989% due 12/25/34(c) 561 555
Wells Fargo Mortgage Backed
Securities Trust 05-14, 2A1
5.500% due 12/25/35 1,325 1,296
Wells Fargo Mortgage Backed
Securities Trust 05-5, 1A1
5.000% due 5/25/20 1,176 1,158
Wells Fargo Mortgage Backed
Securities Trust 05-AR10, 2A16
4.109% due 6/25/35(c) 1,000 970
Wells Fargo Mortgage Backed
Securities Trust 05-AR16, 6A3
5.000% due 10/25/35(c) 546 545
Wells Fargo Mortgage Backed
Securities Trust 05-AR4, 2A1
4.524% due 4/25/35(c) 1,343 1,336
Wells Fargo Mortgage Backed
Securities Trust 05-AR4, 2A2
4.524% due 4/25/35(c) 202 200
Wells Fargo Mortgage Backed
Securities Trust 07-AR3, A4
6.067% due 4/25/37(c) 576 569
- ----------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $33,074) 32,983
- ----------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--0.9%
AUSTRALIA--0.1%
Commonwealth of Australia
Series 909
7.500% due 9/15/09 350(g) 310
--------
BRAZIL--0.1%
Federative Republic of Brazil
11.000% due 8/17/40 165 221
--------
CANADA--0.1%
Commonwealth of Canada
4.250% due 9/1/09 295(i) 301
--------
GERMANY--0.0%
Federal Republic of Germany 144A
3.250% due 4/17/09(b) 55(j) 80
--------
See Notes to Financial Statements
68
PHOENIX STRATEGIC ALLOCATION SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
NORWAY--0.1%
Kingdom of Norway
5.500% due 5/15/09 1,900(k) $ 354
--------
PHILIPPINES--0.1%
Republic of Philippines
10.625% due 3/16/25 $ 70 101
7.750% due 1/14/31 120 139
--------
240
--------
RUSSIA--0.1%
Russian Federation RegS
7.500% due 3/31/30(c) (e) 297 339
--------
SWEDEN--0.1%
Kingdom of Sweden Series 1043
5.000% due 1/28/09 980(l) 153
--------
TRINIDAD AND TOBAGO--0.0%
Republic of Trinidad and Tobago
RegS
9.875% due 10/1/09(e) 115 126
--------
TURKEY--0.1%
Republic of Turkey
7.000% due 6/5/20 190 198
--------
UKRAINE--0.1%
Republic of Ukraine 144A
6.580% due 11/21/16(b) 275 270
- ----------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $2,357) 2,592
- ----------------------------------------------------------------------------
FOREIGN CORPORATE BONDS(d)--3.6%
ARUBA--0.1%
UFJ Finance AEC
6.750% due 7/15/13 275 299
--------
AUSTRALIA--0.3%
United Energy Distribution Holdings
Property Ltd. 144A
5.450% due 4/15/16(b) 500 512
Westfield Capital Corp.
Ltd./Westfield Finance
Authority 144A
5.125% due 11/15/14(b) 355 332
--------
844
--------
BRAZIL--0.2%
GTL Trade Finance, Inc. 144A
7.250% due 10/20/17(b) 143 145
Vale Overseas Ltd.
6.250% due 1/11/16 230 231
6.250% due 1/23/17 115 115
--------
491
--------
CANADA--0.3%
Catalyst Paper Corp.
7.375% due 3/1/14 180 137
EnCana Corp.
5.900% due 12/1/17 135 138
PAR
VALUE VALUE
(000) (000)
------- --------
CANADA--CONTINUED
European Investment Bank 144A
4.600% due 1/30/37(b) 325(i) $ 322
Xstrata Canada Corp.
5.500% due 6/15/17 $ 260 252
--------
849
--------
CHILE--0.3%
Banco Santander Chile 144A
5.375% due 12/9/14(b) 300 300
Petropower I Funding Trust 144A
7.360% due 2/15/14(b) 418 418
--------
718
--------
GERMANY--0.4%
Deutsche Bank AG NY Series GS
4.079% due 3/22/12(c) 1,000 999
--------
KAZAKHSTAN--0.1%
Kazkommerts International BV
144A
7.000% due 11/3/09(b) 175 165
--------
LUXEMBOURG--0.0%
Tyco Electronic Group SA 144A
6.000% due 10/1/12(b) 100 103
--------
MEXICO--0.0%
Vitro S.A.B. de C.V.
8.625% due 2/1/12 55 52
--------
PHILIPPINES--0.1%
National Power Corp.
9.625% due 5/15/28 230 279
--------
RUSSIA--0.3%
Gazprom OAO (Gaz Capital SA)
144A(b)
6.212% due 11/22/16 230 220
6.510% due 3/7/22 125 119
OJSC AK Transneft
(TransCapitalInvest Ltd.) 144A
5.670% due 3/5/14(b) 310 297
TNK-BP Finance SA RegS
6.125% due 3/20/12(e) 300 288
--------
924
--------
SINGAPORE--0.2%
DBS Bank Ltd. 144A
5.000% due 11/15/19(b) (c) 525 495
--------
SOUTH KOREA--0.1%
Export-Import Bank of Korea
5.500% due 10/17/12 250 251
--------
SWITZERLAND--0.1%
Petroplus Finance Ltd. 144A
6.750% due 5/1/14(b) 150 140
--------
TURKEY--0.1%
Bosphorus Financial Services Ltd.
144A
6.669% due 2/15/12(b) (c) 400 396
--------
PAR
VALUE VALUE
(000) (000)
------- --------
UNITED ARAB EMIRATES--0.2%
Abu Dhabi National Energy Co.
144A(b)
5.620% due 10/25/12 $ 180 $ 183
5.875% due 10/27/16 305 298
--------
481
--------
UNITED KINGDOM--0.6%
Diageo Capital plc
5.500% due 9/30/16 250 248
HBOS plc 144A
5.375% due 11/29/49(b) (c) 1,000 912
Tate & Lyle International Finance
plc 144A
6.625% due 6/15/16(b) 275 292
Vodafone Group plc
5.000% due 9/15/15 150 145
6.150% due 2/27/37 145 143
--------
1,740
--------
UNITED STATES--0.1%
Nova Chemicals Corp.
7.863% due 11/15/13(c) 195 183
--------
VENEZUELA--0.1%
Petroleos de Venezuela S.A. RegS
5.250% due 4/12/17(e) 375 267
- ----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $9,865) 9,676
- ----------------------------------------------------------------------------
DOMESTIC LOAN AGREEMENTS(c)--1.2%
ADVERTISING--0.0%
Lamar Media Corp. Tranche F
6.646% due 3/31/14 40 40
--------
ALTERNATIVE CARRIERS--0.0%
Level 3 Communications, Inc.
Tranche B
7.493% due 3/13/14 18 17
--------
AUTOMOBILE MANUFACTURERS--0.1%
Ford Motor Co. Tranche B
8.000% due 12/15/13 298 277
--------
AUTOMOTIVE RETAIL--0.1%
Hertz Corp. Letter of Credit
7.110% due 12/21/12 45 44
Hertz Corp. Tranche B
7.110% due 12/21/12 254 249
--------
293
--------
BROADCASTING & CABLE TV--0.1%
Charter Communications Operating
LLC Tranche B
7.060% due 3/6/14 275 257
--------
DATA PROCESSING & OUTSOURCED SERVICES--0.1%
First Data Corp. Tranche B3
7.710% due 9/24/14 400 381
--------
DIVERSIFIED METALS & MINING--0.1%
Compass Minerals Group, Inc.
Tranche B
6.687% due 12/22/12 171 167
--------
See Notes to Financial Statements
69
PHOENIX STRATEGIC ALLOCATION SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
ELECTRIC UTILITIES--0.0%
Energy Future Holdings Tranche B2
8.645% due 10/10/14 $ 73 $ 72
--------
ENVIRONMENTAL & FACILITIES SERVICES--0.1%
Allied Waste North America, Inc.
Letter of Credit A
6.621% due 3/28/14 131 126
Allied Waste North America, Inc.
Tranche B
6.390% due 3/28/14 220 211
--------
337
--------
HEALTH CARE FACILITIES--0.0%
Health Management Associates, Inc.
Tranche B
6.800% due 2/28/14 40 37
--------
HOUSEWARES & SPECIALTIES--0.1%
Yankee Candle Co., Inc. Tranche B
8.891% due 2/6/14 200 188
--------
OIL & GAS DRILLING--0.0%
Hercules Offshore, Inc. Tranche
7.110% due 7/11/13 60 58
--------
OIL & GAS EQUIPMENT & SERVICES--0.0%
Helix Energy Solutions Group, Inc.
Tranche
8.360% due 7/1/13 67 64
--------
PAPER PRODUCTS--0.1%
Georgia-Pacific Corp. Tranche B1
7.150% due 12/20/12 299 286
--------
PUBLISHING--0.1%
Idearc, Inc. Tranche B
7.360% due 11/17/14 299 286
--------
RESTAURANTS--0.1%
Burger King Corp. Tranche B1
6.750% due 6/30/12 121 119
--------
SPECIALIZED FINANCE--0.1%
Solar Capital Corp. Tranche US
8.818% due 2/28/14 299 290
--------
WIRELESS TELECOMMUNICATION SERVICES--0.1%
ALLTEL Communications, Inc.
Tranche B3
9.029% due 5/15/15 160 154
- ----------------------------------------------------------------------------
TOTAL DOMESTIC LOAN AGREEMENTS
(IDENTIFIED COST $3,409) 3,323
- ----------------------------------------------------------------------------
FOREIGN LOAN AGREEMENTS(c)--0.0%
UNITED STATES--0.0%
Bausch & Lomb, Inc. Tranche
8.127% due 10/26/15 24(j) 35
- ----------------------------------------------------------------------------
TOTAL FOREIGN LOAN AGREEMENTS
(IDENTIFIED COST $34) 35
- ----------------------------------------------------------------------------
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--56.8%
AEROSPACE & DEFENSE--3.0%
Boeing Co. (The) 20,100 $ 1,758
General Dynamics Corp. 4,700 418
Honeywell International,
Inc. 16,700 1,028
Lockheed Martin Corp. 12,900 1,358
Northrop Grumman Corp. 8,000 629
Raytheon Co. 8,900 540
United Technologies Corp. 30,700 2,350
--------
8,081
--------
AIR FREIGHT & LOGISTICS--0.1%
United Parcel Service, Inc.
Class B 5,100 361
--------
AIRLINES--0.1%
AMR Corp.(f) 10,500 147
Continental Airlines, Inc.
Class B(f) 3,600 80
--------
227
--------
APPAREL RETAIL--0.3%
Aeropostale, Inc.(f) 6,650 177
Gap, Inc. (The) 23,600 502
Men's Wearhouse, Inc.
(The) 4,300 116
--------
795
--------
APPAREL, ACCESSORIES & LUXURY GOODS--0.1%
VF Corp. 5,000 343
--------
APPLICATION SOFTWARE--0.1%
Aspen Technology, Inc.(f) 16,800 273
--------
ASSET MANAGEMENT & CUSTODY BANKS--2.0%
Ameriprise Financial, Inc. 4,000 221
Bank of New York Mellon Corp.
(The) 25,157 1,227
Federated Investors, Inc.
Class B 8,600 354
Franklin Resources, Inc. 5,000 572
Legg Mason, Inc. 6,400 468
Northern Trust Corp. 10,500 804
SEI Investments Co. 12,600 405
State Street Corp. 15,100 1,226
--------
5,277
--------
AUTO PARTS & EQUIPMENT--0.2%
American Axle & Manufacturing
Holdings, Inc. 5,300 99
Lear Corp.(f) 17,300 478
--------
577
--------
AUTOMOBILE MANUFACTURERS--0.1%
Thor Industries, Inc. 4,800 183
--------
BIOTECHNOLOGY--0.4%
Cephalon, Inc.(f) 2,000 144
OSI Pharmaceuticals, Inc.(f) 17,800 863
--------
1,007
--------
VALUE
SHARES (000)
------- --------
BREWERS--0.4%
Anheuser-Busch Cos., Inc. 20,300 $ 1,063
--------
BROADCASTING & CABLE TV--0.4%
CBS Corp. Class B 35,310 962
--------
BUILDING PRODUCTS--0.1%
Masco Corp. 15,600 337
--------
COAL & CONSUMABLE FUELS--0.2%
Massey Energy Co. 18,400 658
--------
COMMERCIAL PRINTING--0.2%
RR Donnelley & Sons Co. 12,700 479
--------
COMMUNICATIONS EQUIPMENT--1.0%
Cisco Systems, Inc.(f) 101,700 2,753
--------
COMPUTER & ELECTRONICS RETAIL--0.1%
RadioShack Corp. 11,900 201
--------
COMPUTER HARDWARE--2.3%
Hewlett-Packard Co. 52,650 2,658
International Business Machines
Corp. 32,300 3,491
NCR Corp.(f) 3,100 78
--------
6,227
--------
COMPUTER STORAGE & PERIPHERALS--0.3%
Emulex Corp.(f) 18,400 300
Network Appliance, Inc.(f) 10,100 252
QLogic Corp.(f) 10,100 144
--------
696
--------
CONSTRUCTION & ENGINEERING--0.0%
Perini Corp.(f) 1,700 70
--------
CONSTRUCTION & FARM MACHINERY &
HEAVY TRUCKS--0.4%
AGCO Corp.(f) 7,200 489
Cummins, Inc. 1,200 153
Toro Co. (The) 6,700 365
--------
1,007
--------
DATA PROCESSING & OUTSOURCED SERVICES--0.8%
Automatic Data Processing,
Inc. 15,000 668
Computer Sciences Corp.(f) 7,900 391
Electronic Data Systems
Corp. 23,300 483
Fiserv, Inc.(f) 13,200 732
--------
2,274
--------
DIVERSIFIED BANKS--0.7%
Comerica, Inc. 6,100 266
Wells Fargo & Co. 55,400 1,672
--------
1,938
--------
DIVERSIFIED CHEMICALS--0.5%
Dow Chemical Co. (The) 12,700 501
du Pont (E.I.) de Nemours &
Co. 20,200 890
--------
1,391
--------
See Notes to Financial Statements
70
PHOENIX STRATEGIC ALLOCATION SERIES
VALUE
SHARES (000)
------- --------
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES--0.2%
Dun & Bradstreet Corp. 4,500 $ 399
--------
DIVERSIFIED METALS & MINING--0.3%
Freeport-McMoRan Copper &
Gold, Inc. (Indonesia)(d) 2,800 287
Southern Copper Corp. 4,300 452
--------
739
--------
ELECTRIC UTILITIES--0.7%
FirstEnergy Corp. 26,200 1,895
--------
ELECTRICAL COMPONENTS & EQUIPMENT--0.6%
Emerson Electric Co. 27,600 1,564
GrafTech International
Ltd.(f) 6,100 108
--------
1,672
--------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.3%
Agilent Technologies, Inc.(f) 18,300 672
--------
ELECTRONIC MANUFACTURING SERVICES--0.2%
Tyco Electronics Ltd. 15,500 576
--------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.0%
Terra Industries, Inc.(f) 2,400 115
--------
FOOD RETAIL--0.3%
Kroger Co. (The) 17,500 467
SUPERVALU, Inc. 6,500 244
--------
711
--------
FOOTWEAR--0.4%
NIKE, Inc. Class B 14,900 957
--------
GENERAL MERCHANDISE STORES--0.1%
Big Lots, Inc.(f) 10,700 171
Family Dollar Stores, Inc. 10,100 194
--------
365
--------
HEALTH CARE DISTRIBUTORS--0.6%
Cardinal Health, Inc. 12,100 699
McKesson Corp. 15,500 1,015
--------
1,714
--------
HEALTH CARE EQUIPMENT--0.3%
Baxter International, Inc. 15,100 877
--------
HEALTH CARE SERVICES--0.1%
Medco Health Solutions,
Inc.(f) 3,800 385
--------
HOME IMPROVEMENT RETAIL--0.4%
Sherwin-Williams Co.
(The) 17,000 987
--------
HOUSEHOLD APPLIANCES--0.2%
Stanley Works (The) 5,700 276
Whirlpool Corp. 3,100 253
--------
529
--------
VALUE
SHARES (000)
------- --------
HOUSEHOLD PRODUCTS--0.7%
Clorox Co. (The) 14,300 $ 932
Kimberly-Clark Corp. 5,500 381
Procter & Gamble Co.
(The) 8,700 639
--------
1,952
--------
HOUSEWARES & SPECIALTIES--0.2%
American Greetings Corp.
Class A 6,000 122
Newell Rubbermaid, Inc. 12,600 326
--------
448
--------
HYPERMARKETS & SUPER CENTERS--0.4%
BJ's Wholesale Club, Inc.(f) 8,200 277
Wal-Mart Stores, Inc. 17,900 851
--------
1,128
--------
INDUSTRIAL CONGLOMERATES--0.5%
Teleflex, Inc. 3,400 215
Tyco International Ltd. 28,000 1,110
--------
1,325
--------
INDUSTRIAL MACHINERY--0.9%
Dover Corp. 3,900 180
Eaton Corp. 13,200 1,280
Gardner Denver, Inc.(f) 5,000 165
Parker Hannifin Corp. 8,950 674
--------
2,299
--------
INSURANCE BROKERS--0.2%
AON Corp. 11,300 539
--------
INTEGRATED OIL & GAS--5.3%
Chevron Corp. 14,200 1,325
ConocoPhillips 19,100 1,687
Exxon Mobil Corp. 75,800 7,102
Marathon Oil Corp. 8,500 517
Occidental Petroleum
Corp. 49,400 3,803
--------
14,434
--------
INTEGRATED TELECOMMUNICATION SERVICES--2.2%
AT&T, Inc. 100,457 4,175
Qwest Communications
International, Inc.(f) 39,600 277
Verizon Communications,
Inc. 21,100 922
Windstream Corp. 47,600 620
--------
5,994
--------
INTERNET RETAIL--0.2%
Expedia, Inc.(f) 4,700 148
IAC/InterActiveCorp.(f) 9,500 256
--------
404
--------
INTERNET SOFTWARE & SERVICES--0.4%
eBay, Inc.(f) 30,300 1,006
--------
VALUE
SHARES (000)
------- --------
INVESTMENT BANKING & BROKERAGE--0.7%
Charles Schwab Corp.
(The) 15,400 $ 394
Goldman Sachs Group, Inc.
(The) 5,600 1,204
TD Ameritrade Holding
Corp.(f) 16,700 335
--------
1,933
--------
LEISURE PRODUCTS--0.0%
Hasbro, Inc. 5,000 128
--------
LIFE & HEALTH INSURANCE--2.3%
AFLAC, Inc. 11,900 745
Lincoln National Corp. 15,100 879
MetLife, Inc. 33,500 2,064
Principal Financial Group,
Inc. (The) 13,200 909
Prudential Financial, Inc. 15,300 1,424
StanCorp Financial Group,
Inc. 2,800 141
Unum Group 4,900 117
--------
6,279
--------
LIFE SCIENCES TOOLS & SERVICES--0.1%
Invitrogen Corp.(f) 3,800 355
--------
MANAGED HEALTH CARE--1.7%
Aetna, Inc. 18,400 1,062
CIGNA Corp. 11,900 639
Coventry Health Care,
Inc.(f) 2,900 172
UnitedHealth Group, Inc. 29,650 1,726
WellPoint, Inc.(f) 11,900 1,044
--------
4,643
--------
METAL & GLASS CONTAINERS--0.1%
Ball Corp. 3,200 144
Owens-Illinois, Inc.(f) 4,500 223
--------
367
--------
MORTGAGE REITS--0.3%
Annaly Capital Management,
Inc. 39,900 725
CapitalSource, Inc. 5,200 92
--------
817
--------
MOVIES & ENTERTAINMENT--1.6%
Time Warner, Inc. 76,200 1,258
Viacom, Inc. Class B(f) 34,400 1,511
Walt Disney Co. (The) 52,100 1,682
--------
4,451
--------
MULTI-LINE INSURANCE--1.1%
American International Group,
Inc. 45,700 2,664
Hartford Financial Services Group,
Inc. (The) 2,500 218
--------
2,882
--------
See Notes to Financial Statements
71
PHOENIX STRATEGIC ALLOCATION SERIES
VALUE
SHARES (000)
------- --------
MULTI-UTILITIES--0.5%
Public Service Enterprise Group,
Inc. 13,500 $ 1,326
--------
OFFICE ELECTRONICS--0.0%
Xerox Corp. 7,500 121
--------
OIL & GAS DRILLING--0.5%
ENSCO International, Inc. 3,200 191
Transocean, Inc. 7,500 1,073
--------
1,264
--------
OIL & GAS EQUIPMENT & SERVICES--0.7%
Dresser-Rand Group, Inc.(f) 6,800 266
National Oilwell Varco,
Inc.(f) 15,300 1,124
Tidewater, Inc. 7,200 395
--------
1,785
--------
OIL & GAS EXPLORATION & PRODUCTION--0.2%
Devon Energy Corp. 1,500 133
Noble Energy, Inc. 1,800 143
W&T Offshore, Inc. 10,700 321
--------
597
--------
OIL & GAS REFINING & MARKETING--0.3%
Holly Corp. 3,300 168
Valero Energy Corp. 8,400 588
--------
756
--------
OTHER DIVERSIFIED FINANCIAL SERVICES--2.9%
Bank of America Corp. 93,600 3,862
Citigroup, Inc. 9,600 283
JPMorgan Chase & Co. 84,800 3,701
--------
7,846
--------
PACKAGED FOODS & MEATS--0.2%
General Mills, Inc. 9,600 547
--------
PAPER PACKAGING--0.1%
Packaging Corporation of
America 13,100 369
--------
PERSONAL PRODUCTS--0.2%
NBTY, Inc.(f) 17,800 488
--------
PHARMACEUTICALS--4.0%
Abbott Laboratories 7,000 393
Bristol-Myers Squibb Co. 13,300 353
Endo Pharmaceuticals
Holdings, Inc.(f) 8,300 221
Forest Laboratories, Inc.(f) 13,200 481
Johnson & Johnson 52,100 3,475
Merck & Co., Inc. 52,300 3,039
Pfizer, Inc. 115,900 2,634
Wyeth 8,000 354
--------
10,950
--------
VALUE
SHARES (000)
------- --------
PHOTOGRAPHIC PRODUCTS--0.1%
Eastman Kodak Co. 9,700 $ 212
--------
PROPERTY & CASUALTY INSURANCE--0.8%
Chubb Corp. (The) 5,900 322
Cincinnati Financial Corp. 5,400 214
Philadelphia Consolidated
Holding Co.(f) 3,200 126
Travelers Cos., Inc. (The) 27,400 1,474
--------
2,136
--------
RAILROADS--0.1%
Norfolk Southern Corp. 7,100 358
--------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.0%
Jones Lang LaSalle, Inc. 1,000 71
--------
REGIONAL BANKS--0.3%
Bank of Hawaii Corp. 1,900 97
KeyCorp 12,200 286
Regions Financial Corp. 14,500 343
SunTrust Banks, Inc. 3,100 194
--------
920
--------
RESTAURANTS--1.1%
McDonald's Corp. 36,000 2,121
Yum! Brands, Inc. 22,900 876
--------
2,997
--------
SEMICONDUCTOR EQUIPMENT--0.6%
Applied Materials, Inc. 43,400 771
Lam Research Corp.(f) 4,600 199
MEMC Electronic Materials,
Inc.(f) 3,600 319
Novellus Systems, Inc.(f) 13,000 358
--------
1,647
--------
SEMICONDUCTORS--1.2%
Amkor Technology, Inc.(f) 15,400 131
Integrated Device Technology,
Inc.(f) 21,800 246
Intel Corp. 48,000 1,280
NVIDIA Corp.(f) 16,950 577
Texas Instruments, Inc. 29,300 979
--------
3,213
--------
SOFT DRINKS--0.9%
Coca-Cola Co. (The) 22,500 1,381
Pepsi Bottling Group, Inc.
(The) 28,900 1,140
--------
2,521
--------
SPECIALIZED REITS--0.2%
FelCor Lodging Trust, Inc. 14,600 228
Host Hotels & Resorts,
Inc. 12,300 209
--------
437
--------
VALUE
SHARES (000)
------- --------
SPECIALTY CHEMICALS--0.1%
H.B. Fuller Co. 7,800 $ 175
--------
STEEL--0.2%
AK Steel Holding Corp.(f) 11,000 509
--------
SYSTEMS SOFTWARE--3.0%
BMC Software, Inc.(f) 8,800 314
McAfee, Inc.(f) 4,100 154
Microsoft Corp. 147,700 5,258
Oracle Corp.(f) 75,800 1,711
Symantec Corp.(f) 39,200 633
--------
8,070
--------
TECHNOLOGY DISTRIBUTORS--0.0%
Arrow Electronics, Inc.(f) 2,600 102
--------
TOBACCO--1.0%
Altria Group, Inc. 15,060 1,138
Loews Corp. - Carolina
Group 14,500 1,237
Reynolds American, Inc. 2,400 158
Universal Corp. 4,700 241
--------
2,774
--------
WIRELESS TELECOMMUNICATION SERVICES--0.2%
Sprint Nextel Corp. 40,900 537
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $125,883) 153,885
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS(d)--0.6%
COMPUTER STORAGE & PERIPHERALS--0.1%
Seagate Technology
(Singapore) 15,100 385
--------
INDUSTRIAL MACHINERY--0.1%
Ingersoll-Rand Co., Ltd.
Class A (United States) 3,400 158
--------
IT CONSULTING & OTHER SERVICES--0.3%
Accenture Ltd. Class A
(United States) 23,300 840
--------
PROPERTY & CASUALTY INSURANCE--0.1%
XL Capital Ltd. Class A
(United States) 6,600 332
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $1,980) 1,715
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--98.5%
(IDENTIFIED COST $239,195) 266,656
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--1.3%
MONEY MARKET MUTUAL FUNDS--0.1%
State Street Navigator Prime Plus
(4.88% seven-day effective
yield)(n) 174 174
--------
See Notes to Financial Statements
72
PHOENIX STRATEGIC ALLOCATION SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
COMMERCIAL PAPER(o)--1.2%
Eaton Corp.
4.250% due 1/2/08 $ 2,420 $ 2,420
Archer-Daniels-Midland Co.
4.380% due 1/31/08 1,000 996
--------
3,416
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $3,590) 3,590
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.8%
(IDENTIFIED COST $242,785) 270,246(a)
Other assets and liabilities, net--0.2% 407
--------
NET ASSETS--100.0% $270,653
========
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$34,305 and gross depreciation of $7,128 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $243,069.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
2007, these securities amounted to a value of $13,178 (reported in 000's) or
4.9% of net assets.
(c) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(d) A security is considered to be foreign if the security is issued in a
foreign country. The country of risk, noted in the header, or
parenthetically, is determined based on criteria described in Note 2G,
"Foreign security country determination" in the Notes to Financial
Statements.
(e) Regulation S security. Security is offered and sold outside of the United
States, therefore, it is exempt from registration with the SEC under rules
903 and 904 of the Securities Act of 1933.
(f) Non-income producing.
(g) Par value represents Australian Dollar.
(h) Par value represents Brazilian Real.
(i) Par value represents Canadian Dollar.
(j) Par value represents Euro.
(k) Par value represents Norwegian Krone.
(l) Par value represents Swedish Krona.
(m) All or a portion of security is on loan.
(n) Represents security purchased with cash collateral received for securities
on loan.
(o) The rate shown is the discount rate.
See Notes to Financial Statements
73
PHOENIX-ABERDEEN INTERNATIONAL SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31 2007
VALUE
SHARES (000)
------- --------
FOREIGN COMMON STOCKS(b)--94.5%
ARGENTINA--2.0%
Tenaris S.A. ADR (Oil & Gas
Equipment & Services) 227,500 $ 10,176
--------
BELGIUM--3.5%
Belgacom SA (Integrated
Telecommunication
Services) 351,000 17,294
--------
BRAZIL--4.3%
Petroleo Brasileiro S.A. ADR
(Integrated Oil & Gas) 224,900 21,640
--------
FRANCE--1.3%
PSA Peugeot Citroen
SA (Automobile
Manufacturers)(c) 88,300 6,691
--------
GERMANY--12.3%
adidas AG (Apparel, Accessories
& Luxury Goods) 148,100 11,012
Commerzbank AG (Diversified
Banks) 260,900 9,926
Deutsche Post AG Registered
Shares (Air Freight &
Logistics) 189,100 6,493
Deutsche Postbank AG
(Diversified Banks) 144,800 12,883
E.ON AG (Electric Utilities) 100,300 21,323
--------
61,637
--------
HONG KONG--5.3%
CLP Holdings Ltd. (Electric
Utilities) 1,485,000 10,089
Swire Pacific Ltd. Class B
(Multi-Sector Holdings) 6,305,000 16,658
--------
26,747
--------
INDIA--1.0%
ICICI Bank Ltd. Sponsored
ADR (Diversified Banks) 82,700 5,086
--------
ITALY--5.5%
ENI S.p.A. (Integrated Oil &
Gas) 405,600 14,803
Intesa Sanpaolo S.p.A.
(Diversified Banks) 1,618,000 12,733
--------
27,536
--------
JAPAN--16.8%
Bank of Kyoto Ltd. (The)
(Regional Banks)(c) 372,000 4,401
Canon, Inc.
(Office Electronics) 299,250 13,696
Daito Trust Construction Co.
Ltd. (Homebuilding) 288,500 15,828
VALUE
SHARES (000)
------- --------
JAPAN--CONTINUED
Mitsubishi UFJ Financial
Group, Inc. (Diversified
Banks) 1,036,900 $ 9,778
ORIX Corp. (Consumer
Finance) 47,800 8,039
Seven and I Holdings Co.,
Ltd. (Food Retail) 267,000 7,757
Takeda Pharmaceutical Co.,
Ltd. (Pharmaceuticals) 214,600 12,537
Toyota Motor Corp.
(Automobile
Manufacturers) 229,300 12,212
--------
84,248
--------
MEXICO--2.4%
Grupo Aeroportuario del
Sureste S.A. de C.V. ADR
(Airport Services) 194,500 11,907
--------
NETHERLANDS--1.5%
Koninklijke Philips
Electronics N.V.
(Industrial
Conglomerates) 176,700 7,572
--------
PORTUGAL--2.5%
Portugal Telecom SGPS S.A.
(Integrated Telecommunication
Services) 949,000 12,447
--------
SINGAPORE--2.4%
Oversea-Chinese Banking
Corp., Ltd. (Diversified
Banks) 2,127,800 12,127
--------
SPAIN--2.0%
Corporacion Mapfre SA
(Multi-line Insurance) 2,246,600 9,857
--------
SWEDEN--3.9%
Nordea Bank AB (Diversified
Banks) 613,200 10,276
Telefonaktiebolaget LM
Ericsson Class B
(Communications
Equipment) 3,888,700 9,102
--------
19,378
--------
SWITZERLAND--5.6%
Nestle S.A. Registered Shares
(Packaged Foods &
Meats) 17,675 8,116
Zurich Financial Services AG
Registered Shares (Multi-line
Insurance) 68,050 19,972
--------
28,088
--------
VALUE
SHARES (000)
------- --------
TAIWAN--2.5%
Taiwan Semiconductor
Manufacturing Co., Ltd.
Sponsored ADR
(Semiconductors) 1,269,432 $ 12,644
--------
UNITED KINGDOM--19.7%
AstraZeneca plc
(Pharmaceuticals) 219,500 9,448
British American Tobacco
plc (Tobacco) 248,400 9,711
Centrica plc
(Multi-Utilities) 2,017,500 14,371
Morrison (WM)
Supermarkets plc
(Food Retail) 1,267,600 8,099
Premier Foods plc
(Packaged Foods &
Meats) 3,512,100 14,348
Resolution plc (Life &
Health Insurance) 695,300 9,842
Vodafone Group plc
(Wireless
Telecommunication
Services) 4,116,430 15,453
Weir Group plc (The)
(Industrial Machinery) 621,200 9,986
Wolseley plc (Trading
Companies &
Distributors) 524,300 7,708
--------
98,966
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $367,739) 474,041
- ----------------------------------------------------------------------------
FOREIGN PREFERRED STOCKS(b)--2.9%
SOUTH KOREA--2.9%
Samsung Electronics Co.,
Ltd. Pfd. 1.10%
(Semiconductors) 32,300 14,655
- ----------------------------------------------------------------------------
TOTAL FOREIGN PREFERRED STOCKS
(IDENTIFIED COST $11,881) 14,655
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--97.4%
(IDENTIFIED COST $379,620) 488,696
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--3.2%
MONEY MARKET MUTUAL FUNDS--0.3%
State Street Navigator
Prime Plus (4.88%
seven-day effective
yield)(d) 1,385,870 1,386
--------
See Notes to Financial Statements
74
PHOENIX-ABERDEEN INTERNATIONAL SERIES
PAR
VALUE VALUE
(000) (000)
------- --------
COMMERCIAL PAPER(e)--2.9%
Nicor, Inc.
4.000% due 1/2/08 $ 3,845 $ 3,844
Praxair, Inc.
3.600% due 1/2/08 10,985 10,984
--------
14,828
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $16,214) 16,214
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.6%
(IDENTIFIED COST $395,834) 504,910(a)
Other assets and liabilities, net--(0.6)% (2,997)
--------
NET ASSETS--100.0% $501,913
========
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$123,054 and gross depreciation of $14,936 for federal income tax purposes.
At December 31, 2007, the aggregate cost of securities for federal income
tax purposes was $396,792.
(b) 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.
(c) All or a portion of security is on loan.
(d) Represents security purchased with cash collateral received for securities
on loan.
(e) The rate shown is the discount rate.
See Notes to Financial Statements
75
PHOENIX-ALGER SMALL-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--94.8%
AEROSPACE & DEFENSE--2.7%
BE Aerospace, Inc.(b) 14,880 $ 787
Esterline Technologies
Corp.(b) 13,690 709
-------
1,496
-------
AIR FREIGHT & LOGISTICS--0.2%
Pacer International, Inc. 6,500 95
-------
AIRLINES--0.5%
AirTran Holdings, Inc.(b) 42,270 303
-------
ALTERNATIVE CARRIERS--0.5%
Time Warner Telecom, Inc.
Class A(b) 13,275 269
-------
APPAREL RETAIL--1.6%
AnnTaylor Stores Corp.(b) 12,070 309
Bebe Stores, Inc. 26,850 345
DSW, Inc. Class A(b) 11,740 220
-------
874
-------
APPAREL, ACCESSORIES & LUXURY GOODS--1.3%
Carter's, Inc.(b) 16,915 327
Phillips-Van Heusen Corp. 10,730 396
-------
723
-------
APPLICATION SOFTWARE--5.8%
ANSYS, Inc.(b) 20,220 838
Concur Technologies,
Inc.(b) 12,670 459
Solera Holdings, Inc.(b) 32,725 811
Synchronoss Technologies,
Inc.(b) 15,240 540
Taleo Corp. Class A(b) 11,265 335
TIBCO Software, Inc.(b) 32,065 259
-------
3,242
-------
ASSET MANAGEMENT & CUSTODY BANKS--0.8%
American Capital Strategies
Ltd. 2,985 98
Cohen & Steers, Inc. 10,875 326
-------
424
-------
AUTO PARTS & EQUIPMENT--0.6%
Tenneco, Inc.(b) 13,530 353
-------
BIOTECHNOLOGY--7.6%
Acorda Therapeutics, Inc.(b) 23,030 506
BioMarin Pharmaceutical,
Inc.(b) 14,695 520
Cubist Pharmaceuticals,
Inc.(b) 13,645 280
InterMune, Inc.(b) 14,110 188
Omrix Biopharmaceuticals,
Inc.(b) 17,050 592
Onyx Pharmaceuticals,
Inc.(b) 10,670 593
VALUE
SHARES (000)
------- --------
BIOTECHNOLOGY--CONTINUED
Progenics Pharmaceuticals,
Inc.(b) 19,445 $ 351
Savient Pharmaceuticals,
Inc.(b) 24,360 560
United Therapeutics
Corp.(b) 6,765 661
-------
4,251
-------
CASINOS & GAMING--1.3%
Bally Technologies, Inc.(b) 14,530 722
-------
COMMUNICATIONS EQUIPMENT--3.7%
Acme Packet, Inc.(b) 33,400 420
Foundry Networks, Inc.(b) 26,860 471
Polycom, Inc.(b) 24,835 690
Sonus Networks, Inc. 83,455 486
-------
2,067
-------
COMPUTER HARDWARE--0.2%
Avid Technology, Inc.(b) 4,790 136
-------
COMPUTER STORAGE & PERIPHERALS--1.5%
Novatel Wireless, Inc.(b) 23,955 388
Synaptics, Inc.(b) 11,335 467
-------
855
-------
CONSTRUCTION & ENGINEERING--2.3%
Aecom Technology Corp.(b) 22,835 652
URS Corp.(b) 12,015 653
-------
1,305
-------
CONSTRUCTION & FARM MACHINERY & HEAVY
TRUCKS--1.4%
Bucyrus International, Inc.
Class A 7,750 770
-------
DATA PROCESSING & OUTSOURCED SERVICES--3.4%
Heartland Payment Systems,
Inc. 18,085 485
NeuStar, Inc. Class A(b) 17,475 501
VeriFone Holdings, Inc.(b) 14,920 347
Wright Express Corp.(b) 16,015 568
-------
1,901
-------
DISTILLERS & VINTNERS--0.8%
Central European Distribution
Corp.(b) 7,285 423
-------
DISTRIBUTORS--1.3%
LKQ Corp.(b) 35,090 738
-------
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES--3.9%
Corporate Executive Board Co.
(The) 2,875 173
FTI Consulting, Inc.(b) 14,305 882
GEO Group, Inc. (The)(b) 25,865 724
VALUE
SHARES (000)
------- --------
DIVERSIFIED COMMERCIAL & PROFESSIONAL
SERVICES--CONTINUED
TeleTech Holdings, Inc.(b) 19,195 $ 408
-------
2,187
-------
DIVERSIFIED METALS & MINING--1.5%
RTI International Metals,
Inc.(b) 4,925 339
Thompson Creek Metals Co.,
Inc.(b) 30,015 514
-------
853
-------
ELECTRIC UTILITIES--1.6%
ITC Holdings Corp. 15,470 873
-------
ELECTRICAL COMPONENTS & EQUIPMENT--1.1%
JA Solar Holdings Co. Ltd.
ADR(b) 8,520 595
-------
FOOTWEAR--2.4%
Deckers Outdoor Corp.(b) 4,510 699
Iconix Brand Group, Inc.(b) 33,605 661
-------
1,360
-------
HEALTH CARE EQUIPMENT--3.3%
ArthroCare Corp.(b) 10,070 484
DexCom, Inc.(b) 14,785 130
Hologic, Inc.(b) 10,980 754
Thoratec Corp.(b) 27,173 494
-------
1,862
-------
HEALTH CARE FACILITIES--0.8%
Psychiatric Solutions,
Inc.(b) 14,340 466
-------
HEALTH CARE SERVICES--0.9%
Landauer, Inc. 9,500 493
-------
HEALTH CARE SUPPLIES--1.4%
Immucor, Inc.(b) 5,545 188
Inverness Medical Innovations,
Inc.(b) 10,245 576
-------
764
-------
HEALTH CARE TECHNOLOGY--0.6%
Allscripts Healthcare Solutions,
Inc. 17,265 335
-------
HUMAN RESOURCES & EMPLOYMENT SERVICES--0.3%
Resources Connection,
Inc. 10,000 182
-------
INDUSTRIAL MACHINERY--3.6%
Actuant Corp. Class A 19,320 657
CLARCOR, Inc. 15,770 599
RBC Bearings, Inc.(b) 17,040 740
-------
1,996
-------
See Notes to Financial Statements
76
PHOENIX-ALGER SMALL-CAP GROWTH SERIES
VALUE
SHARES (000)
------- --------
INTERNET RETAIL--2.4%
GSI Commerce, (R) Inc.(b) 29,044 $ 567
priceline.com, Inc.(b) 6,550 752
-------
1,319
-------
INTERNET SOFTWARE & SERVICES--3.9%
Autobytel, Inc.(b) 60,530 167
Autobytel, Inc.(b)(d) 3,757 10
DealerTrack Holdings,
Inc.(b) 15,460 517
Digital River, Inc.(b) 8,045 266
Internap Network Services
Corp. 25,080 209
j2 Global Communications,
Inc.(b) 4,785 101
Omniture, Inc.(b) 12,935 431
VistaPrint Ltd.(b) 11,175 479
-------
2,180
-------
INVESTMENT BANKING & BROKERAGE--1.6%
GFI Group, Inc.(b) 2,875 275
Greenhill & Co., Inc. 9,020 600
-------
875
-------
IT CONSULTING & OTHER SERVICES--0.5%
SI International, Inc.(b) 9,010 247
-------
LEISURE FACILITIES--1.2%
Life Time Fitness, Inc.(b) 12,920 642
-------
LIFE SCIENCES TOOLS & SERVICES--3.0%
Illumina, Inc.(b) 11,915 706
Nektar Therapeutics(b) 29,690 199
Parexel International
Corp.(b) 15,805 764
-------
1,669
-------
METAL & GLASS CONTAINERS--1.2%
Silgan Holdings, Inc. 12,800 665
-------
OIL & GAS EQUIPMENT & SERVICES--2.4%
Cal Dive International,
Inc.(b) 27,316 362
Dril-Quip, Inc.(b) 11,475 639
T-3 Energy Services, Inc.(b) 7,050 331
-------
1,332
-------
OIL & GAS EXPLORATION & PRODUCTION--2.9%
Carrizo Oil & Gas, Inc.(b) 8,915 488
Concho Resources, Inc.(b) 27,685 571
Mariner Energy, Inc.(b) 23,475 537
-------
1,596
-------
VALUE
SHARES (000)
------- --------
OIL & GAS REFINING & MARKETING--0.8%
CVR Energy, Inc.(b) 18,035 $ 450
-------
PACKAGED FOODS & MEATS--1.3%
Hain Celestial Group, Inc.
(The)(b) 22,310 714
-------
PHARMACEUTICALS--1.1%
Adams Respiratory
Therapeutics, Inc.(b) 10,650 636
-------
PROPERTY & CASUALTY INSURANCE--1.1%
First Mercury Financial
Corp.(b) 26,130 637
-------
REGIONAL BANKS--2.6%
Boston Private Financial
Holdings, Inc. 18,515 502
First Midwest Bancorp,
Inc. 12,820 392
Signature Bank(b) 9,545 322
Wintrust Financial Corp. 7,060 234
-------
1,450
-------
RESTAURANTS--0.4%
McCormick & Schmick's Seafood
Restaurants, Inc.(b) 20,225 241
-------
SEMICONDUCTOR EQUIPMENT--2.0%
FormFactor, Inc.(b) 12,390 410
Tessera Technologies,
Inc.(b) 17,085 711
-------
1,121
-------
SEMICONDUCTORS--2.9%
Atheros Communications,
Inc.(b) 19,375 592
ON Semiconductor Corp.(b) 62,740 557
SiRF Technology Holdings,
Inc. 19,545 491
-------
1,640
-------
SPECIALIZED CONSUMER SERVICES--0.7%
Matthews International Corp.
Class A 7,700 361
-------
SPECIALTY CHEMICALS--1.6%
Balchem Corp. 14,100 315
Zoltek Cos., Inc.(b) 13,125 563
-------
878
-------
VALUE
SHARES (000)
------- --------
THRIFTS & MORTGAGE FINANCE--1.0%
FirstFed Financial Corp.(b) 6,270 $ 225
Washington Federal, Inc. 16,550 349
-------
574
-------
WIRELESS TELECOMMUNICATION SERVICES--1.3%
SBA Communications Corp.
Class A(b) 20,905 707
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $41,730) 52,847
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS(c)--4.7%
COAL & CONSUMABLE FUELS--0.5%
Uranium One, Inc.
(Canada)(b) 31,380 277
-------
COMMUNICATIONS EQUIPMENT--1.2%
NICE Systems Ltd. - Sponsored
ADR (Israel)(b) 19,285 662
-------
HOTELS, RESORTS & CRUISE LINES--0.6%
Orient-Express Hotel Ltd. Class A
(Bermuda) 5,554 319
-------
OIL & GAS EXPLORATION & PRODUCTION--1.4%
Petrobank Energy & Resources Ltd.
(Canada)(b) 13,490 796
-------
TECHNOLOGY DISTRIBUTORS--1.0%
Mellanox Technologies Ltd.
(Israel)(b) 31,726 578
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $1,869) 2,632
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--99.5%
(IDENTIFIED COST $43,599) 55,479
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--0.7%
PAR
VALUE
(000)
-------
FEDERAL AGENCY SECURITIES(e)--0.7%
FHLB
3.900% due 1/3/08 $ 300 300
3.900% due 1/11/08 100 100
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $400) 400
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.2%
(IDENTIFIED COST $43,999) 55,879(a)
Other assets and liabilities, net--(0.2)% (111)
-------
NET ASSETS--100.0% $55,768
=======
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$14,562 and gross depreciation of $2,867 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $44,184.
(b) Non-income producing.
(c) A security is considered to be foreign if the security is issued in a
foreign country. The country of risk, noted parenthetically, is determined
based on criteria described in Note 2G, "Foreign security country
determination" in the Notes to Financial Statements.
(d) Illiquid and restricted security. At December 31, 2007, this security
amounted to a value of $10 (reported in 000's) or 0.0% of net assets. For
acquisition information, see Note 6 "Illiquid and Restricted Securities" in
the Notes to Financial Statements.
(e) The rate shown is the discount rate.
See Notes to Financial Statements
77
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--96.4%
REAL ESTATE INVESTMENT TRUSTS--96.4%
DIVERSIFIED--4.7%
Vornado Realty Trust 72,093 $ 6,341
--------
HEALTH CARE--11.5%
HCP, Inc. 120,399 4,187
Health Care REIT, Inc. 91,775 4,101
Nationwide Health
Properties, Inc. 54,411 1,707
Ventas, Inc. 121,674 5,506
--------
15,501
--------
INDUSTRIAL/OFFICE--30.6%
INDUSTRIAL--9.6%
AMB Property Corp. 56,178 3,234
DCT Industrial Trust, Inc. 60,747 565
Prologis 145,563 9,226
--------
13,025
--------
MIXED--1.6%
Duke Realty Corp. 70,743 1,845
PS Business Parks, Inc. 7,094 373
--------
2,218
--------
OFFICE--15.3%
Alexandria Real Estate
Equities, Inc. 59,559 6,055
Boston Properties, Inc. 52,343 4,806
Corporate Office Properties
Trust 129,681 4,085
Douglas Emmett, Inc. 18,165 411
Kilroy Realty Corp. 15,253 838
SL Green Realty Corp. 47,810 4,468
--------
20,663
--------
SPECIALTY--4.1%
Digital Realty Trust, Inc. 143,432 5,503
--------
41,409
--------
VALUE
SHARES (000)
------- --------
LODGING/RESORTS--6.9%
DiamondRock Hospitality Co. 110,897 $ 1,661
Host Hotels & Resorts, Inc. 290,473 4,950
LaSalle Hotel Properties 48,500 1,547
Sunstone Hotel Investors, Inc. 66,975 1,225
--------
9,383
--------
RESIDENTIAL--10.0%
APARTMENTS--10.0%
AvalonBay Communities, Inc. 35,663 3,357
BRE Properties, Inc. 35,746 1,449
Equity Residential 94,669 3,453
Essex Property Trust, Inc. 36,470 3,555
UDR, Inc. 86,434 1,716
--------
13,530
--------
RETAIL--28.1%
REGIONAL MALLS--15.9%
General Growth
Properties, Inc. 132,880 5,472
Macerich Co. (The) 64,582 4,589
Simon Property Group, Inc. 130,939 11,374
--------
21,435
--------
SHOPPING CENTERS--12.2%
Developers Diversified
Realty Corp. 79,410 3,040
Federal Realty Investment
Trust 35,980 2,956
Kimco Realty Corp. 132,307 4,816
Regency Centers Corp. 50,330 3,246
Tanger Factory Outlet
Centers, Inc. 66,461 2,506
--------
16,564
--------
37,999
--------
VALUE
SHARES (000)
------- --------
SELF STORAGE--4.6%
Extra Space Storage, Inc. 148,224 $ 2,118
Public Storage, Inc. 55,225 4,054
--------
6,172
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $87,811) 130,335
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--96.4%
(IDENTIFIED COST $87,811) 130,335
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--2.5%
PAR
VALUE
(000)
-------
FEDERAL AGENCY SECURITIES(b)--2.5%
FHLB
3.200% due 1/2/08 $2,190 2,190
4.240% due 1/2/08 1,175 1,175
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $3,365) 3,365
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--98.9%
(IDENTIFIED COST $91,176) 133,700(a)
Other assets and liabilities, net--1.1% 1,440
--------
NET ASSETS--100.0% $135,140
========
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$44,644 and gross depreciation of $2,279 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $91,335.
(b) The rate shown is the discount rate.
See Notes to Financial Statements
78
PHOENIX-S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
EXCHANGE TRADED FUNDS--98.2%
Consumer Discretionary Select
Sector SPDR Fund 21,180 $ 693
Consumer Staples Select
Sector SPDR Fund 63,850 1,839
Energy Select Sector
SPDR Fund 23,060 1,830
Financial Select Sector
SPDR Fund 80,079 2,317
Health Care Select Sector
SPDR Fund 52,320 1,847
Industrial Select Sector
SPDR Fund 52,970 2,074
iShares Dow Jones US
Telecommunications
Sector Index Fund 31,060 917
iShares Lehman Short
Treasury Bond Fund 10,575 1,159
iShares MSCI Emerging
Markets Index Fund 12,210 1,835
iShares MSCI Japan
Index Fund 52,510 695
iShares S&P Europe
350 Index Fund 20,025 2,297
iShares S&P Latin America
40 Index Fund 3,665 912
Materials Select Sector
SPDR Fund 16,570 691
Technology Select Sector
SPDR Fund 112,165 2,990
Utilities Select Sector
SPDR Fund 21,570 913
- ----------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUNDS
(IDENTIFIED COST $21,158) 23,009
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--98.2%
(IDENTIFIED COST $21,158) 23,009
- ----------------------------------------------------------------------------
PAR
VALUE VALUE
(000) (000)
------- --------
SHORT-TERM INVESTMENTS--1.2%
COMMERCIAL PAPER(b)--1.2%
Eaton Corp.
4.250% due 1/2/08 $270 $ 270
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $270) 270
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.4%
(IDENTIFIED COST $21,428) 23,279(a)
Other assets and liabilities, net--0.6% 147
-------
NET ASSETS--100.0% $23,426
=======
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$1,745 and gross depreciation of $325 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $21,859.
(b) The rate shown is the discount rate.
See Notes to Financial Statements
79
PHOENIX-S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
EXCHANGE TRADED FUNDS--99.8%
Consumer Discretionary
Select Sector SPDR Fund 22,138 $ 724
Consumer Staples Select
Sector SPDR Fund 75,056 2,162
Energy Select Sector
SPDR Fund 27,124 2,152
Financial Select Sector
SPDR Fund 75,316 2,179
Health Care Select Sector
SPDR Fund 51,250 1,810
Industrial Select Sector
SPDR Fund 55,345 2,167
iShares Dow Jones US
Telecommunications
Sector Index Fund 36,510 1,078
iShares iBoxx $ Investment
Grade Corporate Bond Fund 3,463 363
iShares Lehman 1-3 Year
Treasury Bond Fund 53,125 4,364
iShares Lehman 3-7 Year
Treasury Bond Fund 3,455 364
iShares Lehman 7-10 Year
Treasury Bond Fund 4,200 365
iShares Lehman Short
Treasury Bond Fund 49,705 5,450
iShares MSCI Emerging
Markets Index Fund 16,740 2,516
iShares MSCI Japan Index
Fund 54,870 726
iShares S&P Europe 350
Index Fund 25,110 2,881
VALUE
SHARES (000)
------- --------
iShares S&P Latin America
40 Index Fund 4,305 $ 1,071
Materials Select Sector
SPDR Fund 25,980 1,083
Technology Select Sector
SPDR Fund 135,239 3,605
Utilities Select Sector
SPDR Fund 25,360 1,073
- ----------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUNDS
(IDENTIFIED COST $33,890) 36,133
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--99.8%
(IDENTIFIED COST $33,890) 36,133
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--0.4%
PAR
VALUE
(000)
-------
COMMERCIAL PAPER(b)--0.4%
Nicor, Inc.
4.000% due 1/2/08 $145 145
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $145) 145
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.2%
(IDENTIFIED COST $34,035) 36,278(a)
Other assets and liabilities, net--(0.2)% (89)
-------
NET ASSETS--100.0% $36,189
=======
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$1,977 and gross depreciation of $287 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $34,588.
(b) The rate shown is the discount rate.
See Notes to Financial Statements
80
PHOENIX-S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
EXCHANGE TRADED FUNDS--100.0%
Consumer Staples Select
Sector SPDR Fund 7,590 $ 219
Energy Select Sector
SPDR Fund 1,815 144
Financial Select Sector
SPDR Fund 2,560 74
Health Care Select Sector
SPDR Fund 2,100 74
Industrial Select Sector
SPDR Fund 5,600 219
iShares Dow Jones US
Telecommunications
Sector Index Fund 4,930 146
iShares iBoxx $ Investment
Grade Corporate Bond Fund 1,395 146
iShares Lehman 1-3 Year
Treasury Bond Fund 19,700 1,618
iShares Lehman 10-20 Year
Treasury Bond Fund 2,810 295
iShares Lehman 20+ Year
Treasury Bond Fund 2,380 222
iShares Lehman 3-7 Year
Treasury Bond Fund 4,180 440
VALUE
SHARES (000)
------- --------
iShares Lehman 7-10 Year
Treasury Bond Fund 4,240 $ 368
iShares Lehman Short
Treasury Bond Fund 18,765 2,057
iShares MSCI Emerging
Markets Index Fund 1,945 292
iShares S&P Europe 350
Index Fund 2,570 295
iShares S&P Latin America
40 Index Fund 580 144
Materials Select Sector
SPDR Fund 3,520 147
Technology Select Sector
SPDR Fund 10,940 292
Utilities Select Sector
SPDR Fund 3,440 146
- ----------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUNDS
(IDENTIFIED COST $7,016) 7,338
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.0%
(IDENTIFIED COST $7,016) 7,338(a)
Other assets and liabilities, net--0.0% (1)
-------
NET ASSETS--100.0% $ 7,337
=======
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$300 and gross depreciation of $8 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $7,046.
See Notes to Financial Statements
81
PHOENIX-S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
EXCHANGE TRADED FUNDS--99.7%
Consumer Discretionary
Select Sector SPDR Fund 6,000 $ 196
Consumer Staples Select
Sector SPDR Fund 33,910 977
Energy Select Sector SPDR
Fund 12,245 972
Financial Select Sector
SPDR Fund 27,230 788
Health Care Select Sector
SPDR Fund 16,670 589
Industrial Select Sector
SPDR Fund 30,010 1,175
iShares Dow Jones US
Telecommunications
Sector Index Fund 19,810 585
iShares iBoxx $ Investment
Grade Corporate Bond Fund 1,875 196
iShares Lehman 1-3 Year
Treasury Bond Fund 33,620 2,762
iShares Lehman 10-20 Year
Treasury Bond Fund 3,760 395
iShares Lehman 20+ Year
Treasury Bond Fund 4,250 395
iShares Lehman 3-7 Year
Treasury Bond Fund 7,490 789
iShares Lehman 7-10 Year
Treasury Bond Fund 6,825 592
iShares Lehman Short
Treasury Bond Fund 34,135 3,742
iShares MSCI Emerging
Markets Index Fund 6,485 975
iShares MSCI Japan Index
Fund 14,870 197
VALUE
SHARES (000)
------- --------
iShares S&P Europe 350
Index Fund 10,205 $ 1,171
iShares S&P Latin America
40 Index Fund 2,340 582
Materials Select Sector
SPDR Fund 9,390 391
Technology Select Sector
SPDR Fund 58,675 1,564
Utilities Select Sector
SPDR Fund 13,740 582
- ----------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUNDS
(IDENTIFIED COST $18,310) 19,615
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--99.7%
(IDENTIFIED COST $18,310) 19,615
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--0.6%
PAR
VALUE
(000)
-------
COMMERCIAL PAPER(b)--0.6%
Nicor, Inc.
4.000% due 1/2/08 $125 125
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $125) 125
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.3%
(IDENTIFIED COST $18,435) 19,740(a)
Other assets and liabilities, net--(0.3)% (55)
-------
NET ASSETS--100.0% $19,685
=======
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$1,138 and gross depreciation of $70 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $18,672.
(b) The rate shown is the discount rate.
See Notes to Financial Statements
82
PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--90.0%
AEROSPACE & DEFENSE--0.9%
Goodrich Corp. 18,000 $ 1,271
--------
AGRICULTURAL PRODUCTS--0.3%
Corn Products International,
Inc. 10,600 390
--------
AIRLINES--1.7%
Alaska Air Group, Inc.(b) 34,100 853
Continental Airlines, Inc.
Class B(b) 30,100 669
SkyWest, Inc. 30,200 811
--------
2,333
--------
APPAREL, ACCESSORIES & LUXURY GOODS--1.2%
Jones Apparel Group, Inc. 37,000 592
VF Corp. 14,900 1,023
--------
1,615
--------
AUTO PARTS & EQUIPMENT--1.9%
ArvinMeritor, Inc. 93,500 1,097
TRW Automotive Holdings
Corp.(b) 70,800 1,479
--------
2,576
--------
AUTOMOTIVE RETAIL--0.8%
AutoNation, Inc.(b) 66,961 1,049
--------
BREWERS--1.6%
Molson Coors Brewing Co.
Class B 43,000 2,220
--------
COMMODITY CHEMICALS--1.3%
Celanese Corp. Series A 40,800 1,727
--------
COMMUNICATIONS EQUIPMENT--1.2%
CommScope, Inc.(b) 34,500 1,698
--------
CONSTRUCTION & FARM MACHINERY &
HEAVY TRUCKS--2.2%
AGCO Corp.(b) 23,600 1,604
Terex Corp.(b) 22,800 1,495
--------
3,099
--------
DEPARTMENT STORES--0.3%
Dillard's, Inc. Class A 23,000 432
--------
DIVERSIFIED CHEMICALS--1.2%
Ashland, Inc. 35,900 1,703
--------
ELECTRIC UTILITIES--3.8%
Allegheny Energy, Inc. 14,400 916
Northeast Utilities 61,800 1,935
Reliant Energy, Inc.(b) 94,000 2,466
--------
5,317
--------
VALUE
SHARES (000)
------- --------
ELECTRICAL COMPONENTS & EQUIPMENT--4.8%
Acuity Brands, Inc. 25,100 $ 1,129
Cooper Industries Ltd. Class A 34,300 1,814
EnerSys(b) 72,800 1,817
Regal-Beloit Corp. 41,800 1,879
--------
6,639
--------
ELECTRONIC EQUIPMENT MANUFACTURERS--2.0%
AVX Corp. 22,400 301
Checkpoint Systems, Inc.(b) 43,800 1,138
Vishay Intertechnology, Inc.(b) 112,400 1,282
--------
2,721
--------
ELECTRONIC MANUFACTURING SERVICES--0.2%
Sanmina-SCI Corp.(b) 167,000 304
--------
FOOD DISTRIBUTORS--1.4%
Performance Food Group Co.(b) 70,200 1,886
--------
FOOD RETAIL--2.8%
Ruddick Corp. 64,300 2,229
SUPERVALU, Inc. 41,800 1,569
--------
3,798
--------
GAS UTILITIES--0.7%
Atmos Energy Corp. 32,500 911
--------
HEALTH CARE DISTRIBUTORS--0.2%
PharMerica Corp.(b) 16,105 224
--------
HEALTH CARE FACILITIES--1.9%
Kindred Healthcare, Inc.(b) 44,000 1,099
LifePoint Hospitals, Inc.(b) 32,800 976
Universal Health Services, Inc.
Class B 12,000 614
--------
2,689
--------
HEALTH CARE SERVICES--0.8%
Apria Healthcare Group, Inc.(b) 29,600 638
Omnicare, Inc. 22,400 511
--------
1,149
--------
HOME FURNISHINGS--0.4%
Furniture Brands International,
Inc. 59,700 601
--------
HOMEBUILDING--0.3%
KB Home 17,500 378
--------
HUMAN RESOURCES & EMPLOYMENT SERVICES--0.5%
Kelly Services, Inc. Class A 35,000 653
--------
INDEPENDENT POWER PRODUCERS &
ENERGY TRADERS--0.9%
Constellation Energy Group,
Inc. 12,400 1,271
--------
VALUE
SHARES (000)
------- --------
INDUSTRIAL MACHINERY--4.9%
Briggs & Stratton Corp. 55,600 $ 1,260
Kennametal, Inc. 53,000 2,007
Mueller Industries, Inc. 41,800 1,212
SPX Corp. 22,900 2,355
--------
6,834
--------
INTEGRATED OIL & GAS--2.6%
Hess Corp. 36,100 3,641
--------
LEISURE PRODUCTS--0.4%
Brunswick Corp. 35,100 598
--------
LIFE & HEALTH INSURANCE--1.3%
StanCorp Financial Group, Inc. 36,200 1,824
--------
LIFE SCIENCES TOOLS & SERVICES--1.5%
PerkinElmer, Inc. 82,000 2,134
--------
MANAGED HEALTH CARE--1.4%
Molina Healthcare, Inc.(b) 48,800 1,889
--------
METAL & GLASS CONTAINERS--1.6%
AptarGroup, Inc. 22,200 908
Owens-Illinois, Inc.(b) 4,500 223
Silgan Holdings, Inc. 20,700 1,075
--------
2,206
--------
MULTI-UTILITIES--1.6%
Puget Energy, Inc. 25,300 694
Wisconsin Energy Corp. 29,800 1,452
--------
2,146
--------
OFFICE REITS--0.9%
Digital Realty Trust, Inc. 31,500 1,209
--------
OFFICE SERVICES & SUPPLIES--2.2%
IKON Office Solutions, Inc. 125,300 1,632
United Stationers, Inc.(b) 30,000 1,386
--------
3,018
--------
OIL & GAS DRILLING--0.4%
Rowan Cos., Inc. 14,800 584
--------
OIL & GAS EQUIPMENT & SERVICES--2.0%
Exterran Holdings, Inc.(b) 16,800 1,374
Oil States International, Inc.(b) 41,500 1,416
--------
2,790
--------
PACKAGED FOODS & MEATS--0.5%
Smithfield Foods, Inc.(b) 22,800 659
--------
PAPER PACKAGING--0.5%
Sonoco Products Co. 20,500 670
--------
See Notes to Financial Statements
83
PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
VALUE
SHARES (000)
------- --------
PROPERTY & CASUALTY INSURANCE--1.8%
Fidelity National Financial, Inc.
Class A 75,900 $ 1,109
Old Republic International
Corp. 92,500 1,425
--------
2,534
--------
REGIONAL BANKS--5.6%
Central Pacific Financial Corp. 53,800 993
South Financial Group, Inc.
(The) 60,900 952
Susquehanna Bancshares, Inc. 70,600 1,302
Trustmark Corp. 54,834 1,390
UnionBanCal Corp. 14,500 709
Webster Financial Corp. 44,100 1,410
Whitney Holding Corp. 38,500 1,007
--------
7,763
--------
RESIDENTIAL REITS--0.5%
Mid-America Apartment
Communities, Inc. 16,000 684
--------
RESTAURANTS--0.6%
Jack in the Box, Inc.(b) 12,900 332
Papa John's International,
Inc.(b) 19,500 443
--------
775
--------
RETAIL REITS--1.0%
Tanger Factory Outlet Centers 17,800 671
Taubman Centers, Inc. 13,400 659
--------
1,330
--------
SEMICONDUCTOR EQUIPMENT--0.3%
Teradyne, Inc.(b) 45,000 465
--------
SEMICONDUCTORS--1.9%
Amkor Technology, Inc.(b) 79,400 677
Spansion, Inc. Class A(b) 78,000 307
Zoran Corp.(b) 72,900 1,641
--------
2,625
--------
SPECIALIZED REITS--1.4%
Ashford Hospitality Trust, Inc. 68,000 489
FelCor Lodging Trust, Inc. 60,700 946
Strategic Hotels & Resorts,
Inc. 30,500 510
--------
1,945
--------
VALUE
SHARES (000)
------- --------
SPECIALTY CHEMICALS--4.2%
Cytec Industries, Inc. 32,600 $ 2,008
Lubrizol Corp. (The) 27,000 1,462
Rockwood Holdings, Inc.(b) 64,900 2,156
Zep, Inc.(b) 12,550 174
--------
5,800
--------
SPECIALTY STORES--0.1%
Office Depot, Inc.(b) 9,000 125
--------
STEEL--5.0%
Cleveland-Cliffs, Inc. 3,000 302
Commercial Metals Co. 49,900 1,470
Metal Management, Inc. 21,700 988
Quanex Corp. 33,200 1,723
Steel Dynamics, Inc. 40,200 2,395
--------
6,878
--------
TECHNOLOGY DISTRIBUTORS--1.5%
Arrow Electronics, Inc.(b) 40,500 1,591
Tech Data Corp.(b) 13,500 509
--------
2,100
--------
THRIFTS & MORTGAGE FINANCE--1.8%
Astoria Financial Corp. 51,750 1,204
Provident Financial Services,
Inc. 87,500 1,262
--------
2,466
--------
TOBACCO--1.5%
Universal Corp. 41,300 2,115
--------
TRADING COMPANIES & DISTRIBUTORS--1.3%
GATX Corp. 49,100 1,801
--------
TRUCKING--4.4%
Arkansas Best Corp. 41,000 900
Avis Budget Group, Inc.(b) 84,800 1,102
Con-Way, Inc. 35,000 1,454
Ryder System, Inc. 29,100 1,368
Werner Enterprises, Inc. 76,500 1,303
--------
6,127
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $116,046) 124,389
- ----------------------------------------------------------------------------
VALUE
SHARES (000)
------- --------
FOREIGN COMMON STOCKS(c)--7.4%
AUTO PARTS & EQUIPMENT--0.4%
Autoliv, Inc. (Sweden) 12,000 $ 633
--------
COMMERCIAL PRINTING--0.1%
Quebecor World, Inc.
(Canada)(b) 53,000 95
--------
COMMODITY CHEMICALS--0.6%
Methanex Corp. (Canada) 29,800 823
--------
ELECTRONIC MANUFACTURING SERVICES--0.4%
Flextronics International Ltd.
(Singapore)(b) 47,229 570
--------
PROPERTY & CASUALTY INSURANCE--1.4%
Aspen Insurance Holdings Ltd.
(United States) 66,100 1,906
--------
REINSURANCE--4.5%
Arch Capital Group Ltd.
(United States)(b) 37,500 2,638
PartnerRe Ltd. (United States) 6,700 553
Platinum Underwriters Holdings
Ltd. (United States) 64,000 2,276
RenaissanceRe Holdings Ltd.
(United States) 13,500 813
--------
6,280
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $9,844) 10,307
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--97.4%
(IDENTIFIED COST $125,890) 134,696
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--2.4%
MONEY MARKET MUTUAL FUNDS--2.4%
SSgA Money Market Fund
(4.96% seven-day
effective yield) 3,316,443 3,316
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $3,316) 3,316
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.8%
(IDENTIFIED COST $129,206) 138,012(a)
Other assets and liabilities, net--0.2% 242
--------
NET ASSETS--100.0% $138,254
========
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$26,013 and gross depreciation of $17,207 for federal income tax purposes.
At December 31, 2007, the aggregate cost of securities for federal income
tax purposes was $129,206.
(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.
See Notes to Financial Statements
84
PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--91.8%
AIRLINES--1.7%
Alaska Air Group, Inc.(b) 19,100 $ 478
Continental Airlines, Inc.
Class B(b) 14,500 322
SkyWest, Inc. 16,500 443
-------
1,243
-------
APPAREL RETAIL--1.0%
Shoe Carnival, Inc.(b) 53,800 759
-------
APPAREL, ACCESSORIES & LUXURY GOODS--0.3%
Jones Apparel Group, Inc. 11,600 186
-------
AUTO PARTS & EQUIPMENT--1.9%
ArvinMeritor, Inc. 56,800 666
TRW Automotive Holdings
Corp.(b) 33,400 698
-------
1,364
-------
AUTOMOBILE MANUFACTURERS--0.5%
Monaco Coach Corp. 39,800 353
-------
AUTOMOTIVE RETAIL--1.0%
Sonic Automotive, Inc. Class A 36,250 702
-------
COMMUNICATIONS EQUIPMENT--1.5%
CommScope, Inc.(b) 22,100 1,088
-------
CONSTRUCTION & FARM MACHINERY &
HEAVY TRUCKS--3.6%
Accuride Corp.(b) 94,875 746
Commercial Vehicle Group,
Inc.(b) 65,500 950
Terex Corp.(b) 14,300 937
-------
2,633
-------
DEPARTMENT STORES--0.3%
Dillard's, Inc. Class A 13,200 248
-------
DIVERSIFIED COMMERCIAL &
PROFESSIONAL SERVICES--0.5%
Angelica Corp. 20,575 393
-------
ELECTRIC UTILITIES--1.4%
Northeast Utilities 33,150 1,038
-------
ELECTRICAL COMPONENTS & EQUIPMENT--3.7%
Acuity Brands, Inc. 14,100 635
EnerSys(b) 55,300 1,380
Regal-Beloit Corp. 16,000 719
-------
2,734
-------
ELECTRONIC EQUIPMENT MANUFACTURERS--2.0%
AVX Corp. 13,600 183
Checkpoint Systems, Inc.(b) 22,600 587
Vishay Intertechnology, Inc.(b) 63,400 723
-------
1,493
-------
VALUE
SHARES (000)
------- --------
ELECTRONIC MANUFACTURING SERVICES--1.3%
CTS Corp. 76,100 $ 756
Sanmina-SCI Corp.(b) 85,500 155
-------
911
-------
FOOD DISTRIBUTORS--1.2%
Performance Food Group Co.(b) 33,900 911
-------
FOOD RETAIL--1.8%
Ruddick Corp. 37,500 1,300
-------
GAS UTILITIES--0.5%
Atmos Energy Corp. 14,200 398
-------
HEALTH CARE DISTRIBUTORS--0.2%
PharMerica Corp.(b) 9,626 134
-------
HEALTH CARE EQUIPMENT--2.0%
CONMED Corp.(b) 23,100 534
Datascope Corp. 25,600 932
-------
1,466
-------
HEALTH CARE FACILITIES--2.7%
Five Star Quality Care, Inc. 58,000 482
Kindred Healthcare, Inc.(b) 26,300 657
LifePoint Hospitals, Inc.(b) 15,200 452
Universal Health Services, Inc.
Class B 7,600 389
-------
1,980
-------
HEALTH CARE SERVICES--1.3%
Apria Healthcare Group, Inc.(b) 15,800 341
Gentiva Health Services, Inc.(b) 31,700 603
-------
944
-------
HOME FURNISHINGS--0.5%
Furniture Brands International,
Inc. 36,300 365
-------
HOMEBUILDING--0.3%
KB Home 10,200 220
-------
HUMAN RESOURCES & EMPLOYMENT SERVICES--0.5%
Kelly Services, Inc. Class A 19,900 371
-------
INDUSTRIAL MACHINERY--7.4%
Briggs & Stratton Corp. 31,900 723
Columbus McKinnon Corp.(b) 44,700 1,458
Hurco Cos., Inc.(b) 3,000 131
Kennametal, Inc. 26,000 984
Lydall, Inc.(b) 35,900 378
Mueller Industries, Inc. 22,200 644
Robbins & Myers, Inc. 14,400 1,089
-------
5,407
-------
VALUE
SHARES (000)
------- --------
LEISURE PRODUCTS--0.6%
Brunswick Corp. 14,300 $ 244
Steinway Musical Instruments,
Inc. 7,200 198
-------
442
-------
LIFE & HEALTH INSURANCE--1.4%
StanCorp Financial Group, Inc. 20,100 1,013
-------
LIFE SCIENCES TOOLS & SERVICES--1.4%
PerkinElmer, Inc. 40,500 1,054
-------
MANAGED HEALTH CARE--1.6%
Molina Healthcare, Inc.(b) 29,600 1,146
-------
METAL & GLASS CONTAINERS--2.6%
AptarGroup, Inc. 12,600 515
Myers Industries, Inc. 29,900 433
Silgan Holdings, Inc. 18,600 966
-------
1,914
-------
MULTI-LINE INSURANCE--0.5%
American National Insurance
Co. 2,700 327
-------
MULTI-UTILITIES--0.5%
Puget Energy, Inc. 13,600 373
-------
OFFICE REITS--0.9%
Digital Realty Trust, Inc. 17,100 656
-------
OFFICE SERVICES & SUPPLIES--1.3%
IKON Office Solutions, Inc. 75,200 979
-------
OIL & GAS EQUIPMENT & SERVICES--2.4%
Bristow Group, Inc.(b) 5,400 306
Exterran Holdings, Inc.(b) 8,900 728
Oil States International, Inc.(b) 21,600 737
-------
1,771
-------
PACKAGED FOODS & MEATS--2.6%
J & J Snack Foods Corp. 14,000 438
Sanderson Farms, Inc. 11,000 372
Smithfield Foods, Inc.(b) 37,561 1,086
-------
1,896
-------
PAPER PACKAGING--0.6%
Rock-Tenn Co. Class A 18,300 465
-------
PAPER PRODUCTS--1.0%
Schweitzer-Mauduit
International, Inc. 27,525 713
-------
See Notes to Financial Statements
85
PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
VALUE
SHARES (000)
------- --------
PROPERTY & CASUALTY INSURANCE--2.1%
American Physicians Capital,
Inc. 28,950 $ 1,200
Harleysville Group, Inc. 9,500 336
-------
1,536
-------
REGIONAL BANKS--6.7%
AmericanWest Bancorp 10,500 185
Banner Corp. 18,600 535
Central Pacific Financial Corp. 31,000 572
Community Bank System, Inc. 17,600 350
South Financial Group, Inc.
(The) 38,400 600
Susquehanna Bancshares, Inc. 33,900 625
Trustmark Corp. 34,900 885
Webster Financial Corp. 24,500 783
Whitney Holding Corp. 12,800 335
-------
4,870
-------
RESIDENTIAL REITS--0.7%
Mid-America Apartment
Communities, Inc. 12,400 530
-------
RESTAURANTS--1.0%
Jack in the Box, Inc.(b) 7,000 180
Papa John's International,
Inc.(b) 23,600 536
-------
716
-------
RETAIL REITS--1.0%
Tanger Factory Outlet Centers 10,300 388
Taubman Centers, Inc. 7,600 374
-------
762
-------
SEMICONDUCTORS--1.8%
Amkor Technology, Inc.(b) 30,100 257
Spansion, Inc. Class A(b) 44,400 175
Zoran Corp.(b) 37,600 846
-------
1,278
-------
SPECIALIZED CONSUMER SERVICES--0.5%
Steiner Leisure Ltd.(b) 9,000 397
-------
SPECIALIZED REITS--1.7%
Ashford Hospitality Trust, Inc. 38,000 273
FelCor Lodging Trust, Inc. 40,100 625
Strategic Hotels & Resorts,
Inc. 18,500 310
-------
1,208
-------
VALUE
SHARES (000)
------- --------
SPECIALTY CHEMICALS--4.5%
Cytec Industries, Inc. 18,700 $ 1,151
PolyOne Corp.(b) 120,300 792
Rockwood Holdings, Inc.(b) 38,600 1,282
Zep, Inc.(b) 7,050 98
-------
3,323
-------
STEEL--5.2%
Commercial Metals Co. 35,100 1,034
Metal Management, Inc. 11,800 537
Quanex Corp. 18,000 934
Steel Dynamics, Inc. 21,500 1,281
-------
3,786
-------
TECHNOLOGY DISTRIBUTORS--0.8%
PC Connection, Inc.(b) 51,200 581
-------
THRIFTS & MORTGAGE FINANCE--1.7%
Astoria Financial Corp. 26,450 615
Provident Financial Services,
Inc. 45,400 655
-------
1,270
-------
TOBACCO--1.5%
Universal Corp. 21,200 1,086
-------
TRADING COMPANIES & DISTRIBUTORS--2.7%
GATX Corp. 25,200 925
Kaman Corp. 29,100 1,071
-------
1,996
-------
TRUCKING--3.4%
Arkansas Best Corp. 20,000 439
Avis Budget Group, Inc.(b) 36,100 469
Con-Way, Inc. 15,900 661
Dollar Thrifty Automotive
Group, Inc.(b) 15,200 360
Werner Enterprises, Inc. 34,200 582
-------
2,511
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $65,084) 67,240
- ----------------------------------------------------------------------------
VALUE
SHARES (000)
------- --------
FOREIGN COMMON STOCKS(c)--6.7%
BROADCASTING & CABLE TV--0.2%
Corus Entertainment, Inc.
Class B (Canada) 2,900 $ 143
-------
COMMERCIAL PRINTING--0.1%
Quebecor World, Inc.
(Canada)(b) 33,500 60
-------
COMMODITY CHEMICALS--0.7%
Methanex Corp. (Canada) 17,800 491
-------
PROPERTY & CASUALTY INSURANCE--1.6%
Aspen Insurance Holdings Ltd.
(United States) 40,700 1,174
-------
REINSURANCE--4.1%
Arch Capital Group Ltd.
(United States)(b) 20,000 1,407
PartnerRe Ltd. (United States) 2,900 239
Platinum Underwriters Holdings
Ltd. (United States) 38,400 1,366
-------
3,012
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $4,452) 4,880
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--98.5%
(IDENTIFIED COST $69,536) 72,120
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--1.3%
MONEY MARKET MUTUAL FUNDS--1.3%
SSgA Money Market Fund
(4.96% seven-day
effective yield) 971,359 971
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $971) 971
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.8%
(IDENTIFIED COST $70,507) 73,091(a)
Other assets and liabilities, net--0.2% 151
-------
NET ASSETS--100.0% $73,242
=======
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$11,932 and gross depreciation of $9,348 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $70,507.
(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.
See Notes to Financial Statements
86
PHOENIX-VAN KAMPEN COMSTOCK SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--87.9%
AIRLINES--0.6%
Southwest Airlines Co. 45,000 $ 549
-------
ALUMINUM--0.8%
Alcoa, Inc. 19,000 694
-------
ASSET MANAGEMENT & CUSTODY BANKS--1.9%
Bank of New York Mellon Corp.
(The) 34,245 1,670
-------
BREWERS--0.9%
Anheuser-Busch Cos., Inc. 14,300 748
-------
BROADCASTING & CABLE TV--3.5%
Comcast Corp. Class A(b) 116,050 2,119
Liberty Media Corp. -
Capital Class A(b) 8,395 978
-------
3,097
-------
CATALOG RETAIL--0.9%
Liberty Media Corp. -
Interactive Class A(b) 40,975 782
-------
COMPUTER HARDWARE--2.6%
Dell, Inc.(b) 32,700 802
Hewlett-Packard Co. 10,700 540
International Business
Machines Corp. 8,200 886
-------
2,228
-------
DATA PROCESSING & OUTSOURCED SERVICES--0.8%
Computer Sciences Corp.(b) 5,700 282
Western Union Co. (The) 17,700 430
-------
712
-------
DIVERSIFIED BANKS--4.9%
U.S. Bancorp 16,700 530
Wachovia Corp. 58,800 2,236
Wells Fargo & Co. 48,600 1,467
-------
4,233
-------
DIVERSIFIED CHEMICALS--2.5%
E.I. du Pont de Nemours & Co. 48,900 2,156
-------
DRUG RETAIL--1.9%
CVS Caremark Corp. 41,300 1,642
-------
GOLD--0.2%
Newmont Mining Corp. 3,000 147
-------
VALUE
SHARES (000)
------- --------
HEALTH CARE DISTRIBUTORS--1.4%
Cardinal Health, Inc. 20,800 $ 1,201
-------
HEALTH CARE EQUIPMENT--0.6%
Boston Scientific Corp. 46,400 540
-------
HOME IMPROVEMENT RETAIL--0.6%
Home Depot, Inc. (The) 9,600 259
Lowe's Cos., Inc. 12,200 276
-------
535
-------
HOUSEHOLD PRODUCTS--2.5%
Kimberly-Clark Corp. 20,100 1,394
Procter & Gamble Co. (The) 11,300 829
-------
2,223
-------
HYPERMARKETS & SUPER CENTERS--2.9%
Wal-Mart Stores, Inc. 53,300 2,533
-------
INDUSTRIAL CONGLOMERATES--1.3%
General Electric Co. 31,200 1,157
-------
INTEGRATED TELECOMMUNICATION SERVICES--4.8%
AT&T, Inc. 31,600 1,313
Verizon Communications, Inc. 66,400 2,901
-------
4,214
-------
INVESTMENT BANKING & BROKERAGE--1.5%
Bear Stearns Cos., Inc. (The) 4,600 406
Merrill Lynch & Co., Inc. 17,100 918
-------
1,324
-------
LIFE & HEALTH INSURANCE--2.1%
AFLAC, Inc. 6,900 432
MetLife, Inc. 13,500 832
Torchmark Corp. 9,800 593
-------
1,857
-------
MANAGED HEALTH CARE--0.8%
UnitedHealth Group, Inc. 6,100 355
WellPoint, Inc.(b) 3,400 298
-------
653
-------
MOVIES & ENTERTAINMENT--6.5%
News Corp. Class B 44,600 948
Time Warner, Inc. 124,800 2,061
Viacom, Inc. Class B(b) 59,800 2,626
-------
5,635
-------
VALUE
SHARES (000)
------- --------
MULTI-LINE INSURANCE--1.8%
American International Group,
Inc. 15,100 $ 880
Genworth Financial, Inc.
Class A 12,000 306
Hartford Financial Services
Group, Inc. (The) 3,900 340
-------
1,526
-------
OTHER DIVERSIFIED FINANCIAL SERVICES--7.4%
Bank of America Corp. 71,500 2,950
Citigroup, Inc. 75,900 2,235
JPMorgan Chase & Co. 29,700 1,296
-------
6,481
-------
PACKAGED FOODS & MEATS--2.4%
Kraft Foods, Inc. Class A 54,924 1,792
Sara Lee Corp. 17,800 286
-------
2,078
-------
PAPER PRODUCTS--3.9%
International Paper Co. 104,400 3,380
-------
PHARMACEUTICALS--13.0%
Abbott Laboratories 26,100 1,465
Bristol-Myers Squibb Co. 105,400 2,795
Lilly (Eli) & Co. 26,900 1,436
Pfizer, Inc. 68,000 1,546
Schering-Plough Corp. 77,400 2,062
Wyeth 47,200 2,086
-------
11,390
-------
PROPERTY & CASUALTY INSURANCE--4.0%
Berkshire Hathaway, Inc.
Class B(b) 100 474
Chubb Corp. (The) 39,700 2,167
MBIA, Inc. 5,700 106
Travelers Cos., Inc. (The) 13,200 710
-------
3,457
-------
REGIONAL BANKS--1.0%
PNC Financial Services Group,
Inc. (The) 13,500 886
-------
SEMICONDUCTOR EQUIPMENT--0.3%
KLA-Tencor Corp. 6,100 294
-------
SEMICONDUCTORS--1.0%
Intel Corp. 21,400 570
Texas Instruments, Inc. 9,300 311
-------
881
-------
See Notes to Financial Statements
87
PHOENIX-VAN KAMPEN COMSTOCK SERIES
VALUE
SHARES (000)
------- --------
SOFT DRINKS--2.2%
Coca-Cola Co. (The) 31,400 $ 1,927
-------
SPECIALTY CHEMICALS--0.9%
Rohm & Haas Co. 15,000 796
-------
SYSTEMS SOFTWARE--0.6%
Microsoft Corp. 15,800 563
-------
THRIFTS & MORTGAGE FINANCE--1.2%
Fannie Mae 6,800 272
Freddie Mac 23,600 804
-------
1,076
-------
TOBACCO--1.7%
Altria Group, Inc. 19,900 1,504
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $73,164) 76,769
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS(c)--6.7%
COMMUNICATIONS EQUIPMENT--0.3%
Alcatel SA Sponsored ADR
(France) 6,000 44
Telefonaktiebolaget LM Ericsson
Sponsored ADR (Sweden) 9,000 210
-------
254
-------
VALUE
SHARES (000)
------- --------
DIVERSIFIED BANKS--0.1%
Barclays plc Sponsored ADR
(United Kingdom) 3,300 $ 133
-------
PACKAGED FOODS & MEATS--4.9%
Cadbury Schweppes plc
Sponsored ADR
(United Kingdom) 40,800 2,014
Unilever N.V. NY Registered
Shares (Netherlands) 61,600 2,246
-------
4,260
-------
PHARMACEUTICALS--1.4%
GlaxoSmithKline plc Sponsored
ADR (United Kingdom) 16,800 846
Roche Holding AG Sponsored
ADR (Switzerland) 4,600 393
1,239
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $4,912) 5,886
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--94.6%
(IDENTIFIED COST $78,076) 82,655
- ----------------------------------------------------------------------------
PAR
VALUE VALUE
(000) (000)
------- --------
SHORT-TERM INVESTMENTS--5.3%
FEDERAL AGENCY SECURITIES(d)--5.3%
FHLB
3.250% due 1/2/08 $4,600 $ 4,600
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $4,600) 4,600
TOTAL INVESTMENTS--99.9%
(IDENTIFIED COST $82,676) 87,255(a)
Other assets and liabilities, net--0.1% 117
-------
NET ASSETS--100.0% $87,372
=======
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$9,948 and gross depreciation of $5,650 for federal income tax purposes. At
December 31, 2007, the aggregate cost of securities for federal income tax
purposes was $82,957.
(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
88
PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
VALUE
SHARES (000)
------- --------
DOMESTIC COMMON STOCKS--97.5%
ADVERTISING--0.1%
Interpublic Group of Cos.,
Inc. (The)(b) 4,463 $ 36
Omnicom Group, Inc. 3,108 148
-------
184
-------
AEROSPACE & DEFENSE--2.8%
Boeing Co. (The) 7,360 644
General Dynamics Corp. 3,840 342
Goodrich Corp. 1,185 84
Honeywell International, Inc. 7,083 436
L-3 Communications Holdings,
Inc. 1,193 126
Lockheed Martin Corp. 3,287 346
Northrop Grumman Corp. 3,210 252
Precision Castparts Corp. 1,302 181
Raytheon Co. 4,080 248
Rockwell Collins, Inc. 1,550 111
United Technologies Corp. 9,387 718
-------
3,488
-------
AGRICULTURAL PRODUCTS--0.2%
Archer-Daniels-Midland Co. 6,092 283
-------
AIR FREIGHT & LOGISTICS--0.9%
Expeditors International of
Washington, Inc. 2,020 90
FedEx Corp. 2,923 261
Robinson (C.H.) Worldwide, Inc. 1,634 88
United Parcel Service, Inc.
Class B 9,980 706
-------
1,145
-------
AIRLINES--0.1%
Southwest Airlines Co. 6,970 85
-------
ALUMINUM--0.2%
Alcoa, Inc. 8,050 294
-------
APPAREL RETAIL--0.3%
Abercrombie & Fitch Co.
Class A 821 66
Gap, Inc. (The) 4,420 94
Limited Brands, Inc. 2,950 56
TJX Cos., Inc. (The) 4,150 119
-------
335
-------
APPAREL, ACCESSORIES & LUXURY GOODS--0.2%
Coach, Inc.(b) 3,500 107
Jones Apparel Group, Inc. 810 13
Liz Claiborne, Inc. 940 19
Polo Ralph Lauren Corp. 567 35
VF Corp. 844 58
-------
232
-------
APPLICATION SOFTWARE--0.4%
Adobe Systems, Inc.(b) 5,450 $ 233
Autodesk, Inc.(b) 2,178 108
Citrix Systems, Inc.(b) 1,800 69
Compuware Corp.(b) 2,720 24
Intuit, Inc.(b) 3,160 100
-------
534
-------
ASSET MANAGEMENT & CUSTODY BANKS--1.3%
American Capital Strategies
Ltd. 1,820 60
Ameriprise Financial, Inc. 2,200 121
Bank of New York Mellon Corp. (The) 10,810 527
Federated Investors, Inc.
Class B 829 34
Franklin Resources, Inc. 1,536 176
Janus Capital Group, Inc. 1,460 48
Legg Mason, Inc. 1,257 92
Northern Trust Corp. 1,813 139
State Street Corp. 3,687 299
T. Rowe Price Group, Inc. 2,513 153
-------
1,649
-------
AUTO PARTS & EQUIPMENT--0.2%
Johnson Controls, Inc. 5,640 203
WABCO Holdings, Inc. 1 --(f)
-------
203
-------
AUTOMOBILE MANUFACTURERS--0.2%
Ford Motor Co.(b) 20,040 135
General Motors Corp. 5,353 133
-------
268
-------
AUTOMOTIVE RETAIL--0.1%
AutoNation, Inc.(b) 1,330 21
AutoZone, Inc.(b) 434 52
-------
73
-------
BIOTECHNOLOGY--1.1%
Amgen, Inc.(b) 10,330 480
Biogen Idec, Inc.(b) 2,790 159
Celgene Corp.(b) 3,660 169
Genzyme Corp.(b) 2,530 188
Gilead Sciences, Inc.(b) 8,840 407
-------
1,403
-------
BREWERS--0.3%
Anheuser-Busch Cos., Inc. 6,970 365
Molson Coors Brewing Co.
Class B 1,291 66
-------
431
-------
BROADCASTING & CABLE TV--0.9%
CBS Corp. Class B 6,510 $ 177
Clear Channel
Communications, Inc. 4,713 163
Comcast Corp. Class A(b) 29,180 533
DIRECTV Group, Inc. (The)(b) 6,820 158
Scripps (E.W.) Co. (The)
Class A 849 38
-------
1,069
-------
BUILDING PRODUCTS--0.1%
Masco Corp. 3,500 76
Trane, Inc. 1,630 76
-------
152
-------
CASINOS & GAMING--0.2%
Harrah's Entertainment, Inc. 1,767 157
International Game Technology 2,990 131
-------
288
-------
COAL & CONSUMABLE FUELS--0.2%
Consol Energy, Inc. 1,723 123
Peabody Energy Corp. 2,507 155
-------
278
-------
COMMERCIAL PRINTING--0.1%
RR Donnelley & Sons Co. 2,040 77
-------
COMMUNICATIONS EQUIPMENT--2.5%
Ciena Corp.(b) 808 28
Cisco Systems, Inc.(b) 57,610 1,560
Corning, Inc. 14,960 359
JDS Uniphase Corp.(b) 2,080 28
Juniper Networks, Inc.(b) 4,950 164
Motorola, Inc. 21,690 348
QUALCOMM, Inc. 15,540 611
Tellabs, Inc. 4,170 27
-------
3,125
-------
COMPUTER & ELECTRONICS RETAIL--0.2%
Best Buy Co., Inc. 3,330 175
Circuit City Stores, Inc. 1,595 7
GameStop Corp. Class A(b) 1,510 94
RadioShack Corp. 1,240 21
-------
297
-------
COMPUTER HARDWARE--4.0%
Apple, Inc.(b) 8,310 1,646
Dell, Inc.(b) 21,280 521
Hewlett-Packard Co. 24,480 1,236
International Business
Machines Corp. 13,080 1,414
Sun Microsystems, Inc.(b) 7,870 143
Teradata Corp.(b) 1,702 47
-------
5,007
-------
See Notes to Financial Statements
89
PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES
VALUE
SHARES (000)
------- --------
COMPUTER STORAGE & PERIPHERALS--0.5%
EMC Corp.(b) 19,920 $ 369
Lexmark International, Inc.
Class A(b) 895 31
Network Appliance, Inc.(b) 3,270 82
QLogic Corp.(b) 1,300 18
SanDisk Corp.(b) 2,160 72
-------
572
-------
CONSTRUCTION & ENGINEERING--0.2%
Fluor Corp. 835 122
Jacobs Engineering
Group, Inc.(b) 1,128 108
-------
230
-------
CONSTRUCTION & FARM MACHINERY &
HEAVY TRUCKS--1.0%
Caterpillar, Inc. 6,050 439
Cummins, Inc. 987 126
Deere & Co. 4,200 391
Manitowoc Co., Inc. (The) 1,230 60
PACCAR, Inc. 3,523 192
Terex Corp.(b) 965 63
-------
1,271
-------
CONSTRUCTION MATERIALS--0.1%
Vulcan Materials Co. 1,030 81
-------
CONSUMER ELECTRONICS--0.0%
Harman International Industries,
Inc. 570 42
-------
CONSUMER FINANCE--0.7%
American Express Co. 11,100 578
Capital One Financial Corp. 3,710 175
Discover Financial Services 4,518 68
SLM Corp. 5,106 103
-------
924
-------
DATA PROCESSING & OUTSOURCED SERVICES--0.8%
Affiliated Computer Services,
Inc. Class A(b) 938 42
Automatic Data Processing,
Inc. 5,000 223
Computer Sciences Corp.(b) 1,639 81
Convergys Corp.(b) 1,240 20
Electronic Data Systems Corp. 4,860 101
Fidelity National Information
Services, Inc. 1,609 67
Fiserv, Inc.(b) 1,579 88
Metavante Technologies, Inc.(b) 861 20
Paychex, Inc. 3,170 115
Western Union Co. (The) 7,130 173
-------
930
-------
DEPARTMENT STORES--0.4%
Dillard's, Inc. Class A 540 10
Kohl's Corp.(b) 2,980 137
Macy's, Inc. 4,104 106
Nordstrom, Inc. 1,790 66
Penney (J.C.) Co., Inc. 2,099 92
Sears Holdings Corp.(b) 690 70
-------
481
-------
VALUE
SHARES (000)
------- --------
DISTILLERS & VINTNERS--0.1%
Brown-Forman Corp. Class B 819 $ 61
Constellation Brands, Inc.
Class A(b) 1,828 43
-------
104
-------
DISTRIBUTORS--0.1%
Genuine Parts Co. 1,613 75
-------
DIVERSIFIED BANKS--1.8%
Comerica, Inc. 1,449 63
U.S. Bancorp 16,400 521
Wachovia Corp. 18,760 713
Wells Fargo & Co. 32,040 967
-------
2,264
-------
DIVERSIFIED CHEMICALS--0.8%
Ashland, Inc. 529 25
Dow Chemical Co. (The) 8,992 355
E.I. du Pont de Nemours
& Co. 8,540 377
Eastman Chemical Co. 770 47
Hercules, Inc. 1,103 21
PPG Industries, Inc. 1,554 109
-------
934
-------
DIVERSIFIED COMMERCIAL &
PROFESSIONAL SERVICES--0.1%
Cintas Corp. 1,276 43
Equifax, Inc. 1,250 45
-------
88
-------
DIVERSIFIED METALS & MINING--0.3%
Freeport-McMoRan Copper
& Gold, Inc. (Indonesia)(c) 3,613 370
Titanium Metals Corp. 830 22
-------
392
-------
DIVERSIFIED REITS--0.1%
Vornado Realty Trust 1,266 111
-------
DRUG RETAIL--0.7%
CVS Caremark Corp. 14,016 557
Walgreen Co. 9,404 358
-------
915
-------
EDUCATION SERVICES--0.1%
Apollo Group, Inc. Class A(b) 1,300 91
-------
ELECTRIC UTILITIES--2.1%
Allegheny Energy, Inc. 1,569 100
American Electric Power Co.,
Inc. 3,800 177
Duke Energy Corp. 11,970 241
Edison International 3,083 165
Entergy Corp. 1,853 221
Exelon Corp. 6,270 512
FirstEnergy Corp. 2,884 209
FPL Group, Inc. 3,870 262
Pepco Holdings, Inc. 1,900 56
VALUE
SHARES (000)
------- --------
ELECTRIC UTILITIES--CONTINUED
Pinnacle West Capital Corp. 949 $ 40
PPL Corp. 3,530 184
Progress Energy, Inc. 2,451 119
Southern Co. (The) 7,210 279
-------
2,565
-------
ELECTRICAL COMPONENTS & EQUIPMENT--0.5%
Cooper Industries Ltd. Class A 1,733 91
Emerson Electric Co. 7,497 425
Rockwell Automation, Inc. 1,420 98
-------
614
-------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.1%
Agilent Technologies, Inc.(b) 3,659 134
-------
ELECTRONIC MANUFACTURING SERVICES--0.2%
Jabil Circuit, Inc. 1,965 30
Molex, Inc. 1,360 37
Tyco Electronics Ltd. 4,706 175
-------
242
-------
ENVIRONMENTAL & FACILITIES SERVICES--0.2%
Allied Waste Industries, Inc.(b) 2,730 30
Waste Management, Inc. 4,830 158
-------
188
-------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.5%
Monsanto Co. 5,190 580
-------
FOOD DISTRIBUTORS--0.1%
SYSCO Corp. 5,773 180
-------
FOOD RETAIL--0.4%
Kroger Co. (The) 6,470 173
Safeway, Inc. 4,200 144
SUPERVALU, Inc. 1,989 74
Whole Foods Market, Inc. 1,316 54
-------
445
-------
FOOTWEAR--0.2%
NIKE, Inc. Class B 3,660 235
-------
FOREST PRODUCTS--0.1%
Weyerhaeuser Co. 1,990 147
-------
GAS UTILITIES--0.1%
Nicor, Inc. 427 18
Questar Corp. 1,632 88
-------
106
-------
GENERAL MERCHANDISE STORES--0.4%
Big Lots, Inc.(b) 860 14
Family Dollar Stores, Inc. 1,330 26
Target Corp. 7,890 394
-------
434
-------
GOLD--0.2%
Newmont Mining Corp. 4,269 208
-------
See Notes to Financial Statements
90
PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES
VALUE
SHARES (000)
------- --------
HEALTH CARE DISTRIBUTORS--0.4%
AmerisourceBergen Corp. 1,590 $ 71
Cardinal Health, Inc. 3,450 199
McKesson Corp. 2,750 180
Patterson Cos., Inc.(b) 1,317 45
-------
495
-------
HEALTH CARE EQUIPMENT--1.7%
Bard (C.R.), Inc. 977 93
Baxter International, Inc. 6,020 350
Becton, Dickinson & Co. 2,304 193
Boston Scientific Corp. 12,740 148
Covidien Ltd. 4,706 208
Hospira, Inc.(b) 1,488 63
Medtronic, Inc. 10,734 540
St. Jude Medical, Inc.(b) 3,227 131
Stryker Corp. 2,246 168
Varian Medical Systems, Inc.(b) 1,197 62
Zimmer Holdings, Inc.(b) 2,241 148
-------
2,104
-------
HEALTH CARE FACILITIES--0.0%
Tenet Healthcare Corp.(b) 4,485 23
-------
HEALTH CARE SERVICES--0.5%
Express Scripts, Inc.(b) 2,390 175
Laboratory Corp. of America
Holdings(b) 1,113 84
Medco Health Solutions, Inc.(b) 2,563 260
Quest Diagnostics, Inc. 1,480 78
-------
597
-------
HEALTH CARE TECHNOLOGY--0.0%
IMS Health, Inc. 1,846 43
-------
HOME ENTERTAINMENT SOFTWARE--0.1%
Electronic Arts, Inc.(b) 2,990 175
-------
HOME FURNISHINGS--0.0%
Leggett & Platt, Inc. 1,620 28
-------
HOME IMPROVEMENT RETAIL--0.7%
Home Depot, Inc. (The) 16,030 432
Lowe's Cos., Inc. 13,890 314
Sherwin-Williams Co. (The) 990 58
-------
804
-------
HOMEBUILDING--0.1%
Centex Corp. 1,131 28
Horton (D.R.), Inc. 2,630 35
KB Home 727 16
Lennar Corp. Class A 1,318 24
Pulte Homes, Inc. 2,011 21
-------
124
-------
HOMEFURNISHING RETAIL--0.1%
Bed Bath & Beyond, Inc.(b) 2,510 74
-------
HOTELS, RESORTS & CRUISE LINES--0.3%
Carnival Corp. 4,130 184
Marriott International, Inc.
Class A 2,970 101
VALUE
SHARES (000)
------- --------
HOTELS, RESORTS & CRUISE LINES--CONTINUED
Starwood Hotels & Resorts
Worldwide, Inc. 1,890 $ 83
Wyndham Worldwide Corp. 1,691 40
-------
408
-------
HOUSEHOLD APPLIANCES--0.1%
Black & Decker Corp. (The) 590 41
Snap-On, Inc. 549 26
Stanley Works (The) 777 38
Whirlpool Corp. 747 61
-------
166
-------
HOUSEHOLD PRODUCTS--2.4%
Clorox Co. (The) 1,310 86
Colgate-Palmolive Co. 4,827 376
Kimberly-Clark Corp. 4,036 280
Procter & Gamble Co. (The) 29,490 2,165
-------
2,907
-------
HOUSEWARES & SPECIALTIES--0.1%
Fortune Brands, Inc. 1,446 105
Newell Rubbermaid, Inc. 2,650 68
-------
173
-------
HUMAN RESOURCES & EMPLOYMENT SERVICES--0.1%
Monster Worldwide, Inc.(b) 1,210 39
Robert Half International, Inc. 1,552 42
-------
81
-------
HYPERMARKETS & SUPER CENTERS--1.1%
Costco Wholesale Corp. 4,120 287
Wal-Mart Stores, Inc. 22,440 1,067
-------
1,354
-------
INDEPENDENT POWER PRODUCERS &
ENERGY TRADERS--0.3%
AES Corp. (The) 6,360 136
Constellation Energy Group,
Inc. 1,710 175
Dynegy, Inc. Class A(b) 4,690 34
-------
345
-------
INDUSTRIAL CONGLOMERATES--3.6%
3M Co. 6,775 571
General Electric Co.(d) 95,970 3,558
Textron, Inc. 2,364 168
Tyco International Ltd. 4,706 187
-------
4,484
-------
INDUSTRIAL GASES--0.4%
Air Products and Chemicals,
Inc. 2,050 202
Praxair, Inc. 3,000 266
-------
468
-------
INDUSTRIAL MACHINERY--0.7%
Danaher Corp. 2,400 211
Dover Corp. 1,890 87
Eaton Corp. 1,386 134
VALUE
SHARES (000)
------- --------
INDUSTRIAL MACHINERY--CONTINUED
Illinois Tool Works, Inc. 3,930 $ 210
ITT Corp. 1,720 114
Pall Corp. 1,161 47
Parker Hannifin Corp. 1,600 120
-------
923
-------
INDUSTRIAL REITS--0.1%
ProLogis 2,428 154
-------
INSURANCE BROKERS--0.2%
AON Corp. 2,779 132
Marsh & McLennan Cos., Inc. 4,940 131
-------
263
-------
INTEGRATED OIL & GAS--7.7%
Chevron Corp. 20,050 1,871
ConocoPhillips 15,190 1,341
Exxon Mobil Corp.(d) 51,880 4,861
Hess Corp. 2,619 264
Marathon Oil Corp. 6,740 410
Murphy Oil Corp. 1,780 151
Occidental Petroleum Corp. 7,863 606
-------
9,504
-------
INTEGRATED TELECOMMUNICATION SERVICES--3.2%
AT&T, Inc. 57,590 2,393
CenturyTel, Inc. 1,059 44
Citizens Communications Co. 3,110 40
Embarq Corp. 1,445 72
Qwest Communications
International, Inc.(b) 14,910 104
Verizon Communications, Inc. 27,469 1,200
Windstream Corp. 4,511 59
-------
3,912
-------
INTERNET RETAIL--0.3%
Amazon.com, Inc.(b) 2,920 271
Expedia, Inc.(b) 1,970 62
IAC/InterActiveCorp.(b) 1,750 47
-------
380
-------
INTERNET SOFTWARE & SERVICES--1.9%
Akamai Technologies, Inc.(b) 1,561 54
eBay, Inc.(b) 10,798 358
Google, Inc. Class A(b) 2,186 1,512
VeriSign, Inc.(b) 2,100 79
Yahoo!, Inc.(b) 12,690 295
-------
2,298
-------
INVESTMENT BANKING & BROKERAGE--2.0%
Bear Stearns Cos., Inc. (The) 1,099 97
Charles Schwab Corp. (The) 8,890 227
E*TRADE Financial Corp.(b) 4,025 14
Goldman Sachs Group, Inc. (The) 3,780 813
Lehman Brothers Holdings, Inc. 5,024 329
Merrill Lynch & Co., Inc. 8,130 437
Morgan Stanley 10,080 535
-------
2,452
-------
See Notes to Financial Statements
91
PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES
VALUE
SHARES (000)
------- --------
IT CONSULTING & OTHER SERVICES--0.1%
Cognizant Technology
Solutions Corp. Class A(b) 2,760 $ 94
Unisys Corp.(b) 3,312 15
-------
109
-------
LEISURE PRODUCTS--0.1%
Brunswick Corp. 842 14
Hasbro, Inc. 1,400 36
Mattel, Inc. 3,480 66
-------
116
-------
LIFE & HEALTH INSURANCE--1.3%
AFLAC, Inc. 4,628 290
Lincoln National Corp. 2,562 149
MetLife, Inc. 7,031 433
Principal Financial Group,
Inc. (The) 2,480 171
Prudential Financial, Inc. 4,310 401
Torchmark Corp. 904 55
Unum Group 3,415 81
-------
1,580
-------
LIFE SCIENCES TOOLS & SERVICES--0.3%
Applera Corp. - Applied
Biosystems Group 1,600 54
Millipore Corp.(b) 511 38
PerkinElmer, Inc. 1,148 30
Thermo Fisher Scientific, Inc.(b) 4,010 231
Waters Corp.(b) 945 75
-------
428
-------
MANAGED HEALTH CARE--1.5%
Aetna, Inc. 4,750 274
CIGNA Corp. 2,650 142
Coventry Health Care, Inc.(b) 1,480 88
Humana, Inc.(b) 1,590 120
UnitedHealth Group, Inc. 12,270 714
WellPoint, Inc.(b) 5,415 475
-------
1,813
-------
METAL & GLASS CONTAINERS--0.1%
Ball Corp. 967 43
Pactiv Corp.(b) 1,234 33
-------
76
-------
MOTORCYCLE MANUFACTURERS--0.1%
Harley-Davidson, Inc. 2,290 107
-------
MOVIES & ENTERTAINMENT--1.5%
News Corp. Class A 21,970 450
Time Warner, Inc. 34,320 567
Viacom, Inc. Class B(b) 6,230 273
Walt Disney Co. (The) 18,080 584
-------
1,874
-------
MULTI-LINE INSURANCE--1.7%
American International Group, Inc. 24,080 1,404
Assurant, Inc. 914 61
Genworth Financial, Inc.
Class A 4,190 106
VALUE
SHARES (000)
------- --------
MULTI-LINE INSURANCE--CONTINUED
Hartford Financial Services
Group, Inc. (The) 2,980 $ 260
Loews Corp. 4,170 210
-------
2,041
-------
MULTI-SECTOR HOLDINGS--0.1%
Leucadia National Corp. 1,610 76
-------
MULTI-UTILITIES--1.1%
Ameren Corp. 1,965 107
CenterPoint Energy, Inc. 3,035 52
CMS Energy Corp. 2,125 37
Consolidated Edison, Inc. 2,557 125
Dominion Resources, Inc. 5,550 263
DTE Energy Co. 1,550 68
Integrys Energy Group, Inc. 717 37
NiSource, Inc. 2,593 49
PG&E Corp. 3,345 144
Public Service Enterprise
Group, Inc. 2,407 236
Sempra Energy 2,497 155
TECO Energy, Inc. 1,993 34
Xcel Energy, Inc. 3,974 90
-------
1,397
-------
OFFICE ELECTRONICS--0.1%
Xerox Corp. 8,780 142
-------
OFFICE REITS--0.1%
Boston Properties, Inc. 1,127 103
-------
OFFICE SERVICES & SUPPLIES--0.1%
Avery Dennison Corp. 1,009 54
Pitney Bowes, Inc. 2,079 79
-------
133
-------
OIL & GAS DRILLING--0.6%
ENSCO International, Inc. 1,401 84
Noble Corp. 2,536 143
Rowan Cos., Inc. 1,048 42
Transocean, Inc. 3,020 432
-------
701
-------
OIL & GAS EQUIPMENT & SERVICES--1.0%
Baker Hughes, Inc. 3,031 246
BJ Services Co. 2,760 67
Halliburton Co. 8,370 317
National Oilwell Varco, Inc.(b) 3,390 249
Smith International, Inc. 1,897 140
Weatherford International
Ltd.(b) 3,191 219
-------
1,238
-------
OIL & GAS EXPLORATION & PRODUCTION--1.5%
Anadarko Petroleum Corp. 4,430 291
Apache Corp. 3,134 337
Chesapeake Energy Corp. 4,310 169
Devon Energy Corp. 4,222 375
EOG Resources, Inc. 2,340 209
Noble Energy, Inc. 1,630 130
VALUE
SHARES (000)
------- --------
OIL & GAS EXPLORATION & PRODUCTION--CONTINUED
Range Resources Corp. 1,420 $ 73
XTO Energy, Inc. 4,590 236
-------
1,820
-------
OIL & GAS REFINING & MARKETING--0.4%
Sunoco, Inc. 1,139 83
Tesoro Corp. 1,300 62
Valero Energy Corp. 5,242 367
-------
512
-------
OIL & GAS STORAGE & TRANSPORTATION--0.4%
El Paso Corp. 6,650 115
Spectra Energy Corp. 5,978 154
Williams Cos., Inc. (The) 5,640 202
-------
471
-------
OTHER DIVERSIFIED FINANCIAL SERVICES--3.7%
Bank of America Corp. 42,150 1,739
Citigroup, Inc. 47,410 1,396
JPMorgan Chase & Co. 31,900 1,392
-------
4,527
-------
PACKAGED FOODS & MEATS--1.2%
Campbell Soup Co. 2,127 76
ConAgra Foods, Inc. 4,636 110
Dean Foods Co. 1,230 32
General Mills, Inc. 3,210 183
Heinz (H.J.) Co. 3,021 141
Hershey Co. (The) 1,601 63
Kellogg Co. 2,511 132
Kraft Foods, Inc. Class A 14,690 479
McCormick & Co., Inc. 1,232 47
Sara Lee Corp. 6,858 110
Tyson Foods, Inc. Class A 2,604 40
Wrigley (Wm.) Jr. Co. 2,057 120
-------
1,533
-------
PAPER PACKAGING--0.0%
Bemis Co., Inc. 950 26
Sealed Air Corp. 1,529 35
-------
61
-------
PAPER PRODUCTS--0.2%
International Paper Co. 4,067 132
MeadWestvaco Corp. 1,745 54
-------
186
-------
PERSONAL PRODUCTS--0.2%
Avon Products, Inc. 4,070 161
Estee Lauder Cos., Inc. (The)
Class A 1,086 47
-------
208
-------
PHARMACEUTICALS--6.2%
Abbott Laboratories 14,670 824
Allergan, Inc. 2,909 187
Barr Pharmaceuticals, Inc.(b) 1,015 54
Bristol-Myers Squibb Co. 18,790 498
Forest Laboratories, Inc.(b) 2,960 108
Johnson & Johnson 27,170 1,812
See Notes to Financial Statements
92
PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES
VALUE
SHARES (000)
------- --------
PHARMACEUTICALS--CONTINUED
King Pharmaceuticals, Inc.(b) 2,305 $ 24
Lilly (Eli) & Co. 9,370 500
Merck & Co., Inc. 20,670 1,201
Mylan, Inc. 2,870 40
Pfizer, Inc. 64,850 1,474
Schering-Plough Corp. 15,380 410
Watson Pharmaceuticals, Inc.(b) 970 26
Wyeth 12,727 563
-------
7,721
-------
PHOTOGRAPHIC PRODUCTS--0.0%
Eastman Kodak Co. 2,722 60
-------
PROPERTY & CASUALTY INSURANCE--0.9%
Allstate Corp. (The) 5,420 283
AMBAC Financial Group, Inc. 965 25
Chubb Corp. (The) 3,640 199
Cincinnati Financial Corp. 1,580 63
MBIA, Inc. 1,198 22
Progressive Corp. (The) 6,630 127
Safeco Corp. 900 50
Travelers Cos., Inc. (The) 6,120 329
-------
1,098
-------
PUBLISHING--0.3%
Gannett Co., Inc. 2,205 86
Gemstar-TV Guide
International, Inc.(b) 247 1
McGraw-Hill Cos., Inc. (The) 3,120 137
Meredith Corp. 369 20
New York Times Co. (The)
Class A 1,362 24
Washington Post Co. (The)
Class B 100 79
-------
347
-------
RAILROADS--0.7%
Burlington Northern Santa Fe
Corp. 2,844 237
CSX Corp. 3,990 175
Norfolk Southern Corp. 3,680 186
Union Pacific Corp. 2,490 313
-------
911
-------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.0%
CB Richard Ellis Group, Inc.
Class A(b) 1,866 40
-------
REGIONAL BANKS--1.1%
BB&T Corp. 5,224 160
Commerce Bancorp, Inc. 1,850 71
Fifth Third Bancorp 5,071 127
First Horizon National Corp. 1,190 22
Huntington Bancshares, Inc. 3,464 51
KeyCorp 3,685 86
M&T Bank Corp. 718 59
Marshall & Ilsley Corp. 2,440 65
National City Corp. 6,020 99
PNC Financial Services Group,
Inc. (The) 3,320 218
Regions Financial Corp. 6,600 156
VALUE
SHARES (000)
------- --------
REGIONAL BANKS--CONTINUED
SunTrust Banks, Inc. 3,304 $ 206
Zions Bancorp 1,018 48
-------
1,368
-------
RESIDENTIAL REITS--0.2%
Apartment Investment
& Management Co. Class A 920 32
AvalonBay Communities, Inc. 755 71
Equity Residential 2,570 94
-------
197
-------
RESTAURANTS--0.8%
Darden Restaurants, Inc. 1,338 37
McDonald's Corp. 11,230 662
Starbucks Corp.(b) 6,940 142
Wendy's International, Inc. 826 21
Yum! Brands, Inc. 4,830 185
-------
1,047
-------
RETAIL REITS--0.3%
Developers Diversified Realty
Corp. 1,182 45
General Growth Properties, Inc. 2,325 96
Kimco Realty Corp. 2,387 87
Simon Property Group, Inc. 2,114 184
-------
412
-------
SEMICONDUCTOR EQUIPMENT--0.5%
Applied Materials, Inc. 13,090 233
KLA-Tencor Corp. 1,730 83
MEMC Electronic Materials,
Inc.(b) 2,180 193
Novellus Systems, Inc.(b) 1,100 30
Teradyne, Inc.(b) 1,650 17
-------
556
-------
SEMICONDUCTORS--2.2%
Advanced Micro Devices, Inc.(b) 5,730 43
Altera Corp. 3,190 62
Analog Devices, Inc. 2,880 91
Broadcom Corp. Class A(b) 4,470 117
Intel Corp. 55,520 1,480
Linear Technology Corp. 2,101 67
LSI Corp. 6,700 36
Microchip Technology, Inc. 2,030 64
Micron Technology, Inc.(b) 7,220 52
National Semiconductor Corp. 2,230 50
NVIDIA Corp.(b) 5,280 180
Texas Instruments, Inc. 13,280 443
Xilinx, Inc. 2,801 61
-------
2,746
-------
SOFT DRINKS--2.0%
Coca-Cola Co. (The) 18,870 1,158
Coca-Cola Enterprises, Inc. 2,699 70
Pepsi Bottling Group, Inc.
(The) 1,327 52
PepsiCo, Inc. 15,293 1,161
-------
2,441
-------
VALUE
SHARES (000)
------- --------
SPECIALIZED CONSUMER SERVICES--0.0%
Block (H&R), Inc. 3,073 $ 57
-------
SPECIALIZED FINANCE--0.7%
CIT Group, Inc. 1,815 44
CME Group, Inc. 503 345
IntercontinentalExchange,
Inc.(b) 660 127
Moody's Corp. 2,040 73
NYSE Euronext 2,520 221
-------
810
-------
SPECIALIZED REITS--0.2%
Host Hotels & Resorts, Inc. 4,939 84
Plum Creek Timber Co., Inc. 1,653 76
Public Storage, Inc. 1,162 86
-------
246
-------
SPECIALTY CHEMICALS--0.2%
Ecolab, Inc. 1,649 85
International Flavors
& Fragrances, Inc. 770 37
Rohm & Haas Co. 1,190 63
Sigma-Aldrich Corp. 1,243 68
-------
253
-------
SPECIALTY STORES--0.2%
Office Depot, Inc.(b) 2,582 36
OfficeMax, Inc. 713 15
Staples, Inc. 6,710 155
Tiffany & Co. 1,294 59
-------
265
-------
STEEL--0.3%
Allegheny Technologies, Inc. 967 84
Nucor Corp. 2,725 161
United States Steel Corp. 1,120 135
-------
380
-------
SYSTEMS SOFTWARE--3.1%
BMC Software, Inc.(b) 1,860 66
CA, Inc. 3,720 93
Microsoft Corp. 76,400 2,720
Novell, Inc.(b) 3,311 23
Oracle Corp.(b) 37,450 845
Symantec Corp.(b) 8,240 133
-------
3,880
-------
THRIFTS & MORTGAGE FINANCE--0.7%
Countrywide Financial Corp. 5,500 49
Fannie Mae 9,290 372
Freddie Mac 6,280 214
Hudson City Bancorp, Inc. 4,940 74
MGIC Investment Corp. 776 17
Sovereign Bancorp, Inc. 3,401 39
Washington Mutual, Inc. 8,250 112
-------
877
-------
TIRES & RUBBER--0.1%
Goodyear Tire & Rubber Co.
(The)(b) 2,280 64
-------
See Notes to Financial Statements
93
PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES
VALUE
SHARES (000)
------- --------
TOBACCO--1.4%
Altria Group, Inc. 20,000 $ 1,511
Reynolds American, Inc. 1,619 107
UST, Inc. 1,490 82
-------
1,700
-------
TRADING COMPANIES & DISTRIBUTORS--0.0%
Grainger (W.W.), Inc. 640 56
-------
TRUCKING--0.0%
Ryder System, Inc. 566 27
-------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
American Tower Corp. Class A 3,840 163
Sprint Nextel Corp. 27,010 355
-------
518
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $89,506) 120,551
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS(c)--1.3%
INDUSTRIAL MACHINERY--0.1%
Ingersoll-Rand Co., Ltd. Class A
(United States) 2,590 120
-------
OIL & GAS DRILLING--0.1%
Nabors Industries Ltd.
(United States)(b) 2,690 74
-------
OIL & GAS EQUIPMENT & SERVICES--0.9%
Schlumberger Ltd.
(Netherlands) 11,360 1,118
-------
PROPERTY & CASUALTY INSURANCE--0.2%
ACE Ltd. (United States) 3,114 192
XL Capital Ltd. Class A
(United States) 1,690 85
-------
277
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $773) 1,589
- ----------------------------------------------------------------------------
RIGHTS--0.0%
COMPUTER STORAGE & PERIPHERALS--0.0%
Seagate Technology Tax Refund
Rights(b)(e) 7,900 $ 0
- ----------------------------------------------------------------------------
TOTAL RIGHTS
(IDENTIFIED COST $0) 0
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--98.8%
(IDENTIFIED COST $90,279) 122,140
- ----------------------------------------------------------------------------
PAR
VALUE
(000)
-------
SHORT-TERM INVESTMENTS--1.2%
REPURCHASE AGREEMENTS--1.2%
State Street Bank and
Trust Co. repurchase
agreement 1.10% dated
12/31/07, due 1/2/08,
repurchase price $1,520
collateralized by U.S.
Treasury Bond 5%,
5/15/37 market value
$1,551 $1,520 1,520
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $1,520) 1,520
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.0%
(IDENTIFIED COST $91,799) 123,660(a)
Other assets and liabilities, net--0.0% (16)
--------
NET ASSETS--100.0% $123,644
========
At December 31, 2007, the Fund had entered into futures contracts as follows
(reported in 000's):
Value of Market Unrealized
Number of Contracts Value of Appreciation
Expiration Date Contracts When Opened Contracts (Depreciation)
---------------- ---------- ------------- ------------ --------------
S&P 500(R) Index March-08 23 $1,700 $1,699 $(1)
(a) Federal Income Tax Information (reported in 000's): Net unrealized
appreciation of investment securities is comprised of gross appreciation of
$33,799 and gross depreciation of $4,865 for federal income tax purposes.
At December 31, 2007, the aggregate cost of securities for federal income
tax purposes was $94,726.
(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) All or a portion segregated as collateral for futures contracts.
(e) Illiquid and restricted security. Security valued at fair value as
determined in good faith by or under the direction of the Trustees. At
December 31, 2007, this security amounted to a value of $0 or 0% of
(reported in 000's) net assets. For acquisition information, see Note 6
"Illiquid and Restricted Securities" in the Notes to Financial Statements.
(f) Value less than $1,000.
See Notes to Financial Statements
94
THIS PAGE INTENTIONALLY BLANK.
THE PHOENIX EDGE SERIES FUND
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2007
(Reported in thousands except per share amounts)
CAPITAL GROWTH GROWTH AND INCOME MID-CAP GROWTH MONEY MARKET
SERIES SERIES SERIES SERIES
-------------- ----------------- -------------- ------------
ASSETS
Investment securities at value+@ ........................ $ 426,798 $158,490 $ 87,509 $167,856
Foreign currency at value* .............................. -- -- -- --
Cash .................................................... 1 -- --# 13
Receivables
Investment securities sold ............................ -- 354 363 3
Fund shares sold ...................................... --# 173 --# 1,317
Dividends ............................................. 324 186 28 --
Interest .............................................. -- -- --# 435
Tax reclaims .......................................... 9 -- -- --
Prepaid expenses ........................................ 38 16 8 14
Other assets ............................................ 31 12 7 13
--------- -------- -------- --------
Total assets ................................... 427,201 159,231 87,915 169,651
--------- -------- -------- --------
LIABILITIES
Cash overdraft .......................................... -- 1 -- --
Payables
Fund shares repurchased ............................... 221 -- 106 88
Investment securities purchased ....................... -- -- 444 --
Upon return of securities loaned ...................... 25,980 -- -- --
Investment advisory fee ............................... 234 79 60 58
Administration fee .................................... 29 11 6 5
Service fee ........................................... 23 9 5 9
Trustees' fee ......................................... 9 4 2 4
Trustee deferred compensation plan .................... 31 12 7 13
Professional fee ...................................... 28 26 25 23
Unrealized depreciation on forward currency contracts . -- -- -- --
Other accrued expenses ................................ 34 15 7 14
--------- -------- -------- --------
Total liabilities .............................. 26,589 157 662 214
--------- -------- -------- --------
NET ASSETS ................................................ $ 400,612 $159,074 $ 87,253 $169,437
========= ======== ======== ========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ........ $ 617,818 $121,941 $173,269 $169,444
Undistributed net investment income
(accumulated net investment loss) ..................... 57 198 (8) --#
Accumulated net realized gain (loss) .................... (287,829) 964 (94,817) (7)
Net unrealized appreciation (depreciation) .............. 70,566 35,971 8,809 --
--------- -------- -------- --------
NET ASSETS ................................................ $ 400,612 $159,074 $ 87,253 $169,437
========= ======== ======== ========
Net asset value and offering price per share ............ $ 16.81 $ 14.94 $ 16.40 $ 10.00
========= ======== ======== ========
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization ............................... 23,838 10,647 5,321 16,944
========= ======== ======== ========
+Investment securities at cost ........................... 356,232 122,519 78,700 167,856
*Foreign currency at cost ................................ -- -- -- --
@Including market value of securities on loan ............ 33,609 -- -- --
#Amount is less than $1,000.
MULTI-SECTOR MULTI-SECTOR ABERDEEN
FIXED INCOME SHORT TERM BOND STRATEGIC ALLOCATION INTERNATIONAL
SERIES SERIES SERIES SERIES
-------------- --------------- -------------------- -------------
ASSETS
Investment securities at value+@ ........................ $282,212 $43,985 $270,246 $504,910
Foreign currency at value* .............................. 3 46 --# 1,154
Cash .................................................... 961 164 21 2
Receivables
Investment securities sold ............................ 456 169 40 --
Fund shares sold ...................................... 77 -- -- --
Dividends ............................................. 67 3 188 984
Interest .............................................. 3,540 380 918 --
Tax reclaims .......................................... -- -- -- 198
Prepaid expenses ........................................ 22 4 26 42
Other assets ............................................ 19 3 21 38
-------- ------- -------- --------
Total assets ................................... 287,357 44,754 271,460 507,328
-------- ------- -------- --------
LIABILITIES
Cash overdraft .......................................... -- -- -- --
Payables
Fund shares repurchased ............................... 488 91 152 1,147
Investment securities purchased ....................... 2,654 415 212 2,378
Upon return of securities loaned ...................... 33,024 -- 174 1,386
Investment advisory fee ............................... 106 12 138 308
Administration fee .................................... 17 3 19 34
Service fee ........................................... 14 2 15 28
Trustees' fee ......................................... 6 1 6 11
Trustee deferred compensation plan .................... 19 3 21 38
Professional fee ...................................... 28 29 29 27
Unrealized depreciation on forward currency contracts . 101 18 -- --
Other accrued expenses ................................ 33 12 41 58
-------- ------- -------- --------
Total liabilities .............................. 36,490 586 807 5,415
-------- ------- -------- --------
NET ASSETS ................................................ $250,867 $44,168 $270,653 $501,913
======== ======= ======== ========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ........ $269,703 $44,934 $240,321 $373,992
Undistributed net investment income
(accumulated net investment loss) ..................... 2,144 363 962 428
Accumulated net realized gain (loss) .................... (19,026) (502) 1,907 18,424
Net unrealized appreciation (depreciation) .............. (1,954) (627) 27,463 109,069
-------- ------- -------- --------
NET ASSETS ................................................ $250,867 $44,168 $270,653 $501,913
======== ======= ======== ========
Net asset value and offering price per share ............ $ 9.09 $ 9.87 $ 12.95 $ 19.14
======== ======= ======== ========
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization ............................... 27,613 4,477 20,894 26,219
======== ======= ======== ========
+Investment securities at cost ........................... 284,076 44,594 242,785 395,834
*Foreign currency at cost ................................ 3 46 -- 1,154
@Including market value of securities on loan ............ 31,536 -- 169 1,300
#Amount is less than $1,000.
ALGER
SMALL-CAP GROWTH
SERIES
----------------
ASSETS
Investment securities at value+@ ........................ $55,879
Foreign currency at value* .............................. --
Cash .................................................... 38
Receivables
Investment securities sold ............................ 404
Fund shares sold ...................................... 18
Dividends ............................................. 18
Interest .............................................. --
Tax reclaims .......................................... --
Prepaid expenses ........................................ 5
Other assets ............................................ 4
-------
Total assets ................................... 56,366
-------
LIABILITIES
Cash overdraft .......................................... --
Payables
Fund shares repurchased ............................... 71
Investment securities purchased ....................... 450
Upon return of securities loaned ...................... --
Investment advisory fee ............................... 31
Administration fee .................................... 4
Service fee ........................................... 3
Trustees' fee ......................................... 1
Trustee deferred compensation plan .................... 4
Professional fee ...................................... 28
Unrealized depreciation on forward currency contracts . --
Other accrued expenses ................................ 6
-------
Total liabilities .............................. 598
-------
NET ASSETS ................................................ $55,768
=======
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ........ $42,738
Undistributed net investment income
(accumulated net investment loss) ..................... (7)
Accumulated net realized gain (loss) .................... 1,157
Net unrealized appreciation (depreciation) .............. 11,880
-------
NET ASSETS ................................................ $55,768
=======
Net asset value and offering price per share ............ $ 17.85
=======
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization ............................... 3,124
=======
+Investment securities at cost ........................... 43,999
*Foreign currency at cost ................................ --
@Including market value of securities on loan ............ --
#Amount is less than $1,000.
See Notes to Financial Statements
96 and 97
THE PHOENIX EDGE SERIES FUND
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 2007
(Reported in thousands except per share amounts)
S&P S&P S&P
DUFF & PHELPS DYNAMIC ASSET DYNAMIC ASSET DYNAMIC ASSET
REAL ESTATE SECURITIES ALLOCATION SERIES: ALLOCATION SERIES: ALLOCATION SERIES:
SERIES AGGRESSIVE GROWTH GROWTH MODERATE
---------------------- ------------------ ------------------ ------------------
ASSETS
Investment securities at value+ .................. $133,700 $23,279 $ 36,278 $7,338
Cash ............................................. -- 26 4 22
Receivables
Investment securities sold ..................... 140 21 41 32
Fund shares sold ............................... 1,038 164 10 --
Receivable from adviser ........................ -- -- -- 6
Dividends ...................................... 983 198 268 40
Interest ....................................... -- -- -- --
Prepaid expenses ................................. 14 2 2 --
Other assets ..................................... 10 2 3 1
-------- ------- -------- ------
Total assets ............................ 135,885 23,692 36,606 7,439
-------- ------- -------- ------
LIABILITIES
Payables
Fund shares repurchased ........................ -- 2 3 8
Investment securities purchased ................ 589 232 372 68
Investment advisory fee ........................ 87 2 2 --
Administration fee ............................. 10 2 2 --
Service fee .................................... 8 1 2 --
Trustees' fee .................................. 4 1 1 --
Trustee deferred compensation plan ............. 10 2 3 1
Professional fee ............................... 25 17 17 17
Distribution and service fee ................... -- 5 8 2
Variation margin for futures contracts ......... -- -- -- --
Other accrued expenses ......................... 12 2 7 6
-------- ------- -------- ------
Total liabilities ....................... 745 266 417 102
-------- ------- -------- ------
NET ASSETS ......................................... $135,140 $23,426 $36,189 $7,337
======== ======= ======== ======
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest.. $ 89,452 $21,986 $34,554 $7,057
Undistributed net investment income
(accumulated net investment loss) .............. 550 --# -- (1)
Accumulated net realized gain (loss) ............. 2,614 (411) (608) (41)
Net unrealized appreciation (depreciation) ....... 42,524 1,851 2,243 322
-------- ------- -------- ------
NET ASSETS ......................................... $135,140 $23,426 $ 36,189 $7,337
======== ======= ======== ======
Net asset value and offering price per share ..... $ 26.82 $ 11.86 $ 11.54 $10.86
======== ======= ======== ======
Shares of beneficial interest outstanding,
$1 par value, unlimited authorization .......... 5,038 1,975 3,136 676
======== ======= ======== ======
+Investment securities at cost ................... 91,176 21,428 34,035 7,016
#Amount is less than $1,000.
S&P VAN KAMPEN
DYNAMIC ASSET SANDFORD BERNSTEIN SANFORD BERNSTEIN VAN KAMPEN EQUITY 500
ALLOCATION SERIES: MID-CAP VALUE SMALL-CAP VALUE COMSTOCK INDEX
MODERATE GROWTH SERIES SERIES SERIES SERIES
------------------ ------------- --------------- -------- ----------
ASSETS
Investment securities at value+ ................. $19,740 $138,012 $73,091 $87,255 $123,660
Cash ............................................ 7 -- -- 90 --#
Receivables
Investment securities sold .................... 35 -- 250 -- 105
Fund shares sold .............................. -- 596 340 129 12
Receivable from adviser ....................... 2 -- -- -- --
Dividends ..................................... 133 139 89 93 179
Interest ...................................... -- 9 2 -- --#
Prepaid expenses ................................ 1 14 8 9 12
Other assets .................................... 2 11 6 7 10
------- -------- ------- ------- --------
Total assets ........................... 19,920 138,781 73,786 87,583 123,978
------- -------- ------- ------- --------
LIABILITIES
Payables
Fund shares repurchased ....................... 3 10 -- 52 115
Investment securities purchased ............... 199 325 434 52 104
Investment advisory fee ....................... -- 123 60 51 14
Administration fee ............................ 2 10 5 7 9
Service fee ................................... 1 8 4 5 7
Trustees' fee ................................. 1 3 2 2 3
Trustee deferred compensation plan ............ 2 11 6 7 10
Professional fee .............................. 17 25 25 25 26
Distribution and service fee .................. 4 -- -- -- --
Variation margin for futures contracts ........ -- -- -- -- 9
Other accrued expenses ........................ 6 12 8 10 37
------- -------- ------- ------- --------
Total liabilities ...................... 235 527 544 211 334
------- -------- ------- ------- --------
NET ASSETS ........................................ $19,685 $138,254 $73,242 $87,372 $123,644
======= ======== ======= ======= ========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest. $18,659 $127,073 $69,217 $81,621 $111,861
Undistributed net investment income
(accumulated net investment loss) ............. (1) 113 -- 89 209
Accumulated net realized gain (loss) ............ (278) 2,262 1,441 1,083 (20,286)
Net unrealized appreciation (depreciation) ...... 1,305 8,806 2,584 4,579 31,860
------- -------- ------- ------- --------
NET ASSETS ........................................ $19,685 $138,254 $73,242 $87,372 $123,644
======= ======== ======= ======= ========
Net asset value and offering price per share .... $ 11.30 $ 12.68 $ 14.46 $ 12.49 $ 13.21
======= ======== ======= ======= ========
Shares of beneficial interest outstanding,
$1 par value, unlimited authorization ......... 1,743 10,899 5,064 6,994 9,362
======= ======== ======= ======= ========
+Investment securities at cost .................. 18,435 129,206 70,507 82,676 91,798
#Amount is less than $1,000.
See Notes to Financial Statements
98 and 99
THE PHOENIX EDGE SERIES FUND
STATEMENTS OF OPERATIONS
DECEMBER 31, 2007
(Reported in thousands)
CAPITAL GROWTH GROWTH AND INCOME MID-CAP GROWTH MONEY MARKET
SERIES SERIES SERIES SERIES
-------------- ----------------- -------------- ------------
INVESTMENT INCOME
Dividends ............................................... $ 4,333 $ 3,084 $ 158 $ --
Interest ................................................ 348 85 119 8,707
Security lending ........................................ 68 -- -- --
Foreign taxes withheld .................................. -- -- -- --
------- ------- ------- ------
Total investment income ............................... 4,749 3,169 277 8,707
------- ------- ------- ------
EXPENSES
Investment advisory fee ................................. 2,869 1,177 703 655
Service fees ............................................ 279 111 58 108
Administration fee ...................................... 352 142 73 57
Custodian ............................................... 49 41 10 22
Printing ................................................ 46 17 7 --
Professional ............................................ 42 36 31 31
Trustees ................................................ 75 30 16 28
Miscellaneous ........................................... 118 45 20 35
------- ------- ------- ------
Total expenses ........................................ 3,830 1,599 918 936
Less expenses reimbursed by investment adviser .......... -- (170) -- --
Custodian fees paid indirectly .......................... (1) --# --# (2)
------- ------- ------- ------
Net expenses .......................................... 3,829 1,429 918 934
------- ------- ------- ------
NET INVESTMENT INCOME (LOSS) ............................ 920 1,740 (641) 7,773
------- ------- ------- ------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ................. 19,216 12,928 22,137 (7)
Net realized gain (loss) on foreign currency
transactions .......................................... -- -- 19 --
Net change in unrealized appreciation (depreciation)
on investments ........................................ 23,698 (3,858) (4,767) --
Net change in unrealized appreciation (depreciation)
on foreign currency translations ...................... --# -- -- --
------- ------- ------- ------
NET GAIN (LOSS) ON INVESTMENTS ............................ 42,914 9,070 17,389 (7)
------- ------- ------- ------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ....................................... $43,834 $10,810 $16,748 $7,766
======= ======= ======= ======
#Amount is less than $1,000.
MULTI-SECTOR MULTI-SECTOR ABERDEEN
FIXED INCOME SHORT TERM BOND STRATEGIC ALLOCATION INTERNATIONAL
SERIES SERIES SERIES SERIES
-------------- --------------- -------------------- -------------
INVESTMENT INCOME
Dividends ............................................... $ 120 $ 3 $ 3,108 $15,215
Interest ................................................ 15,564 2,674 7,031 502
Security lending ........................................ 39 -- 7 160
Foreign taxes withheld .................................. -- (1) -- (1,705)
------- ------ ------- -------
Total investment income ............................... 15,723 2,676 10,146 14,172
------- ------ ------- -------
EXPENSES
Investment advisory fee ................................. 1,231 226 1,736 3,348
Service fees ............................................ 162 30 193 304
Administration fee ...................................... 205 37 244 397
Custodian ............................................... 28 23 71 160
Printing ................................................ 28 -- 33 58
Professional ............................................ 38 31 40 45
Trustees ................................................ 44 8 52 80
Miscellaneous ........................................... 78 16 97 102
------- ------ ------- -------
Total expenses ........................................ 1,814 371 2,466 4,494
Less expenses reimbursed by investment adviser .......... -- (53) -- --
Custodian fees paid indirectly .......................... -- (2) (2) --
------- ------ ------- -------
Net expenses .......................................... 1,814 316 2,464 4,494
------- ------ ------- -------
NET INVESTMENT INCOME (LOSS) ............................ 13,909 2,360 7,682 9,678
------- ------ ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ................. 1,376 176 13,581 50,862
Net realized gain (loss) on foreign currency
transactions .......................................... (55) (14) (25) 195
Net change in unrealized appreciation (depreciation)
on investments ........................................ (6,255) (766) (3,863) 3,299
Net change in unrealized appreciation (depreciation)
on foreign currency translations ...................... (68) (7) 10 (20)
------- ------ ------- -------
NET GAIN (LOSS) ON INVESTMENTS ............................ (5,002) (611) 9,703 54,336
------- ------ ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ....................................... $ 8,907 $1,749 $17,385 $64,014
======= ====== ======= =======
#Amount is less than $1,000.
ALGER
SMALL-CAP GROWTH
SERIES
----------------
INVESTMENT INCOME
Dividends ............................................... $ 205
Interest ................................................ 15
Security lending ........................................ --
Foreign taxes withheld .................................. --#
------
Total investment income ............................... 220
------
EXPENSES
Investment advisory fee ................................. 491
Service fees ............................................ 38
Administration fee ...................................... 48
Custodian ............................................... 19
Printing ................................................ 3
Professional ............................................ 30
Trustees ................................................ 10
Miscellaneous ........................................... 13
------
Total expenses ........................................ 652
Less expenses reimbursed by investment adviser .......... (72)
Custodian fees paid indirectly .......................... (2)
------
Net expenses .......................................... 578
------
NET INVESTMENT INCOME (LOSS) ............................ (358)
------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ................. 6,995
Net realized gain (loss) on foreign currency
transactions .......................................... --
Net change in unrealized appreciation (depreciation)
on investments ........................................ 2,036
Net change in unrealized appreciation (depreciation)
on foreign currency translations ...................... --
------
NET GAIN (LOSS) ON INVESTMENTS ............................ 9,031
------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ....................................... $8,673
======
#Amount is less than $1,000.
See Notes to Financial Statements
100 and 101
THE PHOENIX EDGE SERIES FUND
STATEMENTS OF OPERATIONS (CONTINUED)
DECEMBER 31, 2007
(Reported in thousands)
S&P S&P
DUFF & PHELPS DYNAMIC ASSET DYNAMIC ASSET
REAL ESTATE SECURITIES ALLOCATION SERIES: ALLOCATION SERIES:
SERIES AGGRESSIVE GROWTH GROWTH
---------------------- ------------------ ------------------
INVESTMENT INCOME
Dividends ........................................... $ 4,031 $ 357 $ 620
Interest ............................................ 139 9 17
Foreign taxes withheld .............................. -- -- --
-------- ------ ------
Total investment income ........................... 4,170 366 637
-------- ------ ------
EXPENSES
Investment advisory fee ............................. 1,260 71 99
Service fees ........................................ 111 12 16
Administration fee .................................. 142 15 21
Distribution and service fees ....................... -- 44 62
Custodian ........................................... 27 14 25
Printing ............................................ 3 3 5
Professional ........................................ 33 21 21
Trustees ............................................ 31 3 4
Miscellaneous ....................................... 46 3 4
-------- ------ ------
Total expenses .................................... 1,653 186 257
Less expenses reimbursed by investment advisor ...... -- (60) (82)
Custodian fees paid indirectly ...................... (1) (2) (2)
-------- ------ ------
Net expenses ...................................... 1,652 124 173
-------- ------ ------
NET INVESTMENT INCOME (LOSS) ........................ 2,518 242 464
-------- ------ ------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ............. 12,272 (135) (246)
Net realized gain (loss) on futures ................. -- -- --
Net change in unrealized appreciation (depreciation)
on investments .................................... (40,714) 1,007 1,395
Net change in unrealized appreciation (depreciation)
on futures ........................................ -- -- --
-------- ------ ------
NET GAIN (LOSS) ON INVESTMENTS ........................ (28,442) 872 1,149
-------- ------ ------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................ $(25,924) $1,114 $1,613
======== ====== ======
# Amount is less than $1,000.
S&P S&P
DYNAMIC ASSET DYNAMIC ASSET SANDFORD BERNSTEIN
ALLOCATION SERIES: ALLOCATION SERIES: MID-CAP VALUE
MODERATE MODERATE GROWTH SERIES
------------------ ------------------ -------------
INVESTMENT INCOME
Dividends ........................................... $181 $ 429 $ 1,911
Interest ............................................ 2 8 139
Foreign taxes withheld .............................. -- -- (1)
---- ------ --------
Total investment income ........................... 183 437 2,049
---- ------ --------
EXPENSES
Investment advisory fee ............................. 21 62 1,527
Service fees ........................................ 3 10 96
Administration fee .................................. 4 13 122
Distribution and service fees ....................... 13 38 --
Custodian ........................................... 10 19 21
Printing ............................................ 5 5 17
Professional ........................................ 20 20 33
Trustees ............................................ 1 3 26
Miscellaneous ....................................... 1 3 41
---- ------ --------
Total expenses .................................... 78 173 1,883
Less expenses reimbursed by investment advisor ...... (41) (63) --
Custodian fees paid indirectly ...................... (1) (2) --#
---- ------ --------
Net expenses ...................................... 36 108 1,883
---- ------ --------
NET INVESTMENT INCOME (LOSS) ........................ 147 329 166
---- ------ --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ............. 68 (4) 15,998
Net realized gain (loss) on futures ................. -- -- --
Net change in unrealized appreciation (depreciation)
on investments .................................... 202 821 (13,080)
Net change in unrealized appreciation (depreciation)
on futures ........................................ -- -- --
---- ------ --------
NET GAIN (LOSS) ON INVESTMENTS ........................ 270 817 2,918
---- ------ --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................ $417 $1,146 $ 3,084
==== ====== ========
# Amount is less than $1,000.
SANFORD BERNSTEIN VAN KAMPEN VAN KAMPEN
SMALL-CAP VALUE COMSTOCK EQUITY 500 INDEX
SERIES SERIES SERIES
--------------- -------- ----------------
INVESTMENT INCOME
Dividends ........................................... $ 1,007 $ 2,365 $2,529
Interest ............................................ 67 273 57
Foreign taxes withheld .............................. (1) (25) --
-------- ------- ------
Total investment income ........................... 1,073 2,613 2,586
-------- ------- ------
EXPENSES
Investment advisory fee ............................. 885 715 574
Service fees ........................................ 56 67 89
Administration fee .................................. 71 86 113
Distribution and service fees ....................... -- -- --
Custodian ........................................... 17 29 98
Printing ............................................ 5 10 15
Professional ........................................ 31 32 32
Trustees ............................................ 15 18 24
Miscellaneous ....................................... 24 30 34
-------- ------- ------
Total expenses .................................... 1,104 987 979
Less expenses reimbursed by investment advisor ...... (8) (13) (203)
Custodian fees paid indirectly ...................... (1) (3) --#
-------- ------- ------
Net expenses ...................................... 1,095 971 776
-------- ------- ------
NET INVESTMENT INCOME (LOSS) ........................ (22) 1,642 1,810
-------- ------- ------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ............. 10,114 4,950 3,026
Net realized gain (loss) on futures ................. -- -- 168
Net change in unrealized appreciation (depreciation)
on investments .................................... (11,201) (8,000) 1,662
Net change in unrealized appreciation (depreciation)
on futures ........................................ -- -- (2)
-------- ------- ------
NET GAIN (LOSS) ON INVESTMENTS ........................ (1,087) (3,050) 4,854
-------- ------- ------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................ $ (1,109) $(1,408) $6,664
======== ======= ======
# Amount is less than $1,000.
See Notes to Financial Statements
102 and 103
THE PHOENIX EDGE SERIES FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Reported in thousands)
CAPITAL GROWTH SERIES GROWTH AND INCOME SERIES
------------------------------------- --------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ----------------- ----------------- -----------------
FROM OPERATIONS
Net investment income (loss) ....................... $ 920 $ 1,067 $ 1,740 $ 1,725
Net realized gain (loss) ........................... 19,216 49,361 12,928 3,645
Net change in unrealized appreciation (depreciation) 23,698 (39,918) (3,858) 18,508
-------- --------- -------- --------
Increase (decrease) in net assets resulting
from operations .................................. 43,834 10,510 10,810 23,878
-------- --------- -------- --------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................. (1,079) (859) (1,583) (1,683)
Net realized short-term gains ...................... -- -- -- --
Net realized long-term gains ....................... -- -- (4,017) --
-------- --------- -------- --------
Decrease in net assets from distributions to
shareholders ..................................... (1,079) (859) (5,600) (1,683)
-------- --------- -------- --------
FROM SHARE TRANSACTIONS
Sales of shares .................................... 11,405 9,731 8,108 8,364
Reinvestment of distributions ...................... 1,079 859 5,600 1,683
Proceeds in conjunction with Plan of Reorganization
(Note 11) ........................................ -- 61,017 -- 11,722
Shares repurchased ................................. (89,753) (108,534) (27,373) (17,473)
-------- --------- -------- --------
Increase (decrease) in net assets from share
transactions ..................................... (77,269) (36,927) (13,665) 4,296
-------- --------- -------- --------
Net increase (decrease) in net assets .............. (34,514) (27,276) (8,455) 26,491
NET ASSETS
Beginning of period ................................ 435,126 462,402 167,529 141,038
-------- --------- -------- --------
End of period ...................................... $400,612 $ 435,126 $159,074 $167,529
======== ========= ======== ========
Undistributed net investment income and
(accumulated net investment loss) ................ $ 57 $ 218 $ 198 $ 42
- ---------------------------------------------------- ------------------------------------ --------------------------------------
SHARES
Sales of shares .................................... 709 665 528 631
Reinvestment of distributions ...................... 64 56 371 122
Plan of Reorganization (Note 11) ................... -- 3,996 -- 836
Shares repurchased ................................. (5,536) (7,426) (1,794) (1,313)
-------- --------- -------- --------
Net Increase / (Decrease) .......................... (4,763) (2,709) (895) 276
======== ========= ======== ========
MID-CAP GROWTH SERIES MONEY MARKET SERIES
--------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ----------------- ----------------- -----------------
FROM OPERATIONS
Net investment income (loss) ....................... $ (641) $ (384) $ 7,773 $ 6,995
Net realized gain (loss) ........................... 22,156 387 (7) --
Net change in unrealized appreciation (depreciation) (4,767) 1,144 -- --
------- -------- --------- ---------
Increase (decrease) in net assets resulting
from operations .................................. 16,748 1,147 7,766 6,995
------- -------- --------- ---------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................. -- -- (7,773) (6,995)
Net realized short-term gains ...................... -- -- -- --
Net realized long-term gains ....................... -- -- -- --
------- -------- --------- ---------
Decrease in net assets from distributions to
shareholders ..................................... -- -- (7,773) (6,995)
------- -------- --------- ---------
FROM SHARE TRANSACTIONS
Sales of shares .................................... 10,181 11,584 118,903 106,260
Reinvestment of distributions ...................... -- -- 7,773 6,995
Proceeds in conjunction with Plan of Reorganization
(Note 11) ........................................ -- 53,114 -- --
Shares repurchased ................................. (29,188) (23,495) (114,390) (102,528)
------- -------- --------- ---------
Increase (decrease) in net assets from share
transactions ..................................... (19,007) 41,203 12,286 10,727
------- -------- --------- ---------
Net increase (decrease) in net assets .............. (2,259) 42,350 12,279 10,727
NET ASSETS
Beginning of period ................................ 89,512 47,162 157,158 146,431
------- -------- --------- ---------
End of period ...................................... $87,253 $ 89,512 $ 169,437 $ 157,158
======= ======== ========= =========
Undistributed net investment income and
(accumulated net investment loss) ................ $ (8) $ (2) $ -- $ --
- ---------------------------------------------------- -------------------------------------- -------------------------------------
SHARES
Sales of shares .................................... 658 849 11,890 10,626
Reinvestment of distributions ...................... -- -- 777 699
Plan of Reorganization (Note 11) ................... -- 3,950 -- --
Shares repurchased ................................. (1,986) (1,799) (11,439) (10,253)
------- -------- --------- ---------
Net Increase / (Decrease) .......................... (1,328) 3,000 1,228 1,072
======= ======== ========= =========
MULTI-SECTOR FIXED INCOME SERIES MULTI-SECTOR SHORT TERM BOND SERIES
-------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ----------------- ----------------- -----------------
FROM OPERATIONS
Net investment income (loss) ....................... $ 13,909 $ 13,723 $ 2,360 $ 2,305
Net realized gain (loss) ........................... 1,321 494 162 (180)
Net change in unrealized appreciation (depreciation) (6,323) 1,964 (773) 491
-------- -------- -------- --------
Increase (decrease) in net assets resulting
from operations .................................. 8,907 16,181 1,749 2,616
-------- -------- -------- --------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................. (13,201) (13,054) (2,336) (2,137)
Net realized short-term gains ...................... -- -- -- --
Net realized long-term gains ....................... -- -- -- --
-------- -------- -------- --------
Decrease in net assets from distributions to
shareholders ..................................... (13,201) (13,054) (2,336) (2,137)
-------- -------- -------- --------
FROM SHARE TRANSACTIONS
Sales of shares .................................... 23,800 26,788 7,395 7,878
Reinvestment of distributions ...................... 13,201 13,054 2,336 2,137
Proceeds in conjunction with Plan of Reorganization
(Note 11) ........................................ -- -- -- --
Shares repurchased ................................. (27,590) (36,316) (11,639) (11,365)
-------- -------- -------- --------
Increase (decrease) in net assets from share
transactions ..................................... 9,411 3,526 (1,908) (1,350)
-------- -------- -------- --------
Net increase (decrease) in net assets .............. 5,117 6,653 (2,495) (871)
NET ASSETS
Beginning of period ................................ 245,750 239,097 46,663 47,534
-------- -------- -------- --------
End of period ...................................... $250,867 $245,750 $ 44,168 $ 46,663
======== ======== ======== ========
Undistributed net investment income and
(accumulated net investment loss) ................ $ 2,144 $ 811 $ 363 $ 209
- ---------------------------------------------------- ------------------------------------- -------------------------------------
SHARES
Sales of shares .................................... 2,542 2,900 729 790
Reinvestment of distributions ...................... 1,452 1,438 236 216
Plan of Reorganization (Note 11) ................... -- -- -- --
Shares repurchased ................................. (2,944) (3,936) (1,148) (1,133)
-------- -------- -------- --------
Net Increase / (Decrease) .......................... 1,050 402 (183) (127)
======== ======== ======== ========
See Notes to Financial Statements
104 and 105
THE PHOENIX EDGE SERIES FUND
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
(Reported in thousands)
STRATEGIC ALLOCATION SERIES ABERDEEN INTERNATIONAL SERIES
------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ----------------- ----------------- -----------------
FROM OPERATIONS
Net investment income (loss) ................... $ 7,682 $ 8,740 $ 9,678 $ 5,009
Net realized gain (loss) ....................... 13,556 33,332 51,057 28,638
Net change in unrealized appreciation
(depreciation) ............................... (3,853) (3,049) 3,279 28,384
-------- -------- -------- --------
Increase (decrease) in net assets resulting
from operations .............................. 17,385 39,023 64,014 62,031
-------- -------- -------- --------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................... (7,465) (8,344) (7,352) (5,769)
Net realized short-term gains .................. (4,382) (8,381) (939) --
Net realized long-term gains ................... (10,976) (30,264) (23,958) --
-------- -------- -------- --------
Decrease in net assets from distributions to
shareholders ................................. (22,823) (46,989) (32,249) (5,769)
-------- -------- -------- --------
FROM SHARE TRANSACTIONS
Sales of shares ................................ 4,074 3,042 59,091 38,545
Reinvestment of distributions .................. 22,823 46,989 32,249 5,769
Proceeds in conjunction with Plan of
Reorganization (Note 11) ..................... -- -- -- 175,010
Proceeds in conjunction with Plan of
Reorganization (Note 11) ..................... -- -- -- --
Shares repurchased ............................. (66,951) (78,662) (42,473) (44,939)
-------- -------- -------- --------
Increase (decrease) in net assets from share
transactions ................................. (40,054) (28,631) 48,867 174,385
-------- -------- -------- --------
Net increase (decrease) in net assets .......... (45,492) (36,597) 80,632 230,647
-------- -------- -------- --------
NET ASSETS
Beginning of period ............................ 316,145 352,742 421,281 190,634
-------- -------- -------- --------
End of period .................................. $270,653 $316,145 $501,913 $421,281
======== ======== ======== ========
Undistributed net investment income and
(accumulated net investment loss) ............ $ 962 $ 680 $ 428 $ (2,090)
- ------------------------------------------------ ------------------------------------- -------------------------------------
SHARES
Sales of shares ................................ 298 213 3,115 2,384
Reinvestment of distributions .................. 1,738 3,519 1,688 358
Plan of Reorganization (Note 11) ............... -- -- -- 10,427
Plan of Reorganization (Note 11) ............... -- -- -- --
Shares repurchased ............................. (4,914) (5,565) (2,253) (2,843)
-------- -------- -------- --------
Net Increase / (Decrease) ...................... (2,878) (1,833) 2,550 10,326
======== ======== ======== ========
++Amount less than 1,000 shares.
DUFF & PHELPS
ALGER SMALL-CAP GROWTH SERIES REAL ESTATE SECURITIES SERIES
------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ----------------- ----------------- -----------------
FROM OPERATIONS
Net investment income (loss) ................... $ (358) $ (188) $ 2,518 $ 2,226
Net realized gain (loss) ....................... 6,995 7,999 12,272 14,452
Net change in unrealized appreciation
(depreciation) ............................... 2,036 (2,384) (40,714) 34,308
-------- -------- -------- --------
Increase (decrease) in net assets resulting
from operations .............................. 8,673 5,427 (25,924) 50,986
-------- -------- -------- --------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................... -- -- (2,063) (2,131)
Net realized short-term gains .................. (1,502) -- (2,116) (1,532)
Net realized long-term gains ................... (9,086) (6) (11,157) (11,648)
-------- -------- -------- --------
Decrease in net assets from distributions to
shareholders ................................. (10,588) (6) (15,336) (15,311)
-------- -------- -------- --------
FROM SHARE TRANSACTIONS
Sales of shares ................................ 2,733 5,975 13,438 25,505
Reinvestment of distributions .................. 10,588 6 15,336 15,311
Proceeds in conjunction with Plan of
Reorganization (Note 11) ..................... -- 16,831 -- --
Proceeds in conjunction with Plan of
Reorganization (Note 11) ..................... -- 17,716 -- --
Shares repurchased ............................. (13,291) (11,474) (40,296) (25,850)
-------- -------- -------- --------
Increase (decrease) in net assets from share
transactions ................................. 30 29,054 (11,522) 14,966
-------- -------- -------- --------
Net increase (decrease) in net assets .......... (1,885) 34,475 (52,782) 50,641
-------- -------- -------- --------
NET ASSETS
Beginning of period ............................ 57,653 23,178 187,922 137,281
-------- -------- -------- --------
End of period .................................. $ 55,768 $ 57,653 $135,140 $187,922
======== ======== ======== ========
Undistributed net investment income and
(accumulated net investment loss) ............ $ (7) $ (3) $ 550 $ 95
- ------------------------------------------------ ------------------------------------- -------------------------------------
SHARES
Sales of shares ................................ 140 346 398 776
Reinvestment of distributions .................. 572 --++ 542 446
Plan of Reorganization (Note 11) ............... -- 932 -- --
Plan of Reorganization (Note 11) ............... -- 981 -- --
Shares repurchased ............................. (679) (652) (1,180) (780)
-------- -------- -------- --------
Net Increase / (Decrease) ...................... 33 1,607 (240) 442
======== ======== ======== ========
++Amount less than 1,000 shares.
S&P DYNAMIC ASSET ALLOCATION S&P DYNAMIC ASSET ALLOCATION
SERIES: AGGRESSIVE GROWTH SERIES: GROWTH
------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ----------------- ----------------- -----------------
FROM OPERATIONS
Net investment income (loss) ................... $ 242 $ 112 $ 464 $ 153
Net realized gain (loss) ....................... (135) (80) (246) (131)
Net change in unrealized appreciation
(depreciation) ............................... 1,007 844 1,395 848
------- ------- ------- -------
Increase (decrease) in net assets resulting
from operations .............................. 1,114 876 1,613 870
------- ------- ------- -------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................... (241) (112) (464) (155)
Net realized short-term gains .................. (196) -- (230) --
Net realized long-term gains ................... -- -- -- --
------- ------- ------- -------
Decrease in net assets from distributions to
shareholders ................................. (437) (112) (694) (155)
------- ------- ------- -------
FROM SHARE TRANSACTIONS
Sales of shares ................................ 14,860 10,903 23,599 14,179
Reinvestment of distributions .................. 437 112 694 155
Proceeds in conjunction with Plan of
Reorganization (Note 11) ..................... -- -- -- --
Proceeds in conjunction with Plan of
Reorganization (Note 11) ..................... -- -- -- --
Shares repurchased ............................. (3,845) (482) (2,086) (1,986)
------- ------- ------- -------
Increase (decrease) in net assets from share
transactions ................................. 11,452 10,533 22,207 12,348
------- ------- ------- -------
Net increase (decrease) in net assets .......... 12,129 11,297 23,126 13,063
------- ------- ------- -------
NET ASSETS
Beginning of period ............................ 11,297 -- 13,063 --
------- ------- ------- -------
End of period .................................. $23,426 $11,297 $36,189 $13,063
======= ======= ======= =======
Undistributed net investment income and
(accumulated net investment loss) ............ $ -- $ (1) $ -- $ (1)
- ------------------------------------------------ ------------------------------------- -------------------------------------
SHARES
Sales of shares ................................ 1,241 1,049 2,057 1,386
Reinvestment of distributions .................. 37 10 60 14
Plan of Reorganization (Note 11) ............... -- -- -- --
Plan of Reorganization (Note 11) ............... -- -- -- --
Shares repurchased ............................. (316) (45) (183) (198)
------- ------- ------- -------
Net Increase / (Decrease) ...................... 962 1,014 1,934 1,202
======= ======= ======= =======
++Amount less than 1,000 shares.
See Notes to Financial Statements
106 and 107
THE PHOENIX EDGE SERIES FUND
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
(Reported in thousands)
S&P DYNAMIC ASSET ALLOCATION S&P DYNAMIC ASSET ALLOCATION
SERIES: MODERATE SERIES: MODERATE GROWTH
-------------------------------------- --------------------------------------
FROM INCEPTION FROM INCEPTION
YEAR ENDED FEBRUARY 3, 2006 TO YEAR ENDED FEBRUARY 3, 2006 TO
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ------------------- ----------------- -------------------
FROM OPERATIONS
Net investment income (loss) ....................... $ 147 $ 55 $ 329 $ 116
Net realized gain (loss) ........................... 68 (12) (4) (27)
Net change in unrealized appreciation (depreciation) 202 120 821 484
------- ------ ------- ------
Increase (decrease) in net assets resulting
from operations .................................. 417 163 1,146 573
------- ------ ------- ------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................. (147) (57) (331) (117)
Net realized short-term gains ...................... (91) -- (198) (18)
Net realized long-term gains ....................... (6) -- (29) --
------- ------ ------- ------
Decrease in net assets from distributions to
shareholders ..................................... (244) (57) (558) (135)
------- ------ ------- ------
FROM SHARE TRANSACTIONS
Sales of shares .................................... 4,747 3,949 12,628 9,318
Reinvestment of distributions ...................... 244 57 558 135
Proceeds in conjunction with Plan of
Reorganization (Note 11) ......................... -- -- -- --
Proceeds in conjunction with Plan of
Reorganization (Note 11) ......................... -- -- -- --
Shares repurchased ................................. (1,688) (251) (3,453) (527)
------- ------ ------- ------
Increase (decrease) in net assets from
share transactions ............................... 3,303 3,755 9,733 8,926
------- ------ ------- ------
Net increase (decrease) in net assets .............. 3,476 3,861 10,321 9,364
NET ASSETS
Beginning of period ................................ 3,861 -- 9,364 --
------- ------ ------- ------
End of period ...................................... $ 7,337 $3,861 $19,685 $9,364
======= ====== ======= ======
Undistributed net investment income and
(accumulated net investment loss) ................ $ (1) $ (1) $ (1) $ (1)
- ---------------------------------------------------- -------------------------------------- --------------------------------------
SHARES
Sales of shares .................................... 439 390 1,123 913
Reinvestment of distributions ...................... 23 5 49 13
Plan of Reorganization (Note 11) ................... -- -- -- --
Plan of Reorganization (Note 11) ................... -- -- -- --
Shares repurchased ................................. (157) (25) (302) (52)
------- ------ ------- ------
Net Increase / (Decrease) .......................... 305 370 870 874
======= ====== ======= ======
SANFORD BERNSTEIN SANFORD BERNSTEIN
MID-CAP VALUE SERIES SMALL-CAP VALUE SERIES
------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ----------------- ----------------- -----------------
FROM OPERATIONS
Net investment income (loss) ....................... $ 166 $ 584 $ (22) $ 163
Net realized gain (loss) ........................... 15,998 15,189 10,114 11,140
Net change in unrealized appreciation (depreciation) (13,080) 1,664 (11,201) 468
-------- -------- -------- --------
Increase (decrease) in net assets resulting
from operations .................................. 3,084 17,437 (1,109) 11,771
-------- -------- -------- --------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................. (199) (525) -- (171)
Net realized short-term gains ...................... (2,655) (539) (1,697) (675)
Net realized long-term gains ....................... (14,497) (15,382) (8,502) (11,125)
-------- -------- -------- --------
Decrease in net assets from distributions to
shareholders ..................................... (17,351) (16,446) (10,199) (11,971)
-------- -------- -------- --------
FROM SHARE TRANSACTIONS
Sales of shares .................................... 24,315 12,846 6,306 10,538
Reinvestment of distributions ...................... 17,351 16,446 10,199 11,971
Proceeds in conjunction with Plan of
Reorganization (Note 11) ......................... -- -- -- --
Proceeds in conjunction with Plan of
Reorganization (Note 11) ......................... -- -- -- --
Shares repurchased ................................. (20,862) (20,421) (14,726) (11,960)
-------- -------- -------- --------
Increase (decrease) in net assets from
share transactions ............................... 20,804 8,871 1,779 10,549
-------- -------- -------- --------
Net increase (decrease) in net assets .............. 6,537 9,862 (9,529) 10,349
NET ASSETS
Beginning of period ................................ 131,717 121,855 82,771 72,422
-------- -------- -------- --------
End of period ...................................... $138,254 $131,717 $ 73,242 $ 82,771
======== ======== ======== ========
Undistributed net investment income and
(accumulated net investment loss) ................ $ 113 $ 146 $ -- $ 3
- ---------------------------------------------------- ------------------------------------- -------------------------------------
SHARES
Sales of shares .................................... 1,619 872 360 579
Reinvestment of distributions ...................... 1,304 1,157 677 694
Plan of Reorganization (Note 11) ................... -- -- -- --
Plan of Reorganization (Note 11) ................... -- -- -- --
Shares repurchased ................................. (1,351) (1,398) (832) (668)
-------- -------- -------- --------
Net Increase / (Decrease) .......................... 1,572 631 205 605
======== ======== ======== ========
VAN KAMPEN
VAN KAMPEN COMSTOCK SERIES EQUITY 500 INDEX SERIES
------------------------------------- -------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006 DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- ----------------- ----------------- -----------------
FROM OPERATIONS
Net investment income (loss) ....................... $ 1,642 $ 1,586 $ 1,810 $ 1,471
Net realized gain (loss) ........................... 4,950 20,003 3,194 10,145
Net change in unrealized appreciation (depreciation) (8,000) (1,469) 1,660 3,194
-------- -------- -------- --------
Increase (decrease) in net assets resulting
from operations .................................. (1,408) 20,120 6,664 14,810
-------- -------- -------- --------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................. (1,559) (1,756) (1,711) (1,455)
Net realized short-term gains ...................... (1,830) (3,621) -- --
Net realized long-term gains ....................... (2,988) (13,694) -- --
-------- -------- -------- --------
Decrease in net assets from distributions to
shareholders ..................................... (6,377) (19,071) (1,711) (1,455)
-------- -------- -------- --------
FROM SHARE TRANSACTIONS
Sales of shares .................................... 7,056 5,309 5,311 2,065
Reinvestment of distributions ...................... 6,377 19,071 1,711 1,455
Proceeds in conjunction with Plan of
Reorganization (Note 11) ......................... -- -- -- 21,818
Proceeds in conjunction with Plan of
Reorganization (Note 11) ......................... -- -- -- 22,250
Shares repurchased ................................. (26,485) (23,936) (30,677) (23,655)
-------- -------- -------- --------
Increase (decrease) in net assets from
share transactions ............................... (13,052) 444 (23,655) 23,933
-------- -------- -------- --------
Net increase (decrease) in net assets .............. (20,837) 1,493 (18,702) 37,288
NET ASSETS
Beginning of period ................................ 108,209 106,716 142,346 105,058
-------- -------- -------- --------
End of period ...................................... $ 87,372 $108,209 $123,644 $142,346
======== ======== ======== ========
Undistributed net investment income and
(accumulated net investment loss) ................ $ 89 $ 6 $ 209 $ 113
- ---------------------------------------------------- ------------------------------------- -------------------------------------
SHARES
Sales of shares .................................... 509 353 398 175
Reinvestment of distributions ...................... 491 1,382 128 121
Plan of Reorganization (Note 11) ................... -- -- -- 1,758
Plan of Reorganization (Note 11) ................... -- -- -- 1,793
Shares repurchased ................................. (1,896) (1,614) (2,315) (1,979)
-------- -------- -------- --------
Net Increase / (Decrease) .......................... (896) 121 (1,789) 1,868
======== ======== ======== ========
See Notes to Financial Statements
108 and 109
THE PHOENIX EDGE SERIES FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
NET NET DIVIDENDS DISTRIBUTIONS
ASSET NET REALIZED TOTAL FROM FROM
VALUE INVESTMENT AND FROM NET NET
BEGINNING INCOME UNREALIZED INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD (LOSS) GAIN/(LOSS) OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ---------- ----------- ---------- ----------- ------------- -------------
- ---------------------
CAPITAL GROWTH SERIES
- ---------------------
12/31/07 $15.21 $ 0.04(1) $ 1.60 $1.64 $(0.04) $ -- $(0.04)
12/31/06 14.77 0.04(1) 0.43 0.47 (0.03) -- (0.03)
12/31/05 14.25 0.01(1) 0.52 0.53 (0.01) -- (0.01)
12/31/04 13.69 0.11 0.57 0.68 (0.12) -- (0.12)
12/31/03 10.84 0.01 2.85 2.86 (0.01) -- (0.01)
- ------------------------
GROWTH AND INCOME SERIES
- ------------------------
12/31/07 $14.51 $ 0.16(1) $ 0.81 $0.97 $(0.15) $(0.39) $(0.54)
12/31/06 12.52 0.16(1) 1.98 2.14 (0.15) -- (0.15)
12/31/05 12.07 0.13(1) 0.45 0.58 (0.13) -- (0.13)
12/31/04 11.06 0.13(1) 1.02 1.15 (0.14) -- (0.14)
12/31/03 8.77 0.11 2.29 2.40 (0.11) -- (0.11)
- ---------------------
MID-CAP GROWTH SERIES
- ---------------------
12/31/07 $13.46 $(0.11)(1) $ 3.05 $2.94 $ -- $ -- $ --
12/31/06 12.93 (0.09)(1) 0.62 0.53 -- -- --
12/31/05 12.41 (0.09)(1) 0.61 0.52 -- -- --
12/31/04 11.63 (0.06)(1) 0.84 0.78 -- -- --
12/31/03 9.03 (0.07)(1) 2.67 2.60 -- -- --
- -------------------
MONEY MARKET SERIES
- -------------------
12/31/07 $10.00 $ 0.47(1) $ -- $0.47 $(0.47) $ -- $(0.47)
12/31/06 10.00 0.43 -- 0.43 (0.43) -- (0.43)
12/31/05 10.00 0.26 -- 0.26 (0.26) -- (0.26)
12/31/04 10.00 0.08 -- 0.08 (0.08) -- (0.08)
12/31/03 10.00 0.07 -- 0.07 (0.07) -- (0.07)
- --------------------------------
MULTI-SECTOR FIXED INCOME SERIES
- --------------------------------
12/31/07 $ 9.25 $ 0.53(1) $(0.19) $0.34 $(0.50) $ -- $(0.50)
12/31/06 9.14 0.52(1) 0.09 0.61 (0.50) -- (0.50)
12/31/05 9.43 0.50(1) (0.34) 0.16 (0.45) -- (0.45)
12/31/04 9.39 0.55 0.07 0.62 (0.58) -- (0.58)
12/31/03(5) 8.76 0.58 0.66 1.24 (0.61) -- (0.61)
- -----------------------------------
MULTI-SECTOR SHORT TERM BOND SERIES
- -----------------------------------
12/31/07 $10.01 $ 0.53(1) $(0.13) $0.40 $(0.54) $ -- $(0.54)
12/31/06 9.93 0.49(1) 0.06 0.55 (0.47) -- (0.47)
12/31/05 10.16 0.45(1) (0.31) 0.14 (0.37) -- (0.37)
12/31/04 10.05 0.42 0.11 0.53 (0.42) -- (0.42)
From Inception 6/2/03 - 12/31/03 10.00 0.24 0.05 0.29 (0.24) -- (0.24)
NET NET
CHANGE ASSET ASSETS NET
IN VALUE END OF NET GROSS INVESTMENT
NET ASSET END OF TOTAL PERIOD OPERATING OPERATING INCOME PORTFOLIO
VALUE PERIOD RETURN (000) EXPENSES EXPENSES (LOSS) TURNOVER
--------- ------ ------ -------- --------- --------- ----------- ---------
- ---------------------
CAPITAL GROWTH SERIES
- ---------------------
12/31/07 $ 1.60 $16.81 10.75% $400,612 0.91% 0.91% 0.22% 88%
12/31/06 0.44 15.21 3.22 435,126 0.92 0.92 0.25 182
12/31/05 0.52 14.77 3.71 462,402 0.89 0.89 0.06 73
12/31/04 0.56 14.25 4.97 565,515 0.87 0.87 0.72 50
12/31/03 2.85 13.69 26.49 632,025 0.85 0.85 0.07 41
- ------------------------
GROWTH AND INCOME SERIES
- ------------------------
12/31/07 $ 0.43 $14.94 6.66% $159,074 0.85% 0.95% 1.03% 44%
12/31/06 1.99 14.51 17.18 167,529 0.91(4) 0.97 1.17 37
12/31/05 0.45 12.52 4.80 141,038 0.95 0.99 1.04 44
12/31/04 1.01 12.07 10.48 149,609 0.95 0.98 1.13 58
12/31/03 2.29 11.06 27.46 107,718 0.95 1.01 1.18 55
- ---------------------
MID-CAP GROWTH SERIES
- ---------------------
12/31/07 $ 2.94 $16.40 21.80% $ 87,253 1.05% 1.05% (0.73)% 149%
12/31/06 0.53 13.46 4.13 89,512 1.13(4) 1.14 (0.72) 80
12/31/05 0.52 12.93 4.18 47,162 1.15 1.21 (0.76) 178
12/31/04 0.78 12.41 6.72 62,681 1.15 1.18 (0.53) 175
12/31/03 2.60 11.63 28.83 61,294 1.15 1.16 (0.67) 174
- -------------------
MONEY MARKET SERIES
- -------------------
12/31/07 $ -- $10.00 4.88% $169,437 0.57% 0.57% 4.74% N/A
12/31/06 -- 10.00 4.41 157,158 0.65 0.66 4.35 N/A
12/31/05 -- 10.00 2.58 146,431 0.65 0.66 2.54 N/A
12/31/04 -- 10.00 0.79 156,996 0.64 0.64 0.77 N/A
12/31/03 -- 10.00 0.68 202,644 0.59 0.59 0.69 N/A
- --------------------------------
MULTI-SECTOR FIXED INCOME SERIES
- --------------------------------
12/31/07 $(0.16) $ 9.09 3.71% $250,867 0.74% 0.74% 5.65% 94%
12/31/06 0.11 9.25 6.84 245,750 0.74 0.74 5.60 90
12/31/05 (0.29) 9.14 1.78 239,097 0.75 0.75 5.37 91
12/31/04 0.04 9.43 6.84 249,885 0.73 0.73 5.68 100
12/31/03(5) 0.63 9.39 14.58 198,502 0.74 0.74 6.35 156
- -----------------------------------
MULTI-SECTOR SHORT TERM BOND SERIES
- -----------------------------------
12/31/07 $(0.14) $ 9.87 3.99% $ 44,168 0.70% 0.82% 5.23% 73%
12/31/06 0.08 10.01 5.71 46,663 0.70 0.88 4.92 87
12/31/05 (0.23) 9.93 1.36 47,534 0.70 0.98 4.45 91
12/31/04 0.11 10.16 5.34 36,136 0.51(4) 1.08 4.37 79
From Inception 6/2/03 - 12/31/03 0.05 10.05 2.96(3) 21,348 0.20(2)(4) 1.54(2) 4.90(2) 50(3)
The footnote legend is at the end of the financial highlights.
See Notes to Financial Statements
110 and 111
THE PHOENIX EDGE SERIES FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
NET NET DIVIDENDS DISTRIBUTIONS
ASSET NET REALIZED TOTAL FROM FROM
VALUE INVESTMENT AND FROM NET NET
BEGINNING INCOME UNREALIZED INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD (LOSS) GAIN/(LOSS) OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ---------- ----------- ---------- ----------- ------------- -------------
- ---------------------------
STRATEGIC ALLOCATION SERIES
- ---------------------------
12/31/07 $13.30 $ 0.36(1) $ 0.43 $ 0.79 $(0.37) $(0.77) $(1.14)
12/31/06 13.78 0.38(1) 1.31 1.69 (0.38) (1.79) (2.17)
12/31/05 14.24 0.34(1) (0.08) 0.26 (0.33) (0.39) (0.72)
12/31/04 13.96 0.37 0.65 1.02 (0.37) (0.37) (0.74)
12/31/03(6) 11.95 0.33 2.02 2.35 (0.34) -- (0.34)
- -----------------------------
ABERDEEN INTERNATIONAL SERIES
- -----------------------------
12/31/07 $17.80 $ 0.40(1) $ 2.25 $ 2.65 $(0.30) $(1.01) $(1.31)
12/31/06 14.29 0.33(1) 3.53 3.86 (0.35) -- (0.35)
12/31/05 12.54 0.46(1) 1.86 2.32 (0.57) -- (0.57)
12/31/04 10.66 0.23 1.96 2.19 (0.31) -- (0.31)
12/31/03 8.24 0.18 2.41 2.59 (0.17) -- (0.17)
- -----------------------------
ALGER SMALL-CAP GROWTH SERIES
- -----------------------------
12/31/07 $18.65 $(0.12)(1) $ 3.07 $ 2.95 $ -- $(3.75) $(3.75)
12/31/06 15.61 (0.10)(1) 3.14 3.04 -- -- --
12/31/05 14.72 (0.08)(1) 2.38 2.30 -- (1.41) (1.41)
12/31/04 14.64 (0.11)(1) 0.42 0.31 -- (0.23) (0.23)
12/31/03 10.08 (0.10)(1) 5.49 5.39 -- (0.83) (0.83)
- -------------------------------------------
DUFF & PHELPS REAL ESTATE SECURITIES SERIES
- -------------------------------------------
12/31/07 $35.60 $ 0.51(1) $(6.00) $(5.49) $(0.44) $(2.85) $(3.29)
12/31/06 28.38 0.45(1) 9.90 10.35 (0.44) (2.69) (3.13)
12/31/05 26.39 0.44(1) 3.46 3.90 (0.44) (1.47) (1.91)
12/31/04 21.85 0.56 6.87 7.43 (0.59) (2.30) (2.89)
12/31/03 16.85 0.64 5.67 6.31 (0.66) (0.65) (1.31)
- ------------------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH
- ------------------------------------------------------
12/31/07 $11.15 $ 0.16(1) $ 0.78 $ 0.94 $(0.13) $(0.10) $(0.23)
From Inception 2/3/06 - 12/31/06 10.00 0.11 1.15 1.26 (0.11) -- (0.11)
- -------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH
- -------------------------------------------
12/31/07 $10.87 $ 0.22(1) $ 0.69 $ 0.91 $(0.16) $(0.08) $(0.24)
From Inception 2/3/06 - 12/31/06 10.00 0.13 0.87 1.00 (0.13) -- (0.13)
- ---------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE
- ---------------------------------------------
12/31/07 $10.41 $ 0.30(1) $ 0.54 $ 0.84 $(0.24) $(0.15) $(0.39)
From Inception 2/3/06 - 12/31/06 10.00 0.15 0.42 0.57 (0.16) -- (0.16)
- ----------------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH
- ----------------------------------------------------
12/31/07 $10.72 $ 0.24(1) $ 0.67 $ 0.91 $(0.20) $(0.13) $(0.33)
From Inception 2/3/06 - 12/31/06 10.00 0.14 0.74 0.88 (0.14) (0.02) (0.16)
NET NET
CHANGE ASSET ASSETS NET
IN VALUE END OF NET GROSS INVESTMENT
NET ASSET END OF TOTAL PERIOD OPERATING OPERATING INCOME PORTFOLIO
VALUE PERIOD RETURN (000) EXPENSES EXPENSES (LOSS) TURNOVER
--------- ------ ------ -------- --------- --------- ----------- ---------
- ---------------------------
STRATEGIC ALLOCATION SERIES
- ---------------------------
12/31/07 $(0.35) $12.95 5.98% $270,653 0.84% 0.84% 2.62% 52%
12/31/06 (0.48) 13.30 12.69 316,145 0.83 0.84 2.66 86
12/31/05 (0.46) 13.78 1.79 352,742 0.79 0.79 2.39 62
12/31/04 0.28 14.24 7.46 427,843 0.78 0.78 2.44 65
12/31/03(6) 2.01 13.96 19.87 468,630 0.77 0.77 2.54 87
- -----------------------------
ABERDEEN INTERNATIONAL SERIES
- -----------------------------
12/31/07 $ 1.34 $19.14 14.94% $501,913 0.98% 0.98% 2.10% 34%
12/31/06 3.51 17.80 27.37 421,281 1.01 1.01 2.06 56
12/31/05 1.75 14.29 18.57 190,634 1.06 1.06 3.56 44
12/31/04 1.88 12.54 20.78 180,668 1.05 1.05 2.12 48
12/31/03 2.42 10.66 31.86 145,580 1.07 1.07 1.99 39
- -----------------------------
ALGER SMALL-CAP GROWTH SERIES
- -----------------------------
12/31/07 $(0.80) $17.85 16.10% $ 55,768 1.00% 1.12% (0.62)% 59%
12/31/06 3.04 18.65 19.45 57,653 1.00 1.27 (0.59) 147
12/31/05 0.89 15.61 15.64 23,178 1.00 1.65 (0.54) 182
12/31/04 0.08 14.72 2.12 19,561 1.00 1.74 (0.75) 200
12/31/03 4.56 14.64 53.38 13,026 1.00 3.49 (0.75) 180
- -------------------------------------------
DUFF & PHELPS REAL ESTATE SECURITIES SERIES
- -------------------------------------------
12/31/07 $(8.78) $26.82 (15.71)% $135,140 0.98% 0.98% 1.50% 23%
12/31/06 7.22 35.60 37.07 187,922 1.02 1.02 1.37 28
12/31/05 1.99 28.38 15.10 137,281 1.03 1.03 1.62 26
12/31/04 4.54 26.39 34.69 121,985 1.04 1.04 2.39 27
12/31/03 5.00 21.85 38.27 87,376 1.07 1.12 4.72 27
- ------------------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: AGGRESSIVE GROWTH
- ------------------------------------------------------
12/31/07 $ 0.71 $11.86 8.45% $ 23,426 0.70% 1.04% 1.37% 105%
From Inception 2/3/06 - 12/31/06 1.15 11.15 12.61(3) 11,297 0.70(2) 1.67(2) 2.26(2) 110(3)
- -------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: GROWTH
- -------------------------------------------
12/31/07 $ 0.67 $11.54 8.33% $ 36,189 0.70% 1.03% 1.88% 127%
From Inception 2/3/06 - 12/31/06 0.87 10.87 9.98(3) 13,063 0.70(2) 1.58(2) 2.61(2) 125(3)
- ---------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE
- ---------------------------------------------
12/31/07 $ 0.45 $10.86 7.98% $ 7,337 0.70% 1.49% 2.80% 140%
From Inception 2/3/06 - 12/31/06 0.41 10.41 5.69(3) 3,861 0.70(2) 3.10(2) 3.58(2) 81(3)
- ----------------------------------------------------
S&P DYNAMIC ASSET ALLOCATION SERIES: MODERATE GROWTH
- ----------------------------------------------------
12/31/07 $ 0.58 $11.30 8.50% $ 19,685 0.70% 1.11% 2.14% 146%
From Inception 2/3/06 - 12/31/06 0.72 10.72 8.78(3) 9,364 0.70(2) 1.99(2) 3.20(2) 106(3)
The footnote legend is at the end of the financial highlights.
See Notes to Financial Statements
112 and 113
THE PHOENIX EDGE SERIES FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
NET NET DIVIDENDS DISTRIBUTIONS
ASSET NET REALIZED TOTAL FROM FROM
VALUE INVESTMENT AND FROM NET NET
BEGINNING INCOME UNREALIZED INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD (LOSS) GAIN/(LOSS) OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ---------- ----------- ---------- ----------- ------------- -------------
- --------------------------------------
SANFORD BERNSTEIN MID-CAP VALUE SERIES
- --------------------------------------
12/31/07 $14.12 $ 0.02(1) $ 0.31 $ 0.33 $(0.02) $(1.75) $(1.77)
12/31/06 14.01 0.07(1) 1.98 2.05 (0.06) (1.88) (1.94)
12/31/05 14.02 0.01(1) 1.08 1.09 (0.02) (1.08) (1.10)
12/31/04 12.54 0.02 2.51 2.53 (0.02) (1.03) (1.05)
12/31/03 9.20 0.03 3.72 3.75 (0.02) (0.39) (0.41)
- ----------------------------------------
SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
- ----------------------------------------
12/31/07 $17.03 $ --(7) $(0.30) $(0.30) $ -- $(2.27) $(2.27)
12/31/06 17.02 0.04(1) 2.77 2.81 (0.04) (2.76) (2.80)
12/31/05 16.74 (0.03)(1) 1.28 1.25 -- (0.97) (0.97)
12/31/04 14.84 (0.03)(1) 3.39 3.36 -- (1.46) (1.46)
12/31/03 10.50 0.02(1) 4.57 4.59 -- (0.25) (0.25)
- --------------------------
VAN KAMPEN COMSTOCK SERIES
- --------------------------
12/31/07 $13.71 $ 0.23(1) $(0.51) $(0.28) $(0.23) $(0.71) $(0.94)
12/31/06 13.73 0.22(1) 2.65 2.87 (0.26) (2.63) (2.89)
12/31/05 13.18 0.16(1) 0.55 0.71 (0.16) -- (0.16)
12/31/04 11.77 0.11(1) 1.41 1.52 (0.11) -- (0.11)
12/31/03 9.59 0.09 2.19 2.28 (0.10) -- (0.10)
- ----------------------------------
VAN KAMPEN EQUITY 500 INDEX SERIES
- ----------------------------------
12/31/07 $12.77 $ 0.18(1) $ 0.44 $ 0.62 $(0.18) $ -- $(0.18)
12/31/06 11.32 0.16 1.44 1.60 (0.15) -- (0.15)
12/31/05 11.05 0.13 0.28 0.41 (0.14) -- (0.14)
12/31/04 10.21 0.15 0.84 0.99 (0.15) -- (0.15)
12/31/03 8.17 0.10 2.04 2.14 (0.10) -- (0.10)
NET NET
CHANGE ASSET ASSETS NET
IN VALUE END OF NET GROSS INVESTMENT
NET ASSET END OF TOTAL PERIOD OPERATING OPERATING INCOME PORTFOLIO
VALUE PERIOD RETURN (000) EXPENSES EXPENSES (LOSS) TURNOVER
--------- ------ ------ -------- --------- --------- ----------- ---------
- --------------------------------------
SANFORD BERNSTEIN MID-CAP VALUE SERIES
- --------------------------------------
12/31/07 $(1.44) $12.68 2.00% $138,254 1.29% 1.29% 0.11% 33%
12/31/06 0.11 14.12 14.91 131,717 1.30 1.32 0.46 52
12/31/05 (0.01) 14.01 7.73 121,855 1.30 1.33 0.07 37
12/31/04 1.48 14.02 20.41 116,014 1.30 1.34 0.25 36
12/31/03 3.34 12.54 40.97 85,868 1.30 1.37 0.46 29
- ----------------------------------------
SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
- ----------------------------------------
12/31/07 $(2.57) $14.46 (2.10)% $ 73,242 1.30% 1.31% (0.03)% 32%
12/31/06 0.01 17.03 16.75 82,771 1.30 1.35 0.21 55
12/31/05 0.28 17.02 7.46 72,422 1.30 1.40 (0.19) 32
12/31/04 1.90 16.74 22.67 67,785 1.30 1.43 (0.22) 44
12/31/03 4.34 14.84 43.86 48,756 1.30 1.52 0.14 36
- --------------------------
VAN KAMPEN COMSTOCK SERIES
- --------------------------
12/31/07 $(1.22) $12.49 (2.22)% $ 87,372 0.95% 0.96% 1.61% 15%
12/31/06 (0.02) 13.71 20.90 108,209 0.95 1.00 1.50 105
12/31/05 0.55 13.73 5.43 106,716 0.95 0.99 1.25 58
12/31/04 1.41 13.18 12.91 134,224 0.95 0.98 0.92 91
12/31/03 2.18 11.77 23.87 92,805 0.95 1.02 0.88 393
- ----------------------------------
VAN KAMPEN EQUITY 500 INDEX SERIES
- ----------------------------------
12/31/07 $ 0.44 $13.21 4.87% $123,644 0.58% 0.73% 1.34% 3%
12/31/06 1.45 12.77 14.21 142,346 0.63(4) 0.77 1.36 74
12/31/05 0.27 11.32 3.69 105,058 0.65 0.72 1.22 14
12/31/04 0.84 11.05 9.84 119,629 0.65 0.72 1.44 22
12/31/03 2.04 10.21 26.23 110,334 0.65 0.72 1.18 52
<FN>
(1) Computed using average shares outstanding.
(2) Annualized
(3) Not annualized
(4) Represents a blended net operating expense ratio.
(5) As a result of changes in generally accepted accounting principles, the Multi-Sector Fixed Income Series reclassified
periodic payments made under interest rate swap agreements, previously included within interest income, as a component of
realized gain (loss) in the statement of operations. The effect of this reclassification was a decrease of $0.01 to net
investment income per share and an increase to net realized and unrealized gain (loss) by $0.01 per share for the period
ended December 31, 2003. The net investment ratio for the period ended December 31, 2003, changed by 0.06%.
(6) As a result of changes in generally accepted accounting principles, the Strategic Allocation Series reclassified periodic
payments made under interest rate swap agreements, previously included within interest income, as a component of realized
gain (loss) in the statement of operations. There was no change to net investment income per share, net realized and
unrealized gain (loss) per share and the net investment income ratio for the period ended December 31, 2003.
(7) Amount is less than $0.01.
</FN>
See Notes to Financial Statements
114 and 115
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
NOTE 1--ORGANIZATION
The Phoenix Edge Series Fund (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company. The
Fund is organized with series, which are available only to the following
separate accounts: Phoenix Life Variable Accumulation Account, Phoenix Life
Variable Universal Life Account, PHL Variable Accumulation Account, PHLVIC
Variable Universal Life Account, Phoenix Life and Annuity Variable Universal
Life Account, and Phoenix Life Separate Accounts B, C, and D.
The Fund is comprised of 18 series (each a "series").
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund 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 amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION
Equity securities are valued at the official closing price (typically last
sale) on the exchange on which the securities are primarily traded, or if no
closing price is available, at the last bid price.
Debt securities are valued on the basis of broker quotations or valuations
provided by a pricing service, which utilizes information with respect to
recent sales, market transactions in comparable securities, quotations from
dealers, and various relationships between securities in determining value.
As required, some securities and assets may be valued at fair value as
determined in good faith by or under the direction of the Trustees.
Certain foreign common stocks may be fair valued in cases where closing
prices are not readily available or are deemed not reflective of readily
available market prices. For example, significant events (such as movement
in the U.S. securities market, or other regional and local developments) may
occur between the time that foreign markets close (where the security is
principally traded) and the time that the series calculates its net asset
value (generally, the close of the NYSE) that may impact the value of
securities traded in these foreign markets. In these cases, information from
an external vendor may be utilized to adjust closing market prices of
certain foreign common stocks to reflect their fair value. Because the
frequency of significant events is not predictable, fair valuation of
certain foreign common stocks may occur on a frequent basis.
On December 31, 2007, The Aberdeen International utilized fair value pricing
for its foreign common stocks.
Certain securities held by the Fund were valued on the basis of a price
provided by a principal market maker. The prices provided by the principal
market makers may differ from the value that would be realized if the
securities were sold. At December 31, 2007, the total value of these
securities represented the following approximate percentage of net assets:
PERCENTAGE OF
SERIES NET ASSETS
---------- -------------
Multi-Sector Short Term Bond .............. 3.65%
Short-term investments having a remaining maturity of 60 days or less are
valued at amortized cost, which approximates market.
Money Market uses the amortized cost method of security valuation absent
extraordinary or unusual market conditions. In the opinion of the Trustees,
this represents the fair value of the securities. The deviations between the
net asset value per share are monitored by using available market quotations
and Money Market's net asset value per share using amortized cost. If the
deviation exceeds 1/2 of 1%, the Board of Trustees will consider what
action, if any, should be initiated to provide fair valuation. Using this
method, the series attempts to maintain a constant net asset value of $10
per share.
In September 2006, Statement of Financial Accounting Standards No. 157,
"Fair Value Measurements" ("SFAS 157"), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures
about fair value measurements. Management is currently evaluating the impact
the adoption of SFAS 157 will have on the Fund's financial statement
disclosures. The Fund will be adopting effective with 3/31/08 on the
financial statements.
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 series is notified. Interest income is recorded
on the accrual basis. Each series 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 series is treated as a separate taxable entity. It is the policy of
each series in the Fund 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.
Certain series may be subject to foreign taxes on income, gains on
investments or currency repatriation, a portion of which may be recoverable.
Each series 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 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 series' tax positions taken on federal income tax returns for
all open tax years (tax years ended December 31, 2004 - 2007) for purposes
of implementing FIN 48, and has concluded that no provision for income tax
is required in the series' financial statements. Management is not aware of
any events that are reasonably possible to occur in the next twelve months
that would result in the amount of any unrecognized tax benefits
significantly increasing or decreasing for any of the Series.
D. DISTRIBUTIONS TO SHAREHOLDERS
Distributions are recorded by each series on the ex-dividend date. For Money
Market, income distributions are recorded daily. Income and capital gain
distributions are determined in accordance with income tax regulations which
may differ from accounting principles generally
116
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007
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 Fund with respect to more than one series are
allocated in proportion to the net assets of each series, except where
allocation of direct expense to each series or an alternative allocation
method can be more appropriately made. In addition to the net operating
expenses that the Phoenix-S&P Asset Allocation series' bear directly, the
contract owners, as investors in the series, indirectly bear the series'
pro-rata expenses of the underlying funds in which each series invests.
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 Fund 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
Certain series 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 Statements of Assets and Liabilities. Risks arise from the
possible movements in foreign exchange rates or if a 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 series as unrealized gain or
loss. When the contract is closed or offset with the same counterparty, the
series 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. FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Certain series may enter into
financial futures contracts as a hedge against anticipated changes in the
market value of their portfolio securities. Upon entering into a futures
contract, the series is required to pledge to the broker an amount of cash
and/or securities equal to the "initial margin" requirements of the futures
exchange on which the contract is traded. Pursuant to the contract, the
series agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or payments
are known as variation margin and are recorded by the series as unrealized
gains or losses. When the contract is closed, the series records a realized
gain or loss equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed. The
potential risk to the series is that the change in value of the futures
contract may not correspond to the change in value of the hedged
instruments.
J. REIT INVESTMENTS
For Duff & Phelps Real Estate Securities, dividend income is recorded using
management's estimate of the income included in distributions received from
the REIT investments. Distributions received in excess of this estimated
amount are recorded as a reduction of the cost of investments or
reclassified to capital gains. The actual amounts of income, return of
capital, and capital gains are only determined by each REIT after its fiscal
year-end, and may differ from the estimated amounts.
K. SECURITY LENDING
Certain series may loan securities to qualified brokers through an agreement
with State Street Bank and Trust Company (the "Custodian"). Under the terms
of agreement, the series 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 series 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.
At December 31, 2007, the following series had securities on loan (reported
in 000's):
U.S.
GOVERNMENT
MARKET SECURITIES CASH
SERIES VALUE COLLATERAL COLLATERAL
------------------------------ -------- ----------- ----------
Capital Growth ............... $33,609 $8,254 $25,980
Multi-Sector Fixed Income .... 31,356 -- 33,024
Strategic Allocation ......... 169 -- 174
Aberdeen International ....... 1,300 -- 1,386
L. LOAN AGREEMENTS
Certain series may invest in direct debt instruments, which are interests in
amounts owed by a corporate, governmental, or other borrower to lenders or
lending syndicates. The series' investments in loans may be in the form of
participations in loans or assignments of all or a portion of loans from
third parties. A loan is often administered by a bank or other financial
institution (the lender) that acts as agent for all holders. The agent
administers the terms of the loan, as specified in the loan agreement. When
investing in a loan participation, the series has the right to receive
payments of principal, interest and any fees to which it is entitled only
from the lender selling the loan agreement and only upon receipt by the
lender of payments from the borrower. The series
117
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007
generally has no right to enforce compliance with the terms of the loan
agreement with the borrower. As a result, the series may be subject to the
credit risk of both the borrower and the lender that is selling the loan
agreement. When the series purchases assignments from lenders it acquires
direct rights against the borrower on the loan. Direct indebtedness of
emerging countries involves a risk that the government entities responsible
for the repayment of the debt may be unable, or unwilling to pay the
principal and interest when due. Currently, the series only hold assignment
loans.
M. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
Certain series may engage in when-issued or delayed delivery transactions.
Each series records when-issued and delayed delivery securities on the trade
date. Each series maintains collateral for the securities purchased.
Securities purchased on a when-issued or delayed delivery basis begin
earning interest on the settlement date.
N. REPURCHASE AGREEMENTS
A repurchase agreement is a transaction where a series acquires a security
for cash and obtains a simultaneous commitment from the seller to repurchase
the security at an agreed upon price and date. Each series, through its
custodian, takes possession of securities collateralizing the repurchase
agreement. The collateral is marked-to-market daily to ensure that the
market value of the underlying assets remains sufficient to protect the
series in the event of default by the seller. If the seller defaults and the
value of the collateral declines, or if the seller enters insolvency
proceedings, realization of collateral may be delayed or limited.
O. CREDIT LINKED NOTES
Certain series may invest in credit linked notes, which are usually issued
by a special purpose vehicle that is selling credit protection through a
credit default swap. The performance of the notes is linked to the
performance of the underlying reference obligation. The special purpose
vehicle invests the proceeds from the notes to cover its contingent
obligation. Credit linked notes may also have risks with default by the
referenced obligation, currency and/or interest rates.
NOTE 3--INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
The advisor to the Fund is Phoenix Variable Advisors, Inc. ("PVA") (the
"Advisor"). PVA is a wholly-owned subsidiary of PM Holdings, Inc. PVA is an
indirect, wholly-owned subsidiary of Phoenix Life Insurance Company
("PLIC").
As compensation for their service to the Fund, the advisor is entitled to a
fee based upon the following annual rates as a percentage of the average
daily net assets of each separate series listed below:
RATE RATE RATE
FOR FIRST FOR NEXT FOR OVER
$250 $250 $500
SERIES MILLION MILLION MILLION
-------- --------- -------- --------
Capital Growth......... 0.70% 0.65% 0.60%
Growth and Income...... 0.70 0.65 0.60
Mid-Cap Growth......... 0.80 0.80 0.80
Money Market........... 0.40 0.35 0.30
Multi-Sector
Fixed Income......... 0.50 0.45 0.40
Multi-Sector
Short Term Bond ..... 0.50 0.45 0.40
Strategic Allocation... 0.60 0.55 0.50
Aberdeen International 0.75 0.70 0.65
Alger Small-Cap
Growth............... 0.85 0.85 0.85
S&P Aggressive
Growth............... 0.40 0.40 0.40
RATE RATE RATE
FOR FIRST FOR NEXT FOR OVER
$250 $250 $500
SERIES MILLION MILLION MILLION
-------- --------- -------- --------
S&P Growth............. 0.40% 0.40% 0.40%
S&P Moderate........... 0.40 0.40 0.40
S&P Moderate Growth.... 0.40 0.40 0.40
Sanford Bernstein
Mid-Cap Value........ 1.05 1.05 1.05
Sanford Bernstein
Small-Cap Value...... 1.05 1.05 1.05
Van Kampen Comstock.... 0.70 0.65 0.60
Van Kampen
Equity 500 Index*.... 0.35 0.35 0.35
RATE RATE RATE
FOR FIRST FOR NEXT FOR OVER
ADVISOR $1 BILLION $1 BILLION $2 BILLION
------- ---------- ---------- ----------
Duff & Phelps
Real Estate
Securities.... PVA 0.75% 0.70% 0.65%
*Prior to October 1, 2007, the rate was 0.45%.
Pursuant to subadvisory agreements, PVA delegates, certain investment
decisions and/or research functions with respect to the following series to
the subadvisor indicated, for which each is paid a fee by the advisor.
SERIES SUBADVISOR
------ ----------
Capital Growth Harris Investment Management, Inc.
Growth and Income PIC(2)*
Mid-Cap Growth Neuberger Berman Management, Inc.
Money Market Goodwin(5)*
Multi-Sector Fixed Income Goodwin(5)*
Multi-Sector Short Term Bond Goodwin(5)*
Strategic Allocation
(equity portion) PIC(2)*
Strategic Allocation
(fixed income portion) Goodwin(5)*
Aberdeen International Aberdeen(1)
Alger Small-Cap Growth Fred Alger Management, Inc.
Duff & Phelps Real Estate Securities DPIM(6)*
S&P Aggressive Growth SPIAS(3)
S&P Growth SPIAS(3)
S&P Moderate SPIAS(3)
S&P Moderate Growth SPIAS(3)
Sanford Bernstein Mid-Cap Value AllianceBernstein, L.P.
Sanford Bernstein Small-Cap Value AllianceBernstein, L.P.
Van Kampen Comstock Van Kampen(4)
Van Kampen Equity 500 Index Van Kampen(4)
(1)Aberdeen Asset Management Inc.
(2)Phoenix Investment Counsel, Inc.
(3)Standard & Poor's Investment Advisory Services LLC
(4)Morgan Stanley Investment Management Inc. dba Van Kampen
(5)Goodwin Capital Advisers, Inc.
(6)Duff & Phelps Investment Management Co.
*Affiliated Company.
118
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007
The advisor has contractually agreed to reimburse expenses of the Fund
(excluding management and distribution fees, interest, taxes, brokerage fees
and commissions), to the extent that such expenses exceed the operating
expenses of the series' average net assets (the "expense caps") until April
30, 2008 as listed in the chart below.
MAXIMUM
OPERATING
EXPENSE
---------
Capital Growth.......................... 0.25%
Growth and Income....................... 0.15
Mid-Cap Growth.......................... 0.30
Money Market............................ 0.25
Multi-Sector Fixed Income............... 0.25
Multi-Sector Short Term Bond............ 0.20
Strategic Allocation.................... 0.25
Aberdeen International.................. 0.30
Alger Small-Cap Growth.................. 0.15
Duff & Phelps Real Estate Securities.... 0.35
S&P Aggressive Growth................... 0.05
S&P Growth.............................. 0.05
S&P Moderate............................ 0.05
S&P Moderate Growth..................... 0.05
Sanford Bernstein Mid-Cap Value ........ 0.25
Sanford Bernstein Small-Cap Value ...... 0.25
Van Kampen Comstock..................... 0.25
Van Kampen Equity 500 Index............. 0.15
Phoenix Equity Planning Corporation ("PEPCO"), is an indirect wholly-owned
subsidiary of Phoenix Investment Partners, Ltd. ("PXP") and serves as the
Administrator to the Fund. 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 money
market funds, the fee is 0.035% of the average net assets across all Phoenix
money market funds within the Phoenix Funds Family.
For the fiscal year (the "period") ended December 31, 2007, the Fund
incurred administration fees totaling $2,142 (reported in 000's).
Pursuant to a Service Agreement, PLIC a wholly-owned subsidiary of The
Phoenix Companies ("PNX"), receives a service fee at the annual rate of
0.066% of the average daily net assets of each series for providing certain
stock transfer and accounting services for each series. For the period ended
December 31, 2007, the Fund paid PLIC $1,743 (reported in 000's).
PEPCO serves as the distributor to the Phoenix-S&P Series' shares. For its
services each Phoenix-S&P Series pays PEPCO distribution and/or service fees
at an annual rate not to exceed 0.25% of the average daily net assets of
each respective Phoenix-S&P Dynamic Asset Allocation Series.
At December 31, 2007, PLIC and its affiliates held shares in the Fund which
aggregate the following:
AGGREGATE
NET ASSET
VALUE
(REPORTED
SHARES IN 000'S)
------ ---------
S&P Aggressive Growth........... 20,000 $244
S&P Growth...................... 21,000 238
S&P Moderate.................... 21,000 236
S&P Moderate Growth............. 21,000 228
The Fund provides a deferred compensation plan for its disinterested
trustees. Under the deferred compensation plan, disinterested trustees may
elect to defer all or a portion of their compensation. Amounts deferred are
retained by the Fund, and to the extent permitted by the 1940 Act, and then,
in turn, may be invested in the shares of unaffiliated mutual funds selected
by the disinterested trustees. Investments in such unaffiliated mutual funds
are included in "Other Assets" on the Statement of Assets and Liabilities at
December 31, 2007. As of December 31, 2007, the aggregate value of such
investments is $197 (reported in 000's).
NOTE 4--PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding U.S. Government and agency
securities, short-term securities, futures contracts, and forward currency
contracts) during the period ended December 31, 2007, were as follows:
PURCHASES SALES
(REPORTED (REPORTED
IN 000'S) IN 000'S)
--------- ----------
Capital Growth............ $365,426 $438,252
Growth and Income......... 73,484 90,383
Mid-Cap Growth............ 126,818 145,411
Multi-Sector Fixed Income. 168,771 152,471
Multi-Sector Short Term
Bond.................... 19,081 21,072
Strategic Allocation...... 115,624 161,207
Aberdeen International.... 174,226 155,801
Alger Small-Cap Growth.... 34,031 44,038
Duff & Phelps
Real Estate Securities.. 37,348 52,585
S&P Dynamic Asset Allocation-
Aggressive Growth....... 29,397 18,552
S&P Dynamic Asset Allocation-
Growth.................. 53,154 31,222
S&P Dynamic Asset Allocation-
Moderate................ 10,602 7,397
S&P Dynamic Asset Allocation-
Moderate Growth......... 31,600 22,159
Sanford Bernstein
Mid-Cap Value .......... 50,546 46,407
Sanford Bernstein
Small-Cap Value ........ 26,737 31,085
Van Kampen Comstock....... 14,840 29,313
Van Kampen
Equity 500 Index........ 4,308 23,982
Purchases and sales of long-term U.S. Government and agency securities
during the period ended December 31, 2007, were as follows:
PURCHASES SALES
(REPORTED (REPORTED
IN 000'S) IN 000'S)
--------- ----------
Multi-Sector Fixed Income ......... $71,912 $73,660
Multi-Sector Short Term Bond ...... 13,329 12,898
Strategic Allocation .............. 33,346 40,161
NOTE 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
119
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007
effects on the market prices of these investments and the income they
generate, as well as a series' ability to repatriate such amounts.
High yield/high risk securities typically entail greater price volatility
and/or principal and interest rate risk. There is a greater chance that an
issuer will not be able to make principal and interest payments on time.
Analysis of the creditworthiness of issuers of high yield securities may be
complex, and as a result, it may be more difficult for the advisors and/or
subadvisors to accurately predict risk.
Certain series 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 series, positive or negative, than if a series did not concentrate its
investments in such sectors.
At December 31, 2007, the series held securities in specific sectors as
detailed below:
PERCENTAGE
OF TOTAL
SERIES SECTOR NET ASSETS
------- ---------------------- -----------
Capital Growth..... Information Technology 31%
Alger Small-Cap
Growth........... Information Technology 26%
Sanford Bernstein
Small-Cap Value . Industrials 25%
Van Kampen
Comstock ........ Financials 26%
NOTE 6--ILLIQUID AND RESTRICTED SECURITIES
Investments shall be considered illiquid if they cannot be disposed of in
seven days in the ordinary course of business at the approximate amount at
which such securities have been valued by the series. Additionally, the
following information is also considered in determining illiquidity: 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 series' Schedule of Investments where applicable.
Restricted securities are illiquid securities, as defined above, not
registered under the Securities Act of 1933. Generally, 144A securities are
excluded from this category, except where defined as illiquid.
At December 31, 2007, the Fund held the following restricted securities:
MARKET
ACQUISITION VALUE AND
DATE % OF
AND COST NET ASSETS
(reported in (reported in
000's) 000's)
------------ ------------
Multi-Sector Fixed Income
MASTR Alternative Net Interest
Margin 06-6, N1 144A
6.129% due 9/26/46........ 8/3/06 $ 11
$493 0.0%
MARKET
ACQUISITION VALUE AND
DATE % OF
AND COST NET ASSETS
(reported in (reported in
000's) 000's)
------------ ------------
Multi-Sector Short Term Bond
MASTR Alternative Net Interest
Margin Trust 05-CW1A, N1 144A
6.750% due 12/26/35....... 11/18/08 $ 19
$129 0.04%
MASTR Resecuritization Trust
05-4CI, N2 144A
7.865% due 4/26/45........ 1/12/06 $ 59
$120 0.1%
MASTR Alternative Net Interest
Margin 06-6, N1 144A
6.129% due 9/26/46........ 8/3/06 $ 2
$ 89 0.2%
Alger Small-Cap Growth
Autobytel, Inc............ 6/20/03 $10
$ 20 0.02%
Van Kampen Equity 500 Index
Seagate Technology Tax
Refund Rights............. 11/22/00 $0
$ 0 0%
Each series will bear any costs, including those involved in registration
under the Securities Act of 1933, in connection with the disposition of such
securities.
NOTE 7--INDEMNIFICATIONS
Under the series' organizational documents, its trustees and officers are
indemnified against certain liabilities arising out of the performance of
their duties to the series. In addition, the series enter into contracts
that contain a variety of indemnifications. The series' maximum exposure
under these arrangements is unknown. However, the Fund has not had prior
claims or losses pursuant to these arrangements.
NOTE 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.
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.
120
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007
NOTE 9--MANAGER OF MANAGERS
The Fund and PVA have received an exemptive order from the Securities and
Exchange Commission ("SEC") granting exemptions from certain provisions of
the Investment Company Act of 1940, as amended, pursuant to which PVA will,
subject to review and approval of the Fund's Board of Trustees, be permitted
to enter into and materially amend subadvisory agreements without such
agreements being approved by the shareholders of the applicable series of
the Fund. PVA will continue to have the ultimate responsibility to oversee
the subadvisors and recommend their hiring, termination and replacement.
NOTE 10--MIXED AND SHARED FUNDING
Shares of the Fund are not directly offered to the public. Shares of the
Fund are currently offered through separate accounts to fund variable
accumulation annuity contracts and variable universal life insurance
policies issued by Phoenix Life Insurance Company, PHL Variable Insurance
Company, and Phoenix Life and Annuity Company and could be offered to
separate accounts of other insurance companies in the future.
The interests of variable annuity contract owners and variable life policy
owners could diverge based on differences in federal and state regulatory
requirements, tax laws, investment management or other unanticipated
developments. The Fund's Trustees do not foresee any such differences or
disadvantages at this time. However, the Fund's Trustees intend to monitor
for any material conflicts and will determine what action, if any, should be
taken in response to such conflicts. If such a conflict should occur, one or
more separate accounts may be required to withdraw its investment in the
Fund or shares of another fund may be substituted.
NOTE 11--MERGERS (REPORTED IN 000'S)
On October 27, 2006, the Capital Growth Series acquired all of the net
assets of the Phoenix-AIM Growth Series ("AIM Growth") pursuant to an
Agreement and Plan of Reorganization approved by the AIM Growth shareholders
on October 5, 2006. The acquisition was accomplished by a tax-free exchange
of 3,996,273 shares of Capital Growth outstanding on October 27, 2006 and
valued at $61,017 for 8,399,603 shares of AIM Growth outstanding on October
27, 2006. AIM Growth's net assets of $61,017, including $8,256 of net
unrealized appreciation were combined with those of Capital Growth. The
aggregate net assets of Capital Growth immediately after the merger were
$452,686. The shareholders of AIM Growth received for each share owned
approximately 0.48 share of Capital Growth.
On October 27, 2006, the Mid-Cap Growth Series acquired all of the net
assets of the Phoenix Strategic Theme Series ("Strategic Theme") pursuant to
an Agreement and Plan of Reorganization approved by the Strategic Theme
shareholders on October 5, 2006. The acquisition was accomplished by a
tax-free exchange of 3,950,319 shares of Mid-Cap Growth outstanding on
October 27, 2006 and valued at $53,114 for 4,883,118 shares of Strategic
Theme outstanding on October 27, 2006. Strategic Theme's net assets of
$53,114, including $7,455 of net unrealized appreciation were combined with
those of Mid-Cap Growth. The aggregate net assets of Mid-Cap Growth
immediately after the merger were $98,522. The shareholders of Strategic
Theme received for each share owned approximately 0.81 share of Mid-Cap
Growth.
On October 27, 2006, the Alger Small-Cap Growth Series acquired all of the
net assets of the Phoenix-Engemann Small-Cap Growth Series ("Engemann
Small-Cap Growth") and the Phoenix-Kayne Small-Cap Quality Value Series
("Kayne Small-Cap Quality Value") pursuant to Agreements and Plans of
Reorganization approved by the Engemann Small-Cap Growth and Kayne Small-Cap
Quality Value shareholders on October 26, 2006. The acquisition was
accomplished by a tax-free exchange of 1,912,431 shares of Alger Small-Cap
Growth outstanding on October 27, 2006 and valued at $34,547 for 2,108,424
shares of Engemann Small-Cap Growth valued at $16,831 and 1,054,130 shares
of Kayne Small-Cap Quality Value valued at $17,716. Engemann Small-Cap
Growth's net assets of $16,831, including $4,239 of net unrealized
appreciation and Kayne Small-Cap Quality Value's net assets of $17,716,
including $4,213 of net unrealized appreciation were combined with those of
Alger Small-Cap Growth. The aggregate net assets of Alger Small-Cap Growth
immediately after the merger were $59,092. The shareholders of Engemann
Small-Cap Growth received for each share owned approximately 0.44 share of
Alger Small-Cap Growth. The shareholders of Kayne Small-Cap Quality Value
received for each share owned approximately 0.93 share of Alger Small-Cap
Growth.
On October 27, 2006, the Van Kampen Equity 500 Index Series acquired all of
the net assets of the Phoenix-Northern Dow 30 Series ("Northern Dow 30") and
the Phoenix-Northern Nasdaq-100 Index(R) Series ("Northern Nasdaq-100
Index(R)") pursuant to Agreements and Plans of Reorganization approved by
the Northern Dow 30 and Northern Nasdaq-100 Index(R) shareholders on October
26, 2006. The acquisition was accomplished by a tax-free exchange of
3,550,335 shares of Van Kampen Equity 500 Index outstanding on October 27,
2006 and valued at $44,067 for 2,100,979 shares of Northern Dow 30 valued at
$21,818 and 4,901,410 shares of Northern Nasdaq-100 Index(R) valued at
$22,249. Northern Dow 30's net assets of $21,818, including $4,937 of net
unrealized appreciation and Northern Nasdaq-100 Index(R)'s net assets of
$22,249, including $5,784 of net unrealized appreciation were combined with
those of Van Kampen Equity 500 Index. The aggregate net assets of Van Kampen
Equity 500 Index immediately after the merger were $145,083. The
shareholders of Northern Dow 30 received for each share owned approximately
0.84 share of Van Kampen Equity 500 Index. The shareholders of Northern
Nasdaq-100 Index(R) received for each share owned approximately 0.37 share
of Van Kampen Equity 500 Index.
On October 20, 2006, the Growth and Income Series acquired all of the net
assets of the Phoenix-Kayne Rising Dividends Series ("Kayne Rising
Dividends") pursuant to an Agreement and Plan of Reorganization approved by
the Kayne Rising Dividends shareholders on October 5, 2006. The acquisition
was accomplished by a tax-free exchange of 835,783 shares of Growth and
Income outstanding on October 20, 2006 and valued at $11,722 for 1,002,388
shares of Kayne Rising Dividends outstanding on October 20, 2006. Kayne
Rising Dividend's net assets of $11,722, including $1,655 of net unrealized
appreciation were combined with those of Growth and Income. The aggregate
net assets of Growth and Income immediately after the merger were $163,685.
The shareholders of Kayne Rising Dividends received for each share owned
approximately 0.83 share of Growth and Income.
On October 20, 2006, the Aberdeen International Series acquired all of the
net assets of the Phoenix-Lazard International Equity Select Series ("Lazard
International Equity Select") pursuant to an Agreement and Plan of
Reorganization approved by the Lazard International Equity Select
shareholders on October 5, 2006. The acquisition was accomplished by a
tax-free exchange of 10,426,631 shares of Aberdeen International outstanding
on October 20, 2006 and valued at $175,010 for 10,514,476 shares of Lazard
International Equity Select outstanding on October 20, 2006. Lazard
International Equity Select's net assets of $175,010, including $33,022 of
net unrealized appreciation were combined with those of Aberdeen
International. The aggregate net assets of Aberdeen International
121
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007
immediately after the merger were $389,209. The shareholders of Lazard
International Equity Select received for each share owned approximately 0.99
share of Aberdeen International.
NOTE 12--EXEMPTIVE ORDER
On June 5, 2006, the SEC issued an order under Section 12(d)(1)(J) of the
Investment Company Act ("1940 Act") granting an exemption from Sections
12(d)(1)(A) and (B) of the 1940 Act and under Sections 6(c) and 17(b) of the
1940 Act granting an exemption from Section 17(a) of the 1940 Act, which
permits the Phoenix-S&P Series to invest in other affiliated and
unaffiliated funds, including exchange traded funds. Before the order was
granted, the Series could invest in affiliated funds only or exchange traded
funds only, but not in unaffiliated funds or a combination of affiliated
funds, exchange traded funds, and unaffiliated funds.
NOTE 13--OTHER
The insurance company affiliates of the Fund distribute the Fund as
investment options in variable annuity and life insurance products
("Variable Products") through non-affiliated advisors, broker-dealers and
other financial intermediaries. There is substantial competition for
business within most of these distributors. One of the most significant
distributors of the Variable Products (and the Fund) includes a subsidiary
of State Farm Mutual Automobile Insurance Company, or State Farm. The
insurance company affiliates of the Fund have had distribution arrangements
with State Farm since 2001. In 2007, the agreement with State Farm to
provide life and annuity products and related services to State Farm's
affluent and high-net-worth customers through qualified State Farm agents
was extended until 2016.
NOTE 14--FEDERAL INCOME TAX INFORMATION (Reported in 000's)
The following series have capital loss carryovers which may be used to
offset future capital gains.
EXPIRATION YEAR
---------------------------------------------------------------------------------------
2008 2009 2010 2011 2012 2013 2014 2015 TOTAL
------- -------- ------- ------ ------ ----- ---- ---- --------
Capital Growth......... -- $192,231 $84,342 $5,973 $2,820 -- -- -- $285,366
Mid-Cap Growth........ $38,041 39,730 16,035 -- -- $981 -- -- 94,787
Money Market........... -- -- -- -- -- -- -- $7 7
Multi-Sector Fixed
Income.............. 5,548 4,981 7,850 -- -- -- -- -- 18,379
Multi-Sector Short Term
Bond ............... -- -- -- -- 137 159 $167 -- 463
Van Kampen Equity 500
Index............... -- -- 7,004 8,593 575 1,188 -- -- 17,360
The Fund may not realize the benefit of these losses to the extent each
series does not realize gains on investments prior to the expiration of the
capital loss carryovers. The Capital Growth Series, the Mid-Cap Growth
Series and the Van Kampen Equity 500 Index Series amounts include losses
acquired in connection with prior years mergers.
The following series utilized losses deferred in prior years against current
year capital gains as follows:
Capital Growth ................................................. $19,021
Growth and Income .............................................. 7,338
Mid-Cap Growth ................................................. 22,009
Multi-Sector Fixed Income ...................................... 1,247
Multi-Sector Short Term Bond ................................... 54
Aberdeen International ......................................... 7,445
S&P Dynamic Asset Allocation: Aggressive Growth ................ 10
S&P Dynamic Asset Allocation: Growth ........................... 24
S&P Dynamic Asset Allocation: Moderate ......................... 2
Van Kampen Equity 500 Index .................................... 2,707
122
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007
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 tax year. For the period ended December 31, 2007, the following
series deferred and/or recognized post October losses as follows:
CAPITAL CAPITAL CURRENCY
SERIES DEFERRED RECOGNIZED RECOGNIZED
-------- -------- ---------- ----------
Capital Growth.................................... $232 -- --
Mid-Cap Growth.................................... -- $18 --
Multi-Sector Fixed Income......................... 103 -- $111
Multi-Sector Short Term Bond ..................... 5 5 --
Strategic Allocation.............................. -- -- 17
Aberdeen International............................ -- -- 7
Duff & Phelps Real Estate Securities.............. -- -- --
S&P Dynamic Asset Allocation: Aggressive Growth... 13 -- --
S&P Dynamic Asset Allocation: Growth.............. 57 -- --
S&P Dynamic Asset Allocation: Moderate............ 12 -- --
S&P Dynamic Asset Allocation: Moderate Growth..... 48 -- --
The components of distributable earnings on a tax basis, (excluding
unrealized appreciation (depreciation), which are disclosed in the
respective schedule of investments), consist of undistributed ordinary
income and undistributed long-term capital gains as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM
INCOME CAPITAL GAINS
------------- --------------
Capital Growth................................... $86 --
Growth and Income................................ 210 $ 1,561
Money Market..................................... 10 --
Multi-Sector Fixed Income........................ 2,059 --
Multi-Sector Short Term Bond .................... 349 --
Strategic Allocation............................. 1,371 1,800
Aberdeen International........................... 1,350 18,488
Alger Small-Cap Growth........................... 163 1,179
Duff & Phelps Real Estate Securities............. 1,308 2,026
S&P Dynamic Asset Allocation: Aggressive Growth.. 34 --
S&P Dynamic Asset Allocation: Growth............. 4 --
S&P Dynamic Asset Allocation: Moderate........... 1 --(#)
S&P Dynamic Asset Allocation: Moderate Growth.... 2 --
Sanford Bernstein Mid-Cap Value.................. 749 1,634
Sanford Bernstein Small-Cap Value................ 346 1,101
Van Kampen Commstock............................. 435 1,025
Van Kampen Equity 500 Index...................... 221 --
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 tax purposes. Short-term gains distributions reported in the
Statements of Changes in Net Assets, if any, are reported as ordinary income
for federal tax purposes.
NOTE 15--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 values of the Series. As of December 31, 2007, the following series
recorded reclassifications to increase (decrease) the accounts listed below:
UNDISTRIBUTED ACCUMULATED CAPITAL PAID IN
NET INVESTMENT NET REALIZED ON SHARES OF
INCOME (LOSS) GAIN (LOSS) BENEFICIAL INTEREST
-------------- ------------ -------------------
Capital Growth.......................................... $ (2) --(#) $ 2
Growth and Income....................................... (1) -- 1
Mid-Cap Growth.......................................... 635 $ (18) (617)
Multi-Sector Fixed Income............................... 625 (625) --
Multi-Sector Short Term Bond ........................... 130 (130) --
Strategic Allocation.................................... 64 (64) --
Aberdeen International.................................. 192 (194) 2
Alger Small-Cap Growth.................................. 354 (362) 8
Duff & Phelps Real Estate Securities.................... -- -- --
S&P Dynamic Asset Allocation: Aggressive Growth......... --(#) --(#) --
S&P Dynamic Asset Allocation: Growth.................... 1 (1) --
S&P Dynamic Asset Allocation: Moderate.................. --(#) --(#) --
S&P Dynamic Asset Allocation: Moderate Growth........... 1 (1) --
Sanford Bernstein Small-Cap Value....................... 19 (19) --
Van Kampen Equity 500 Index............................. (3) -- 3
<FN>
# Amount is less than $1,000.
</FN>
123
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007
NOTE 16--SUBADVISOR CHANGE
On December 10, 2007, Standard & Poor's Investment Advisory Services LLC
provided written notice that it was terminating its subadvisory relationship
with the four S&P - Phoenix Dynamic Asset Allocation Series as of February
29, 2008. PVA advised the Board of Trustees that it would be recommending a
new subadvisor for the four Series at the February 25-26, 2008 quarterly
meeting for its consideration and approval.
NOTE 17--SUBSEQUENT EVENT
On February 7, 2008, PNX announced that it intends to spin off its asset
management subsidiary ("spin-off"), Phoenix Investment Partners ("PXP"), to
PNX' shareholders. The Fund's Administrator and Transfer Agent, Phoenix
Equity Planning Corporation, a subsidiary of PXP, Phoenix Investment
Counsel, Inc., a subsidiary of PXP, which is the subadvisor to the Phoenix
Growth and Income Series, the Phoenix Strategic Allocation Series, and Duff
& Phelps Investment Management Company, a subsidiary of PXP, the subadvisor
to the Phoenix-Duff & Phelps Real Estate Securities Series, are also
intended to be part of the spin-off. Goodwin Capital Advisors, Inc., a
subsidiary of PXP, which is a subadvisor to Phoenix Money Market Series,
Phoenix Multi-Sector Fixed Income Series, Phoenix Multi-Sector Short-Term
Bond Series, and the Phoenix Strategic Allocation Series, is intended to be
distributed to PNX or a PNX affiliate as part of the spin-off.
124
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
[GRAPHIC OMITTED]
PricewaterhouseCoopers
To the Board of Trustees and Shareholders of
The Phoenix Edge Series 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 each of the 18 series (constituting
The Phoenix Edge Series Fund, hereafter referred to as the "Fund") at December
31, 2007 and the results of their operations, the changes in their net assets
and their financial highlights for each of the periods indicated, 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 Fund'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 December 31, 2007 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 19, 2008
125
THE PHOENIX EDGE SERIES FUND
TAX INFORMATION NOTICE (UNAUDITED)
DECEMBER 31, 2007
----------------------------------------------------------------------------
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended December 31, 2007, the series listed designated
long-term capital gains dividends as follows:
Growth and Income............................................ $ 5,578
Strategic Allocation......................................... 10,678
Aberdeen International....................................... 42,455
Alger Small-Cap Growth....................................... 4,892
Duff & Phelps Real Estate Securities......................... 10,546
S&P Dynamic Asset Allocation: Moderate Growth................ 29
Sanford Bernstein Mid-Cap Value.............................. 13,768
Sanford Bernstein Small-Cap Value............................ 8,484
Van Kampen Comstock.......................................... 3,236
----------------------------------------------------------------------------
126
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX CAPITAL GROWTH SERIES (THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board of Trustees, first by a majority of the Trustees who are
"disinterested" trustees of the Fund (as that term is defined in section
2(a)(19) of the Investment Company Act of 1940, (the "1940 Act"), and then by a
majority of the entire Board, approved the renewal of the investment advisory
agreement (the "Advisory Agreement") between Phoenix Variable Advisors, Inc.
("PVA") and the Fund and the investment subadvisory agreement (the "Subadvisory
Agreement") between PVA and Harris Investment Management, Inc. (the
"Subadvisor"). Pursuant to the Advisory Agreement between PVA and the Fund, PVA
provides advisory services to the Series. Pursuant to the Subadvisory Agreement
between PVA and the Subadvisor, the Subadvisor provides the day to day
investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to 18 mutual funds, and
its role under the Fund's "manager of managers" exemptive relief under the 1940
Act. The Board also considered the transfer agent and shareholder services that
are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3, 5 and 10 year periods ended September 30, 2007,
and the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series performed below the index for the 1, 3, 5, and 10
year and year-to-date periods as of September 30, 2007. The Series was ranked
134th out of 199 for its peer group for the year-to-date period ended September
30, 2007. The Board noted that the Subadvisor has been managing the Series for
approximately eighteen months in its consideration of the quality of the
Subadvisor's investment performance. The Board further noted that it would
review the Subadvisor's investment performance each quarter in 2008.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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
methodology appeared reasonable. The Board also noted the contractual
reimbursements provided to the Series. The Board concluded that the expected
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to the comparative analysis
of the management fees and total expense ratios of the Series compared with
those of a group of funds selected by Lipper as its appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were higher than the average total expenses for comparable funds,
and, however, the contractual management fee was slightly above the median for
the peer group. The Board considered the management fee and total expenses of
the Series in comparison to its peer group as shown in the Lipper report and
concluded that such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that the management fee included
breakpoints based on the amount of assets under management. The Board noted that
it was likely that PVA and the Series would achieve certain economies of scale
with respect to covering certain fixed costs as the assets grew. The Board
concluded that shareholders would have an opportunity to benefit from these
economies of scale.
127
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX CAPITAL GROWTH SERIES (THE "SERIES")
(CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by the Subadvisor to
the Series and its shareholders were reasonable. In addition, the Board received
from the Subadvisor and reviewed substantial written information as requested.
In the course of their deliberations and evaluation of materials, the Trustees
considered, among other things the following factors: the Subadvisor, its
current personnel (including particularly those personnel with responsibilities
for providing investment and compliance services to the Series), and its
financial condition, resources and investment process; the terms of the
Subadvisory Agreement, including the standard of care and termination
provisions; the scope and quality of the services that Subadvisor would provide
to the Series; the structure and rate of advisory fees payable to the Subadvisor
by PVA, the methodology used by the Subadvisor in determining the compensation
payable to portfolio managers and the competition for investment management
talent; and the Subadvisor's compliance record. The Board's opinion was based
upon the extensive experience of the Subadvisor and the portfolio managers. With
respect to portfolio manager 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 Series'
shareholders. The Board also considered the adequacy of the Subadvisor's
compliance program, based on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to the shareholders. While
consideration was given to performance reports and discussions at Board meetings
throughout the year, particular attention in assessing such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the 1, 3, 5
and 10 year periods ended September 30, 2007 and the year-to-date period ended
September 30, 2007. The Board reviewed the investment performance of the Series,
along with comparative performance information given for a peer group of funds
and a relevant market index. The Board noted that the Series had performed below
the index for the 1, 3, 5 and 10 year and year-to-date periods as of September
30, 2007. The Series was ranked 134th out of 199 for its peer group for the
year-to-date period ended September 30, 2007. The Board noted that the
Subadvisor has been managing the Series for approximately eighteen months in its
consideration of the quality of the Subadvisor's investment performance. The
Board further noted that it would review the Subadvisor's investment performance
each quarter in 2008.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series and that the profitability of the Subadvisor was not a
material consideration.
SUBADVISORY FEE. The Board did not consider comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders, but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
128
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX GROWTH AND INCOME SERIES (THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Phoenix
Investment Counsel, Inc. (the "Subadvisor"). Pursuant to the Advisory Agreement
between PVA and the Fund, PVA provides advisory services to the Series. Pursuant
to the Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor
provides the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to 18 mutual funds, and
its role under the Fund's "manager of managers" exemptive relief under the 1940
Act. The Board also considered the transfer agent and shareholder services that
are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for 1, 3 and 5 year periods ended September 30, 2007 and the
year-to-date period ended September 30, 2007. The Board reviewed the investment
performance of the Series, along with comparative performance information given
for a peer group of funds and a relevant market index. The Board noted that the
Series had performed above the index for the 3 year period ended September 30,
2007. The Board noted that the Series performed below its benchmark for the 1
and 5 year period and the year-to-date periods ended September 30, 2007. The
Series was ranked 126th out of 208 for its peer group for the year-to-date
period ended September 30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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
methodology appeared reasonable. The Board also noted the contractual
reimbursements provided to the Series. The Board concluded that the expected
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were higher than the average total expenses for comparable funds and
that the contractual management fee was higher than the median for the peer
group. Due to the size of the Series, the Board considered the management fee
and total expenses of the Series in comparison to its expense peer group as
shown in the Lipper report and concluded that such fee and expenses were
reasonable.
ECONOMIES OF SCALE. The Board noted that the management fee included
breakpoints based on the amount of assets under management. The Board also noted
that it was likely that PVA and the Series would achieve certain economies of
scale with respect to covering certain fixed costs as the assets grew. The Board
concluded that shareholders would have an opportunity to benefit from these
economies of scale.
129
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX GROWTH AND INCOME SERIES (THE "SERIES")
(CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by the Subadvisor to
the Series and its shareholders were reasonable. In addition, the Board received
from the Subadvisor and reviewed substantial written information as requested.
In the course of their deliberations and evaluation of materials, the Trustees
considered, among other things the following factors: the Subadvisor, its
current personnel (including particularly those personnel with responsibilities
for providing investment and compliance services to the Series), and its
financial condition, resources and investment process; the terms of the
Subadvisory Agreement, including the standard of care and termination
provisions; the scope and quality of the services that Subadvisor would provide
to the Series; the structure and rate of advisory fees payable to the Subadvisor
by PVA, the methodology used by the Subadvisor in determining the compensation
payable to portfolio managers and the competition for investment management
talent; and the Subadvisor's compliance record. The Board's opinion was based
upon the extensive experience of the Subadvisor and the portfolio managers and
the experience the Subadvisor had as the previous advisor for the Series. With
respect to portfolio manager 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 Series'
shareholders. The Board also considered the adequacy of the Subadvisor's
compliance program, based on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to the shareholders. While
consideration was given to performance reports and discussions at Board meetings
throughout the year, particular attention in assessing such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the 1, 3 and
5 year periods ended September 30, 2007 and the year-to-date period ended
September 30, 2007. The Board reviewed the investment performance of the Series,
along with comparative performance information given for a peer group of funds
and a relevant market index. The Board noted that the Series had performed above
the index for the 3 year period ended September 30, 2007. The Board noted that
the Series performed below its benchmark for the 1 and 5 year period and the
year-to-date periods ended September 30, 2007. The Series was ranked 126th out
of 208 for its peer group for the year ended September 30, 2007.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series and that the profitability of the Subadvisor was not a
material consideration.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along the Series'
shareholders, but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
130
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX MID-CAP GROWTH SERIES (THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a special meeting of the Series'
Board of Trustees on September 26, 2007, the Board approved the Advisor's
recommendation to terminate the prior subadvisor, Bennett Lawrence Management
LLC ("Bennett Lawrence") to be effective on November 26, 2007. At the special
meeting, the Advisor advised the Board that it would recommend a new subadvisor
for the Series to the Board for its consideration at the November 12 and 13,
2007 Board Meeting. At a meeting held on November 13, 2007 the Advisor
recommended that Neuberger Berman Management LLC ("Neuberger Berman") manage the
Series. The Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and approved the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Neuberger
Berman (the "Subadvisor"). Pursuant to the Advisory Agreement between PVA and
the Fund, PVA provides advisory services to the Series. Pursuant to the
Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor provides
the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was fair and reasonable and that approval of each agreement was in
the best interests of the Series 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 PVA and its affiliates to
the Series and its shareholders were reasonable. The Board's conclusion was
based, in part, upon services provided to the Series such as quarterly reports
provided by PVA 1) comparing the performance of the Series with a peer group and
benchmark, 2) showing that the investment policies and restrictions for the
Series were followed and 3) covering matters such as the compliance of
investment personnel and other access persons with the Code of Ethics of PVA and
the Series, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of the investment programs of the
Series and the monitoring of the Subadvisor's investment performance and its
compliance with applicable laws, regulations, policies and procedures. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. With respect to compliance monitoring, the
Board noted that PVA required quarterly compliance certifications from the
former subadvisor and conducted compliance due diligence visits at the former
subadvisor and would continue this compliance process with the new Subadvisor.
The Board also considered the experience of PVA having acted as an investment
adviser to mutual funds for 8 years, its current experience in acting as an
investment adviser to 18 mutual funds, and its role under the Fund's "manager of
managers" exemptive relief under the Investment Company Act of 1940, as amended.
The Board also considered the transfer agent and shareholder services that are
provided to Series shareholders by an affiliate of PVA, noting continuing
improvements by management in the scope and quality of services and favorable
reports on such service conducted by third parties.
INVESTMENT PERFORMANCE. Since the Board placed emphasis on the investment
performance of the Series in view of its importance to shareholders, it
considered the new Subadvisor's prior performance in managing mid-cap
securities. Neuberger Berman had outperformed the Russell Mid-Cap Growth Index
by 300 bps for the 1 year period ended August 31, 2007. The 3 and 5 year
performance for similar funds was strong.
PROFITABILITY. The Board also considered the level of profits realized by
PVA and its affiliates in connection with the operation of the Series. In this
regard, the Board reviewed the Series profitability analysis that addressed the
overall profitability of PVA for its management of The Phoenix Edge Series Fund
family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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 voluntary reimbursements provided to the
Series. The Board concluded that the profitability to PVA from the Fund was
reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group. The Board noted that the total expenses of the Series were above the
average total expenses for comparable funds; however the contractual management
fee was below the median for the peer group. The Board was satisfied with the
management fee and total expenses of the Series in comparison to its peer group
as shown in the Lipper report and concluded that such fee and expenses were
reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale as the assets grew in order to
cover certain fixed costs. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
131
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX MID-CAP GROWTH SERIES (THE "SERIES")
(CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT, QUALITY OF SERVICES AND INVESTMENT PERFORMANCE. In
connection with the consideration of PVA's proposal to replace Bennett Lawrence
with Neuberger Berman as Subadvisor to the Series, the Board received in advance
of the meeting, certain information in the form of an extensive questionnaire
completed by Neuberger Berman concerning a number of issues, including its
investment philosophy, resources, operations and compliance structure. The Board
had further benefit of a presentation made by Neuberger Berman's senior
management personnel where a number of issues, including Neuberger Berman's
history, investment approach, investment strategies, portfolio turnover rates,
assets under management, personnel, compliance procedures and the firm's overall
performance, were reviewed and discussed. The Board was satisfied that the
financial statements of Neuberger Berman indicated it was sufficiently
capitalized, and that its 1, 3 and 5 year performance for funds similar to the
Series was strong. The Board also took note of Neuberger Berman's consistent
investment style.
The Board also reviewed performance information for the Series and noted
that as a result of disappointing performance, the recommendation of a new
subadvisor was appropriate. In this context, the Trustees considered PVA's
quantitative and qualitative evaluation of Neuberger Berman's skills and
abilities in managing assets pursuant to specific investment styles similar to
the styles of the Series. In addition, the Trustees also considered the overall
nature, extent, and quality of the services to be provided by the Subadvisor,
whether the cost to PVA of these services would be reasonable, and the economic
viability of Neuberger Berman.
After considering all the information presented, based on the qualifications
of Neuberger Berman's personnel and the performance of assets managed by the
subadvisor in a similar manner and the performance of assets managed by the
subadvisor in a similar manner as the Series would be managed, the Board
concluded that the nature, quality and cost of services to be provided to the
Series by the subadvisor were reasonable and in the best interest of the Series
and their shareholders and approved the proposal.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
132
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX MONEY MARKET SERIES (THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Goodwin
Capital Advisers, Inc. (the "Subadvisor"). Pursuant to the Advisory Agreement
between PVA and the Fund, PVA provides advisory services to the Series. Pursuant
to the Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor
provides the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to 18 mutual funds, and
its role under the Fund's "manager of managers" exemptive relief under the 1940
Act. The Board also considered the transfer agent and shareholder services that
are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3, 5 and 10 year periods ended September 30, 2007
and the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the performance of the Series was slightly below the index for
all periods. The Series was ranked 52nd out of 108 for its peer group for the
year-to-date period ended September 30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series since 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
methodology appeared reasonable. The Board also noted the contractual
reimbursements provided to the Series. The Board concluded that the expected
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were higher than average total expenses for comparable funds and that
the contractual management fee was below the median for the peer group. The
Board considered the management fee and total expenses of the Series in
comparison to its expense peer group as shown in the Lipper report and concluded
that such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that the management fee included
breakpoints based on the amount of assets under management. The Board noted that
it was likely that PVA and the Series would achieve certain economies of scale
with respect to covering certain fixed costs as the assets grew. The Board
concluded that shareholders would have an opportunity to benefit from these
economies of scale.
133
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX MONEY MARKET SERIES (THE "SERIES")
(CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by the Subadvisor to
the Series and its shareholders were reasonable. In addition, the Board received
from the Subadvisor and reviewed substantial written information as requested.
In the course of their deliberations and evaluation of materials, the Trustees
considered, among other things the following factors: the Subadvisor, its
current personnel (including particularly those personnel with responsibilities
for providing investment and compliance services to the Series), and its
financial condition, resources and investment process; the terms of the
Subadvisory Agreement, including the standard of care and termination
provisions; the scope and quality of the services that the Subadvisor would
provide to the Series; the structure and rate of advisory fees payable to the
Subadvisor by PVA, the methodology used by the Subadvisor in determining the
compensation payable to portfolio managers and the competition for investment
management talent; and the Subadvisor's compliance record. The Board's opinion
was based, in part, upon the extensive experience of the portfolio managers and,
in particular, their experience in managing the Series as employees of Phoenix
Investment Counsel, Inc., the previous advisor for the Series. With respect to
portfolio manager 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 Series' shareholders. The
Board also considered the adequacy of the Subadvisor's compliance program, based
on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to the shareholders. While
consideration was given to performance reports and discussions at Board meetings
throughout the year, particular attention in assessing such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the 1, 3, 5
and 10 year periods ended September 30, 2007 and the year-to-date period ended
September 30, 2007. The Board reviewed the investment performance of the Series,
along with comparative performance information given for a peer group of funds
and a relevant market index. The Board noted that the performance of the Series
was slightly below the index for all periods. The Series was ranked 52nd out of
108 for its peer group for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series and that the profitability of the Subadvisor was not a
material consideration.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders, but noted that any economies would most likely be generated at the
adviser level and not necessarily at the subadvisor level.
134
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX MULTI-SECTOR FIXED INCOME SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Goodwin
Capital Advisers, Inc. (the "Subadvisor"). Pursuant to the Advisory Agreement
between PVA and the Fund, PVA provides advisory services to the Series. Pursuant
to the Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor
provides the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of the subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to 18 mutual funds, and
its role under the Fund's "manager of managers" exemptive relief under the 1940
Act. The Board also considered the transfer agent and shareholder services that
are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3, 5 and 10 year periods ended September 30, 2007
and the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with comparative performance
information given for a peer group of funds and a relevant market index. The
Series had performed above the index for the 1, 3, and 5 year periods ended
September 30, 2007 and performed below the index for the 10 year and
year-to-date periods ended September 30, 2007. The Series was ranked 33rd out of
49 for its peer group for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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
methodology appeared reasonable. The Board also noted the contractual
reimbursements provided to the Series. The Board concluded that the expected
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were slightly lower than the average total expenses for comparable
funds and that the contractual management fee was below the median for the peer
group. The Board considered the management fee and total expenses of the Series
in comparison to its expense group as shown in the Lipper report and concluded
that such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that the management fee included
breakpoints based on the amount of assets under management. The Board also noted
that it was likely that PVA and the Series would achieve certain economies of
scale with respect to covering certain fixed costs as the assets grew. The Board
concluded that shareholders would have an opportunity to benefit from these
economies of scale.
135
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX MULTI-SECTOR FIXED INCOME SERIES
(THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by the Subadvisor to
the Series and its shareholders were reasonable. In addition, the Board received
from the Subadvisor and reviewed substantial written information as requested.
In the course of their deliberations and evaluation of materials, the Trustees
considered among other things the following factors: the Subadvisor, its current
personnel (including particularly those personnel with responsibilities for
providing investment and compliance services to the Series), and its financial
condition, resources and investment process; the terms of the Subadvisory
Agreement, including the standard of care and termination provisions; the scope
and quality of the services that Subadvisor would provide to the Series; the
structure and rate of advisory fees payable to the Subadvisor by PVA, the
methodology used by the Subadvisor in determining the compensation payable to
portfolio managers and the competition for investment management talent; and the
Subadvisor's compliance record. The Board's opinion was based upon the extensive
experience of the portfolio managers and, in particular, their experience in
managing the Series as employees of Phoenix Investment Counsel, Inc., the
previous advisor for the Series. With respect to portfolio manager 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 Series' shareholders. The Board also considered the adequacy
of the Subadvisor's compliance program, based on the information provided by the
Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to the shareholders. While
consideration was given to performance reports and discussions at Board meetings
throughout the year, particular attention in assessing such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the 1, 3, 5
and 10 year periods ended September 30, 2007 and the year-to-date period ended
September 30, 2007. The Board reviewed the investment performance of the Series,
along with comparative performance information given for a peer group of funds
and a relevant market index. The Board noted that the Series had performed above
the index for the 1, 3, and 5 year periods ended September 30, 2007 and
performed below the index for the 10 year and year-to-date periods ended
September 30, 2007. The Series was ranked 33rd out of 49 for its peer group for
the year-to-date period ended September 30, 2006.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series and that the profitability of the Subadvisor was not a
material consideration.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders, but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
136
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX MULTI-SECTOR SHORT TERM BOND SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Goodwin
Capital Advisers, Inc. (the "Subadvisor"). Pursuant to the Advisory Agreement
between PVA and the Fund, PVA provides advisory services to the Series. Pursuant
to the Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor
provides the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to 18 mutual funds, and
its role under the Fund's "manager of managers" exemptive relief under the 1940
Act. The Board also considered the transfer agent and shareholder services that
are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1 and 3 year periods ended September 30, 2007 and the
year-to-date period ended September 30, 2007. The Board reviewed the investment
performance of the Series, along with comparative performance information given
for a peer group of funds and a relevant market index. The Board noted that the
Series had performed below the index for the year-to-date period ended September
30, 2007 and had performed above the index for the 1 and 3 year periods ended
September 30, 2007. The Board noted that the Series had the best performance
among its peer group for the 3 year period ended September 30, 2007. The Series
was ranked 27th out of 35 for its peer group for the year-to-date period ended
September 30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series since 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
methodology appeared reasonable. The Board also noted the contractual
reimbursements provided to the Series. The Board concluded that the expected
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were higher than the average total expenses for comparable funds and
that the contractual management fee was above the median for the peer group. The
Board considered the management fee and total expenses of the Series in
comparison to its expense peer group as shown in the Lipper report and concluded
that such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that the management fee breakpoints
based on the amount of assets under management. The Board also noted that it was
likely that PVA and the Series would achieve certain economies of scale with
respect to covering certain fixed costs as the assets grew. The Board concluded
that shareholders would have an opportunity to benefit from these economies of
scale.
137
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX MULTI-SECTOR SHORT TERM BOND SERIES
(THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by the Subadvisor to
the Series and its shareholders were reasonable. In addition, the Board received
from the Subadvisor and reviewed substantial written information as requested.
In the course of their deliberations and evaluation of materials, the Trustees
considered, among other things the following factors: the Subadvisor, its
current personnel (including particularly those personnel with responsibilities
for providing investment and compliance services to the Series), and its
financial condition, resources and investment process; the terms of the
Subadvisory Agreement, including the standard of care and termination
provisions; the scope and quality of the services that Subadvisor would provide
to the Series; the structure and rate of advisory fees payable to the Subadvisor
by PVA, the methodology used by the Subadvisor in determining the compensation
payable to portfolio managers and the competition for investment management
talent; and the Subadvisor's compliance record. The Board's opinion was based
upon the extensive experience of the portfolio managers and, in particular,
their experience in managing the Series as employees of Phoenix Investment
Counsel, Inc., the previous advisor for the Series. With respect to portfolio
manager 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 interest with those of the Series' shareholders. The Board also considered
the adequacy of the Subadvisor's compliance program, based on the information
provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to the shareholders. While
consideration was given to performance reports and discussions at Board meetings
throughout the year, particular attention in assessing such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the 1 and 3
year periods ended September 30, 2007 and the year-to-date period ended
September 30, 2007. The Board reviewed the investment performance of the Series,
along with comparative performance information for a peer group of funds and a
relevant market index. The Board noted that the Series had performed below the
index for the year-to-date period ended September 30, 2007 and had performed
above the index for the 1 and 3 year periods ended September 30, 2007. The Board
noted that the Series had the best performance among its peer group for the 3
year period ended September 30, 2007. The Series was ranked 27th out of 35 for
its peer group for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series and that the profitability of the Subadvisor was not a
material consideration.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders, but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
138
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX STRATEGIC ALLOCATION SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreements (the "Subadvisory Agreements") between PVA and Phoenix
Investment Counsel, Inc. ("PIC") and between PVA and Goodwin Capital Advisers,
Inc. ("Goodwin" and collectively with PIC the "Subadvisors"). Pursuant to the
Advisory Agreement between PVA and the Fund, PVA provides advisory services to
the Series. Pursuant to the Subadvisory Agreements between PVA and the
Subadvisors, the Subadvisors provide the day to day investment management for
the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisors' investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisors and will conduct compliance due
diligence visits at the Subadvisors. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to 18 mutual funds, and
its role under the Fund's "manager of managers" exemptive relief under the 1940
Act. The Board also considered the transfer agent and shareholder services that
are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3, 5 and 10 year periods ended September 30, 2007
and the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series performed above the index for the 10 year period
ended September 30, 2007 and had performed below the index for the 1, 3, and 5
year and year-to-date periods ended September 30, 2007. The Series ranked 79th
out of 131 for its peer group for the year-to-date period ended September 30,
2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series since 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
methodology appeared reasonable. The Board also noted the contractual
reimbursements provided to the Series. The Board concluded that the expected
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as its appropriate Lipper expense peer
group as of September 30, 2007. The Board noted that the total expenses of the
Series were above the average total expenses for comparable funds, but at the
median for total expenses for comparable funds. The Board noted that the
contractual management fee was at the median for the peer group. The Board
considered the management fee and total expenses of the Series in comparison to
its peer group as shown in the Lipper report and concluded that such fee and
expenses were reasonable.
ECONOMIES OF SCALE. The Board also noted that it was likely that PVA and the
Series would achieve certain economies of scale with respect to covering certain
fixed costs as the assets grew. The Board concluded that shareholders would have
an opportunity to benefit from these economies of scale.
139
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX STRATEGIC ALLOCATION SERIES
(THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by the Subadvisors to
the Series and its shareholders were reasonable. The Board considered the
division of the Series assets to be managed by the Subadvisors. Specifically,
PIC will manage the equity assets, and Goodwin will manage the fixed assets. In
addition, the Board received from the Subadvisors and reviewed substantial
written information as requested. In the course of their deliberations and
evaluation of materials, the Trustees considered, among other things the
following factors: the Subadvisors, their current personnel (including
particularly those personnel with responsibilities for providing investment and
compliance services to the Series), and their financial condition, resources and
investment process; the terms of the Subadvisory Agreements, including the
standard of care and termination provisions; the scope and quality of the
services that the Subadvisors would provide to the Series; the structure and
rate of advisory fees payable to the Subadvisors by PVA, the methodology used by
the Subadvisors in determining the compensation payable to portfolio managers
and the competition for investment management talent; and the Subadvisors'
compliance record. The Board's opinion was based upon the extensive experience
of the Subadvisors and the portfolio managers. The Board also considered PIC's
experience as the previous advisor for the Series. With respect to portfolio
manager compensation, the Board noted that a primary factor in the Subadvisors'
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 Series' shareholders. The Board also
considered the adequacy of the Subadvisors' compliance program, based on the
information provided by the Subadvisors.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to the shareholders. While
consideration was given to performance reports and discussions at Board meetings
throughout the year, particular attention in assessing such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the 1, 3, 5
and 10 year periods ended September 30, 2007 and the year-to-date period ended
September 30, 2007. The Board reviewed the investment performance of the Series,
along with comparative performance information given for a peer group of funds
and a relevant market index. The Board noted that the Series performed above the
index for the 10 year period ended September 30, 2007 and had performed below
the index for the 1, 3, and 5 year and year-to-date periods ended September 30,
2007. The Series was ranked 79th out of 131 for its peer group for the
year-to-date period ended September 30, 2007.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series and that the profitability of the Subadvisor was not a
material consideration.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders, but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
140
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-ABERDEEN INTERNATIONAL SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Aberdeen
Asset Management Inc. (the "Subadvisor"). Pursuant to the Advisory Agreement
between PVA and the Fund, PVA provides advisory services to the Series. Pursuant
to the Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor
provides the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to 18 mutual funds, and
its role under the Fund's "manager of managers" exemptive relief under the 1940
Act. The Board also considered the transfer agent and shareholder services that
are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3, 5 and 10 year periods ended September 30, 2007
and the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series had performed above the index for the 3 and 10 year
periods ended September 30, 2007 and had performed below the index for the 1 and
5 year and year-to-date periods ended September 30, 2007. The Series was ranked
96th out of 136 for its peer group for the year-to-date period ended September
30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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
methodology appeared reasonable. The Board also noted the contractual
reimbursements provided to the Series. The Board concluded that the expected
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the actual total
expenses of the Series were below the median average total expenses for
comparable funds and that the contractual management fee was below the median
for the peer group. The Board considered the management fee and total expenses
of the Series in comparison to its peer group as shown in the Lipper report and
concluded that such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale with respect to covering certain
fixed costs as the assets grew. The Board concluded that shareholders would have
an opportunity to benefit from these economies of scale.
141
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-ABERDEEN INTERNATIONAL SERIES
(THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by the Subadvisor to
the Series and its shareholders were reasonable. In addition, the Board received
from the Subadvisor and reviewed substantial written information as requested.
In the course of their deliberations and evaluation of materials, the Trustees
considered, among other things the following factors: the Subadvisor, its
current personnel (including particularly those personnel with responsibilities
for providing investment and compliance services to the Series), and its
financial condition, resources and investment process; the terms of the
subadvisory agreement, including the standard of care and termination
provisions; the scope and quality of the services that Subadvisor would provide
to the Series; the structure and rate of advisory fees payable to the Subadvisor
by PVA, the methodology used by the Subadvisor in determining the compensation
payable to portfolio managers and the competition for investment management
talent; and the Subadvisor's compliance record. The Board's opinion was based,
in part, upon the extensive experience of the Subadvisor and the portfolio
managers. In this regard, the Board noted that the portfolio management team has
many years of experience in the investment management business. With respect to
portfolio manager 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 Series' shareholders. The
Board also considered the adequacy of the Subadvisor's compliance program, based
on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to the shareholders. While
consideration was given to performance reports and discussions at Board meetings
throughout the year, particular attention in assessing such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the 1, 3, 5
and 10 year periods ended September 30, 2007 and the year-to-date period ended
September 30, 2007. The Board reviewed the investment performance of the Series,
along with comparative performance information given for a peer group of funds
and a relevant market index. The Board noted that the Series had performed above
the index for the 3 and 10 year periods ended September 30, 2007 and had
performed below the index for the 1 and 5 year and year-to-date periods ended
September 30, 2007. The Series was ranked 96th out of 136 for its peer group for
the year-to-date ended September 30, 2007.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series and that the profitability of the Subadvisor was not a
material consideration.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders, but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
142
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-ALGER SMALL-CAP GROWTH SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Fred Alger
Management, Inc. (the "Subadvisor"). Pursuant to the Advisory Agreement between
PVA and the Fund, PVA provides advisory services to the Series. Pursuant to the
Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor provides
the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
Series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to over 18 mutual funds,
and its role under the Fund's "manager of managers" exemptive relief under the
1940 Act. The Board also considered the transfer agent and shareholder services
that are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3, and 5 year periods ended September 30, 2007 and
the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with the comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series had performed above the index for all periods. The
Board also noted that it placed 20th among 103 in its peer group for the
year-to-date period ended September 30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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 voluntary reimbursements provided to the
Fund. The Board concluded that the profitability to PVA from the Series was
reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the actual total
expenses of the Series were below the average total expenses for comparable
funds and the contractual management fee was slightly higher compared to the
median for the peer group. The Board was satisfied with the management fee and
total expenses for the Series in comparison to its peer group as shown in the
Lipper report and concluded that such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale in order to cover certain fixed
costs as the assets grew. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
143
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-ALGER SMALL-CAP GROWTH SERIES
(THE "SERIES") (CONTINUED)
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
to the Series and its shareholders were reasonable. In addition, the Board
received from the Subadvisor and reviewed substantial written information as
requested. In the course of their deliberations and evaluation of materials, the
Trustees considered, among other things the following factors: the Subadvisor,
its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the subadvisory agreement, including the standard of care and
termination provisions; the scope and quality of the services that Subadvisor
would provide to the Series; the structure and rate of advisory fees payable to
Subadvisor by PVA, the methodology used by Subadvisor in determining the
compensation payable to portfolio managers and the competition for investment
management talent; and the Subadvisor's compliance record. The Board's opinion
was based, in part, upon the extensive experience of the Subadvisor and the
portfolio managers. In this regard, the Board noted that the portfolio
management team has many years of experience in the investment management
business. With respect to portfolio manager 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
Series' shareholders. The Board also considered the adequacy of the Subadvisor's
compliance program, based on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report of the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3, and 5 year periods ended September 30, 2007 and
the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series had performed above the index for all periods. The
Board also noted that it placed 20th among 103 in its peer group for the
year-to-date period.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not the Series.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
144
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Duff &
Phelps Investment Management Company (the "Subadvisor"). Pursuant to the
Advisory Agreement between PVA and the Fund, PVA provides advisory services to
the Series. Pursuant to the Subadvisory Agreement between PVA and the
Subadvisor, the Subadvisor provides the day to day investment management for the
Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to 18 mutual funds, and
its role under the Fund's "manager of managers" exemptive relief under the 1940
Act. The Board also considered the transfer agent and shareholder services that
are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3, 5 and 10 year periods ended September 30, 2007
and the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with the comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series had performed above the index and the Lipper peer
group average for the 3, 5, and 10 year periods ended September 30, 2007 and was
just slightly below the index for the 1 year period ended September 30, 2007.
The Series was ranked 33rd out of 60 for its peer group for the year-to-date
period ended September 30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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
methodology appeared reasonable. The Board also noted the contractual
reimbursements provided to the Series. The Board concluded that the expected
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were higher than the average total expenses for comparable funds, and
the contractual management fee was slightly higher than the median for the peer
group. The Board considered the management fee and total expenses of the Series
in comparison to its peer group as shown in the Lipper report and concluded that
such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale with respect to covering certain
fixed costs as the assets grew. The Board concluded that shareholders would have
an opportunity to benefit from these economies of scale.
145
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
(THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by the Subadvisor to
the Series and its shareholders were reasonable. In addition, the Board received
from the Subadvisor and reviewed substantial written information as requested.
In the course of their deliberations and evaluation of materials, the Trustees
considered, among other things the following factors: the Subadvisor, its
current personnel (including particularly those personnel with responsibilities
for providing investment and compliance services to the Series), and its
financial condition, resources and investment process; the terms of the
subadvisory agreement, including the standard of care and termination
provisions; the scope and quality of the services that the Subadvisor would
provide to the Series; the structure and rate of advisory fees payable to the
Subadvisor by PVA, the methodology used by the Subadvisor in determining the
compensation payable to portfolio managers and the competition for investment
management talent; and the Subadvisor's compliance records. The Board's opinion
was based upon the extensive experience of the Subadvisor and the portfolio
managers and the experience the Subadvisor had as the previous advisor for the
Series. With respect to portfolio manager 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
Series' shareholders. The Board also considered the adequacy of the Subadvisor's
compliance program, based on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to the shareholders. While
consideration was given to performance reports and discussions at Board meetings
throughout the year, particular attention in assessing such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for 1, 3, 5 and
10 year periods ended September 30, 2007 and the year-to-date period ended
September 30, 2007. The Board reviewed the investment performance of the Series,
along with comparative performance information given for a peer group of funds
and a relevant market index. The Board noted that the Series had performed above
the index and the Lipper peer group average for the 3, 5, and 10 year periods
ended September 30, 2007 and was just slightly below the index for the 1 year
period and year-to-date period ended September 30, 2007. The Series was ranked
33rd out of 60 for its peer group for the year-to-date period ended September
30, 2007.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not by the Series and that the profitability of the Subadvisor was not a
material consideration.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders, but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
146
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-S&P DYNAMIC ALLOCATION SERIES:
AGGRESSIVE GROWTH (THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Series' advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of the independent Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Standard &
Poor's Investment Advisory Services LLC ("SPIAS") (the "Subadvisor"). Pursuant
to the Advisory Agreement, PVA and the Fund, PVA provides advisory services to
the Series. Pursuant to the Subadvisory Agreement between PVA and Subadvisor,
the Subadvisor provides the day-to-day investment management for the Series.
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 reasonable and that approval of each agreement was in the best
interests of the Series and its shareholders. While attention was given to all
information furnished, the following discusses the primary factors relevant to
the Board's decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board's
conclusion was based, in part, upon services provided to the series such as
quarterly reports provided by PVA 1) comparing performance with a peer group and
benchmark, 2) showing that the investment policies and restrictions were
followed and 3) covering matters such as the compliance of investment personnel
and other access persons with the Code of Ethics of PVA, 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 and general
investment outlook. The Board noted that PVA was responsible for the general
oversight of investment programs and the monitoring of the Subadvisor's
investment performance and their compliance with applicable laws, regulations,
policies and procedures. With respect to compliance monitoring, the Board noted
that PVA required quarterly compliance certifications from the Subadvisor and
conducted compliance due diligence visits at the Subadvisor. The Board also
considered the experience of PVA having acted as an investment adviser to mutual
funds for 8 years, its current experience in acting as an investment adviser to
18 mutual funds, and its role under the Fund's "manager of managers" exemptive
relief under the 1940 Act. The Board also considered the transfer agent and
shareholder services that are provided to Series' shareholders by an affiliate
of PVA, 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 emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance for the Series' shares for the one year
period ended September 30, 2007 and the year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information given for a peer group of funds and a
relevant market index. The Board noted that the Series had performed above the
index for all periods. The Series was ranked 27th out of 176 for its peer group
for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board also considered the level of profits realized by
PVA and its affiliates in connection with the operation of the Series. In this
regard, the Board reviewed the Series profitability analysis that addressed the
overall profitability of PVA for its management of The Phoenix Edge Series Fund
family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since allocation methodologies are inherently subjective
and various allocation methodologies may each be reasonable while producing
different results. In this result, the Board noted that the allocation
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were below the average total expenses for comparable funds and the
contractual management fee was slightly lower than the median for the peer
group. The Board was satisfied with the management fee and total expenses of the
Series in comparison to its peer group as shown in the Lipper report and
concluded that the profitability to PVA from the Series was reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale as the assets grow covering
certain fixed costs. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
147
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-S&P DYNAMIC ALLOCATION SERIES:
AGGRESSIVE GROWTH (THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services that were to be provided by the
Subadvisor to the Series and its shareholders were reasonable. In addition, they
received from Subadvisor and reviewed substantial written information as
requested. In the course of deliberations and evaluations of materials, the
Trustees considered, among other things the following factors: the Subadvisor,
its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the subadvisory agreement, including the standard of care and
termination and provisions; the scope and quality of the services that
Subadvisor would provide to the Series; the structure and rate of advisory fees
payable to Subadvisor to PVA, the methodology used by Subadvisor in determining
the compensation payable to portfolio managers and the competition for
investment management talent; and the Subadvisor's compliance record. The
Board's opinion was based, in part, upon the experience of the Subadvisor and
the portfolio managers. With respect to portfolio manager 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 Series' shareholders. The Board also considered the adequacy
of the Subadvisor's compliance program, based on the information provided by the
Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the one year
period ended September 30, 2007 and year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information given for a peer group of funds and a
relevant market index. The Board noted that the Series had performed above the
index for all the periods. The Series was ranked 27th out of 176 for its peer
group for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board did not consider profitability information for the
Subadvisor noting that the subadvisory fee is pay by PVA and not the Series.
SUBADVISORY FEE. The Board considered that the subadvisory fee is paid by
PVA and not by the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
series level and not necessarily at the subadvisor level.
148
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-S&P DYNAMIC ALLOCATION SERIES: GROWTH
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Series' advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of the independent Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Standard &
Poor's Investment Advisory Services LLC ("SPIAS") (the "Subadvisor"). Pursuant
to the Advisory Agreement, PVA and the Fund, PVA provides advisory services to
the Series. Pursuant to the Subadvisory Agreement between PVA and Subadvisor,
the Subadvisor provides the day-to-day investment management for the Series.
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 reasonable and that approval of each agreement was in the best
interests of the Series and its shareholders. While attention was given to all
information furnished, the following discusses the primary factors relevant to
the Board's decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board's
conclusion was based, in part, upon services provided to the series such as
quarterly reports provided by PVA 1) comparing performance with a peer group and
benchmark, 2) showing that the investment policies and restrictions were
followed and 3) covering matters such as the compliance of investment personnel
and other access persons with the Code of Ethics of PVA, 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 and general
investment outlook. The Board noted that PVA was responsible for the general
oversight of investment programs and the monitoring of the Subadvisor's
investment performance and their compliance with applicable laws, regulations,
policies and procedures. With respect to compliance monitoring, the Board noted
that PVA required quarterly compliance certifications from the Subadvisor and
conducted compliance due diligence visits at the Subadvisor. The Board also
considered the experience of PVA having acted as an investment adviser to mutual
funds for 8 years, its current experience in acting as an investment adviser to
18 mutual funds, and its role under the Fund's "manager of managers" exemptive
relief under the 1940 Act. The Board also considered the transfer agent and
shareholder services that are provided to Series' shareholders by an affiliate
of PVA, 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 emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance for the Series' shares for the one year
period ended September 30, 2007 and the year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information given for a peer group of funds and a
relevant market index. The Board noted that the Series had performed above the
index for both periods. The Series was ranked 86th out of 216 for its peer group
for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board also considered the level of profits realized by
PVA and its affiliates in connection with the operation of the Series. In this
regard, the Board reviewed the Series profitability analysis that addressed the
overall profitability of PVA for its management of The Phoenix Edge Series Fund
family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since allocation methodologies are inherently subjective
and various allocation methodologies may each be reasonable while producing
different results. In this result, the Board noted that the allocation
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were below the average of total expenses for comparable funds and the
contractual management fee was slightly lower than the median for the peer
group. The Board was satisfied with the management fee and total expenses of the
Series in comparison to its peer group as shown in the Lipper report and
concluded that the profitability to PVA from the Series was reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale as the assets grow covering
certain fixed costs. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
149
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-S&P DYNAMIC ALLOCATION SERIES: GROWTH
(THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services that were to be provided by the
Subadvisor to the Series and its shareholders were reasonable. In addition, they
received from Subadvisor and reviewed substantial written information as
requested. In the course of deliberations and evaluations of materials, the
Trustees considered, among other things the following factors: the Subadvisor,
its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the subadvisory agreement, including the standard of care and
termination and provisions; the scope and quality of the services that
Subadvisor would provide to the Series; the structure and rate of advisory fees
payable to Subadvisor to PVA, the methodology used by Subadvisor in determining
the compensation payable to portfolio managers and the competition for
investment management talent; and the Subadvisor's compliance record. The
Board's opinion was based, in part, upon the experience of the Subadvisor and
the portfolio managers. With respect to portfolio manager 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 Series' shareholders. The Board also considered the adequacy
of the Subadvisor's compliance program, based on the information provided by the
Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the one year
period ended September 30, 2007 and year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information given for a peer group of funds and a
relevant market index. The Board noted that the Series had performed above the
index for both periods. The Series was ranked 86th out of 216 for its peer group
for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board did not consider profitability information for the
Subadvisor noting that the subadvisory fee is pay by PVA and not the Series.
SUBADVISORY FEE. The Board considered that the subadvisory fee is paid by
PVA and not by the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
series level and not necessarily at the subadvisor level.
150
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-S&P DYNAMIC ALLOCATION SERIES:
MODERATE (THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Series' advisory and subadvisory agreements. At a meeting held on November 13,
2007, the Board, including a majority of the independent Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Standard &
Poor's Investment Advisory Services LLC ("SPIAS") (the "Subadvisor"). Pursuant
to the Advisory Agreement, PVA and the Fund, PVA provides advisory services to
the Series. Pursuant to the Subadvisory Agreement between PVA and Subadvisor,
the Subadvisor provides the day-to-day investment management for the Series.
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 reasonable and that approval of each agreement was in the best
interests of the Series and its shareholders. While attention was given to all
information furnished, the following discusses the primary factors relevant to
the Board's decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board's
conclusion was based, in part, upon services provided to the series such as
quarterly reports provided by PVA 1) comparing performance with a peer group and
benchmark, 2) showing that the investment policies and restrictions were
followed and 3) covering matters such as the compliance of investment personnel
and other access persons with the Code of Ethics of PVA, 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 and general
investment outlook. The Board noted that PVA was responsible for the general
oversight of investment programs and the monitoring of the Subadvisor's
investment performance and their compliance with applicable laws, regulations,
policies and procedures. With respect to compliance monitoring, the Board noted
that PVA required quarterly compliance certifications from the Subadvisor and
conducted compliance due diligence visits at the Subadvisor. The Board also
considered the experience of PVA having acted as an investment adviser to mutual
funds for 8 years, its current experience in acting as an investment adviser to
18 mutual funds, and its role under the Fund's "manager of managers" exemptive
relief under the 1940 Act. The Board also considered the transfer agent and
shareholder services that are provided to Series' shareholders by an affiliate
of PVA, 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 emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the one year
period ended September 30, 2007 and the year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information given for a peer group of funds and a
relevant market index. The Board noted that the Series had performed above the
index for both periods. The Series was ranked 24th out of 131 for its peer group
for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board also considered the level of profits realized by
PVA and its affiliates in connection with the operation of the Series. In this
regard, the Board reviewed the Series profitability analysis that addressed the
overall profitability of PVA for its management of The Phoenix Edge Series Fund
family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since allocation methodologies are inherently subjective
and various allocation methodologies may each be reasonable while producing
different results. In this result, the Board noted that the allocation
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were below the average of total expenses for comparable funds and the
contractual management fee was slightly lower than the median for the peer
group. The Board was satisfied with the management fee and total expenses of the
Series in comparison to its peer group as shown in the Lipper report and
concluded that the profitability to PVA from the Series was reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale as the assets grow covering
certain fixed costs. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
151
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-S&P DYNAMIC ALLOCATION SERIES:
MODERATE (THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services that were to be provided by the
Subadvisor to the Series and its shareholders were reasonable. In addition, they
received from Subadvisor and reviewed substantial written information as
requested. In the course of deliberations and evaluations of materials, the
Trustees considered, among other things the following factors: the Subadvisor,
its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the subadvisory agreement, including the standard of care and
termination and provisions; the scope and quality of the services that
Subadvisor would provide to the Series; the structure and rate of advisory fees
payable to Subadvisor to PVA, the methodology used by Subadvisor in determining
the compensation payable to portfolio managers and the competition for
investment management talent; and the Subadvisor's compliance record. The
Board's opinion was based, in part, upon the experience of the Subadvisor and
the portfolio managers. With respect to portfolio manager 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 Series' shareholders. The Board also considered the adequacy
of the Subadvisor's compliance program, based on the information provided by the
Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the one year
period ended September 30, 2007 and year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information given for a peer group of funds and a
relevant market index. The Board noted that the Series had performed above the
index for both periods. The Series was ranked 24th out of 131 for its peer group
for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board did not consider profitability information for the
Subadvisor noting that the subadvisory fee is pay by PVA and not the Series.
SUBADVISORY FEE. The Board considered that the subadvisory fee is paid by
PVA and not by the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
series level and not necessarily at the subadvisor level.
152
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-S&P DYNAMIC ALLOCATION SERIES:
MODERATE GROWTH (THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Series' advisory and subadvisory agreements. At a meeting held on November 13,
2007, the Board, including a majority of the independent Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Standard &
Poor's Investment Advisory Services LLC ("SPIAS") (the "Subadvisor"). Pursuant
to the Advisory Agreement, PVA and the Fund, PVA provides advisory services to
the Series. Pursuant to the Subadvisory Agreement between PVA and Subadvisor,
the Subadvisor provides the day-to-day investment management for the Series.
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 reasonable and that approval of each agreement was in the best
interests of the Series and its shareholders. While attention was given to all
information furnished, the following discusses the primary factors relevant to
the Board's decision.
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board's
conclusion was based, in part, upon services provided to the series such as
quarterly reports provided by PVA 1) comparing performance with a peer group and
benchmark, 2) showing that the investment policies and restrictions were
followed and 3) covering matters such as the compliance of investment personnel
and other access persons with the Code of Ethics of PVA, 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 and general
investment outlook. The Board noted that PVA was responsible for the general
oversight of investment programs and the monitoring of the Subadvisor's
investment performance and their compliance with applicable laws, regulations,
policies and procedures. With respect to compliance monitoring, the Board noted
that PVA required quarterly compliance certifications from the Subadvisor and
conducted compliance due diligence visits at the Subadvisor. The Board also
considered the experience of PVA having acted as an investment adviser to mutual
funds for 8 years, its current experience in acting as an investment adviser to
18 mutual funds, and its role under the Fund's "manager of managers" exemptive
relief under the 1940 Act. The Board also considered the transfer agent and
shareholder services that are provided to Series' shareholders by an affiliate
of PVA, 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 emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the one year
period ended September 30, 2007 and the year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information given for a peer group of funds and a
relevant market index. The Board noted that the Series had performed above the
index for both periods. The Series was ranked 15th out of 72 for its peer group
for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board also considered the level of profits realized by
PVA and its affiliates in connection with the operation of the Series. In this
regard, the Board reviewed the Series profitability analysis that addressed the
overall profitability of PVA for its management of The Phoenix Edge Series Fund
family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since allocation methodologies are inherently subjective
and various allocation methodologies may each be reasonable while producing
different results. In this result, the Board noted that the allocation
profitability to PVA from the Series was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses
were below the average of the total expenses for comparable funds and the
contractual management fee was the same as than the median for the peer group.
The Board was satisfied with the management fee and total expenses of the Series
in comparison to its peer group as shown in the Lipper report and concluded that
the profitability to PVA from the Series was reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale as the assets grow covering
certain fixed costs. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
153
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-S&P DYNAMIC ALLOCATION SERIES:
MODERATE GROWTH (THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services that were to be provided by the
Subadvisor to the Series and its shareholders were reasonable. In addition, they
received from Subadvisor and reviewed substantial written information as
requested. In the course of deliberations and evaluations of materials, the
Trustees considered, among other things the following factors: the Subadvisor,
its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the subadvisory agreement, including the standard of care and
termination and provisions; the scope and quality of the services that
Subadvisor would provide to the Series; the structure and rate of advisory fees
payable to Subadvisor to PVA, the methodology used by Subadvisor in determining
the compensation payable to portfolio managers and the competition for
investment management talent; and the Subadvisor's compliance record. The
Board's opinion was based, in part, upon the experience of the Subadvisor and
the portfolio managers. With respect to portfolio manager 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 Series' shareholders. The Board also considered the adequacy
of the Subadvisor's compliance program, based on the information provided by the
Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper"), which was furnished for the contract renewal process. The Lipper
report showed the investment performance of the Series' shares for the one year
period ended September 30, 2007 and year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information given for a peer group of funds and a
relevant market index. The Board noted that the Series had performed above the
index for both periods. The Series was ranked 15th out of 72 for its peer group
for the year-to-date period ended September 30, 2007.
PROFITABILITY. The Board did not consider profitability information for the
Subadvisor noting that the subadvisory fee is pay by PVA and not the Series.
SUBADVISORY FEE. The Board considered that the subadvisory fee is paid by
PVA and not by the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
series level and not necessarily at the subadvisor level.
154
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and
Alliance/Bernstein L.P. (the "Subadvisor"). Pursuant to the Advisory Agreement
between PVA and the Fund, PVA provides advisory services to the Series. Pursuant
to the Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor
provides the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
Series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to over 18 mutual funds,
and its role under the Fund's "manager of managers" exemptive relief under the
1940 Act. The Board also considered the transfer agent and shareholder services
that are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3 and 5 year periods ended September 30, 2007 and
the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with the comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series had performed above the index for all periods. The
Series was ranked 25th out of 65 for its peer group for the year-to-date period
ended September 30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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 voluntary reimbursements provided to the
Fund. The Board concluded that the profitability to PVA from the Series was
reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were above the total expenses for comparable funds and the
contractual management fee was above the median for the peer group. The Board
was satisfied with the management fee and total expenses for the Series in
comparison to its peer group as shown in the Lipper report and concluded that
such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale in order to cover certain fixed
costs as the assets grew. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
155
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
(THE "SERIES") (CONTINUED)
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
to the Series and its shareholders were reasonable. In addition, the Board
received from the Subadvisor and reviewed substantial written information as
requested. In the course of their deliberations and evaluation of materials, the
Trustees considered, among other things the following factors: the Subadvisor,
its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the subadvisory agreement, including the standard of care and
termination provisions; the scope and quality of the services that Subadvisor
would provide to the Series; the structure and rate of advisory fees payable to
Subadvisor by PVA, the methodology used by Subadvisor in determining the
compensation payable to portfolio managers and the competition for investment
management talent; and the Subadvisor's compliance record. The Board's opinion
was based, in part, upon the extensive experience of the Subadvisor and the
portfolio managers. In this regard, the Board noted that the portfolio
management team has many years of experience in the investment management
business. With respect to portfolio manager 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
Series' shareholders. The Board also considered the adequacy of the Subadvisor's
compliance program, based on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report of the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3 and 5 year periods ended September 30, 2007 and
the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series had performed above the index for all periods. The
Series was ranked 25th out of 65 for its peer group for the year-to-date period
ended September 30, 2007.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not the Series.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
156
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Fund's advisory and subadvisory agreements. At a meeting held on November 12,
2007, the Board, including a majority of disinterested Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and
Alliance/Bernstein L.P. (the "Subadvisor"). Pursuant to the Advisory Agreement
between PVA and the Fund, PVA provides advisory services to the Series. Pursuant
to the Subadvisory Agreement between PVA and the Subadvisor, the Subadvisor
provides the day to day investment management for the Series.
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 disinterested Trustees, determined that the
fee structure was reasonable and approving the renewals was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board
received and reviewed substantial written information from PVA as requested. The
Board's conclusion was based, in part, upon services provided by PVA to other
Series of The Phoenix Edge Series Fund such as quarterly reports provided by PVA
1) comparing performance with a peer group and benchmark, 2) showing that the
investment policies and restrictions were followed and 3) covering matters such
as the compliance of investment personnel and other access persons with the Code
of Ethics of PVA, 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 and general investment outlook. The Board noted that
PVA was responsible for the general oversight of investment programs and the
monitoring of subadvisor's investment performance and their compliance with
applicable laws, regulations, policies and procedures. With respect to
compliance monitoring, the Board noted that PVA will require quarterly
compliance certifications from the Subadvisor and will conduct compliance due
diligence visits at the Subadvisor. The Board also considered the experience of
PVA having acted as an investment adviser to mutual funds for 8 years, its
current experience in acting as an investment adviser to over 18 mutual funds,
and its role under the Fund's "manager of managers" exemptive relief under the
1940 Act. The Board also considered the transfer agent and shareholder services
that are provided to Series shareholders by an affiliate of PVA, 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 emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report for the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3 and 5 year periods ended September 30, 2007 and
the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with the comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series had performed above the index for all the periods.
The Series was ranked 4th out of 42 for its peer group for the year-to-date
period ended September 30, 2007.
PROFITABILITY. The Board reviewed the profitability analysis that addressed
the overall profitability of PVA for its management of The Phoenix Edge Series
Fund family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, since 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 voluntary reimbursements provided to the
Fund. The Board concluded that the profitability to PVA from the Series was
reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed emphasis on the
review of Series expenses. Consideration was given to a comparative analysis of
the management fees and total expense ratios of the Series compared with those
of a group of funds selected by Lipper as the Series' appropriate Lipper expense
peer group as of September 30, 2007. The Board noted that the total expenses of
the Series were above the average total expenses for comparable funds and that
the contractual management fee was above the median for the peer group. The
Board was satisfied with the management fee and total expenses for the Series in
comparison to its peer group as shown in the Lipper report and concluded that
such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale in order to cover certain fixed
costs as the assets grew. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
157
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
(THE "SERIES") (CONTINUED)
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
to the Series and its shareholders were reasonable. In addition, the Board
received from the Subadvisor and reviewed substantial written information as
requested. In the course of their deliberations and evaluation of materials, the
Trustees considered, among other things the following factors: the Subadvisor,
its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the subadvisory agreement, including the standard of care and
termination provisions; the scope and quality of the services that Subadvisor
would provide to the Series; the structure and rate of advisory fees payable to
Subadvisor by PVA, the methodology used by Subadvisor in determining the
compensation payable to portfolio managers and the competition for investment
management talent; and the Subadvisor's compliance record. The Board's opinion
was based, in part, upon the extensive experience of the Subadvisor and the
portfolio managers. In this regard, the Board noted that the portfolio
management team has many years of experience in the investment management
business. With respect to portfolio manager 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
Series' shareholders. The Board also considered the adequacy of the Subadvisor's
compliance program, based on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series in view of its importance to shareholders. In this
regard, the Board considered the detailed performance review process of the
Investment Performance Committee. While consideration was given to performance
reports and discussions at Board meetings throughout the year, particular
attention in assessing such performance was given to a report of the Series
prepared by Lipper Financial Services ("Lipper"), which was furnished for the
contract renewal process. The Lipper report showed the investment performance of
the Series' shares for the 1, 3 and 5 year periods ended September 30, 2007 and
the year-to-date period ended September 30, 2007. The Board reviewed the
investment performance of the Series, along with comparative performance
information given for a peer group of funds and a relevant market index. The
Board noted that the Series had performed above the index for all the periods.
The Series was ranked 4th out of 42 for its peer group for the year-to-date
period ended September 30, 2007.
PROFITABILITY. The Board noted that the subadvisory fee is paid by PVA and
not the Series.
SUBADVISORY FEE. The Board did not receive comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
advisor level and not necessarily at the subadvisor level.
158
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-VAN KAMPEN COMSTOCK SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Series' advisory and subadvisory agreements. At a meeting held on November 13,
2007, the Board, including a majority of the independent Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Morgan
Stanley Investment Management, Inc. d/b/a Van Kampen ("Van Kampen") (the
"Subadvisor"). Pursuant to the Advisory Agreement, PVA and the Fund, PVA
provides advisory services to the Series. Pursuant to the Subadvisory Agreement
between PVA and Subadvisor, the Subadvisor provides the day-to-day investment
management for the Series.
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 reasonable and that approval of each agreement was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board's
conclusion was based, in part, upon services provided to the Series such as
quarterly reports provided by PVA 1) comparing the performance of the Series
with a peer group and benchmark, 2) showing that the investment policies and
restrictions for the Series were followed and 3) covering matters such as the
compliance of investment personnel and other access persons with the Code of
Ethics of PVA and the Series, 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 and general investment outlook. The Board
noted that PVA was responsible for the general oversight of the investment
programs of the Series and the monitoring of the Subadvisor's investment
performance and its compliance with applicable laws, regulations, policies and
procedures. With respect to compliance monitoring, the Board noted that PVA
required quarterly compliance certifications from the Subadvisor and conducted
compliance due diligence visits at the Subadvisor. The Board also considered the
experience of PVA having acted as an investment adviser to mutual funds for 8
years, its current experience in acting as an investment adviser to 18 mutual
funds, and its role under the Fund's "manager of managers" exemptive relief
under the Investment Company Act of 1940. The Board also considered the transfer
agent and shareholder services that are provided to Series' shareholders by an
affiliate of PVA, 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 emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper") furnished for the contract renewal process. The Lipper report showed
the investment performance of the Series' shares for the 1, 3, and 5 year
periods ended September 30, 2007 and the year-to-date period September 30, 2007.
The Board reviewed the investment performance of the Series, along with
comparative performance information with a peer group of funds and a relevant
market index. The Board noted that the Series had underperformed its benchmark
for all periods ended September 30, 2007. The Series was ranked 74th out of 87
for its peer group for the year-to-date period ended September 30, 2007. The
Board noted that the Subadvisor had been managing the Series for less than
twenty-four months in its consideration of the quality of the Subadvisor's
investment performance. The Board further noted that it would review the
Subadvisor's investment performance each quarter in 2008.
PROFITABILITY. The Board also considered the level of profits realized by
PVA and its affiliates in connection with the operation of the Series. In this
regard, the Board reviewed the Series profitability analysis that addressed the
overall profitably of PVA for its management of The Phoenix Edge Series Fund
family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, 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 that the voluntary
reimbursements provided to the Series. The Board concluded that the
profitability to PVA from the Series were reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also considered the expenses of
the Series. Consideration was given to a comparative analysis of the management
fees and total expense ratios of the Series compared with those of a group of
other funds selected by Lipper as its appropriate Lipper expense group under the
Lipper report. The Board noted that the total expenses of the Series were above
the average total expenses for comparable funds and that the management fee was
above the median for the peer group. The Board was satisfied with the management
fee and total expenses of the Series in comparison to its expense group as shown
in the Lipper report and concluded that such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board also noted that it was likely that PVA and the
Series would achieve certain economies of scale as the assets grew covering
certain fixed costs. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
159
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-VAN KAMPEN COMSTOCK SERIES
(THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services that are to be provided by the
Subadvisor to the Series and its shareholders were reasonable. In addition, the
Board received from the Subadvisor and reviewed substantial written information
as requested. In the course of their deliberations and evaluation of materials,
the Trustees considered, among other things the following factors: the
Subadvisor, its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the Subadvisory Agreement, including the standard of care and
termination provisions; the scope and quality of the services that Subadvisor
would provide to the Series; the structure and rate of advisory fees payable to
the Subadvisor by PVA, the methodology used by the Subadvisor in determining the
compensation payable to portfolio managers and the competition for investment
management talent; and the Subadvisor's compliance record. The Board's opinion
was based upon the extensive experience of the Subadvisor and the portfolio
managers. With respect to portfolio manager 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
Series' shareholders. The Board also considered the adequacy of the Subadvisor's
compliance program, based on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed emphasis on the investment
performance of the Series 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 such performance was
given to a report for the Series prepared by Lipper Financial Services
("Lipper") furnished for the contract renewal process. The Lipper report showed
the investment performance of the Series' shares for the 1, 3, and 5 year
periods ended September 30, 2007 and the year-to-date period September 30, 2007.
The Board reviewed the investment performance of the Series, along with
comparative performance information with a peer group of funds and a relevant
market index. The Board noted that the Series had underperformed its benchmark
for all periods ended September 30, 2007. The Series was ranked 74th out of 87
for its peer group for the year-to-date period ended September 30, 2007. The
Board noted that the Subadvisor had been managing the Series for less than
twenty-four months in its consideration of the quality of the Subadvisor's
investment performance. The Board further noted that it would review the
Subadvisor's investment performance each quarter in 2008.
PROFITABILITY. The Board did not consider profitability information for the
Subadvisor noting that the subadvisory fee is paid by PVA and not by the Series.
SUBADVISORY FEE. The Board did not consider comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
fund level and not necessarily at the subadvisor level.
160
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES
(THE "SERIES")
The Board of Trustees is responsible for determining whether to approve the
Series' advisory and subadvisory agreements. At a meeting held on November 13,
2007, the Board, including a majority of the independent Trustees, approved the
renewal of the investment advisory agreement (the "Advisory Agreement") between
Phoenix Variable Advisors, Inc. ("PVA") and the Fund and the investment
subadvisory agreement (the "Subadvisory Agreement") between PVA and Morgan
Stanley Investment Management, Inc. d/b/a Van Kampen ("Van Kampen") (the
"Subadvisor"). Pursuant to the Advisory Agreement, PVA and the Fund, PVA
provides advisory services to the Series. Pursuant to the Subadvisory Agreement
between PVA and Subadvisor, the Subadvisor provides the day-to-day investment
management for the Series.
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 reasonable and that approval of each agreement was in the best
interests of the Series 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 to be provided by PVA and its
affiliates to the Series and its shareholders were reasonable. The Board's
conclusion was based, in part, upon services provided to the Series such as
quarterly reports provided by PVA 1) comparing the performance of the Series
with a peer group and benchmark, 2) showing that the investment policies and
restrictions for the Series were followed and 3) covering matters such as the
compliance of investment personnel and other access persons with the Code of
Ethics of PVA and the Series, 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 and general investment outlook. The Board
noted that PVA was responsible for the general oversight of the investment
programs of the Series and the monitoring of the Subadvisor's investment
performance and its compliance with applicable laws, regulations, policies and
procedures. With respect to compliance monitoring, the Board noted that PVA
required quarterly compliance certifications from the Subadvisor and conducted
compliance due diligence visits at the Subadvisor. The Board also considered the
experience of PVA having acted as an investment adviser to mutual funds for 8
years, its current experience in acting as an investment adviser to 18 mutual
funds, and its role under the Fund's "manager of managers" exemptive relief
under the Investment Company Act of 1940. The Board also considered the transfer
agent and shareholder services that are provided to Series' shareholders by an
affiliate of PVA, 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 Series 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 such performance
was given to a report for the Series prepared by Lipper Financial Services
("Lipper") furnished for the contract renewal process. The Lipper report showed
the investment performance of the Series' shares for the 1, 3, 5 and 10 year
periods ended September 30, 2007 and the year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information with a peer group of funds and a relevant
market index. The Board noted that the Series had performed below its benchmark
for all the periods ended September 30, 2007. The Series was ranked 125th out of
208 for its peer group for the year-to-date period ended September 30, 2007. The
Board noted that the Subadvisor had been managing the Series for less than
twenty-four months in its consideration of the quality of the Subadvisor's
investment performance. The Board further noted that it would review the
Subadvisor's investment performance each quarter in 2008.
PROFITABILITY. The Board also considered the level of profits realized by
PVA and its affiliates in connection with the operation of the Series. In this
regard, the Board reviewed the Series profitability analysis that addressed the
overall profitably of PVA for its management of The Phoenix Edge Series Fund
family, as well as its profits and that of its affiliates, for managing the
Series. Specific attention was given to the methodology followed in allocating
costs to the Series, 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 that the voluntary
reimbursements provided to the Series. The Board concluded that the
profitability to PVA from the Series were reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed significant
emphasis on the review of expenses of the Series. Consideration was given to a
comparative analysis of the management fees and total expense ratios of the
Series compared with those of a group of other funds selected by Lipper as its
appropriate Lipper expense group under the Lipper report. The Board noted that
the total expenses of the Series were slightly above the average total expenses
for comparable funds and the contractual management fee was above the median for
the peer group. The Board was satisfied with the management fee and total
expenses of the Series in comparison to its expense group as shown in the Lipper
report and concluded that such fee and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that it was likely that PVA and the
Series would achieve certain economies of scale as the assets grew covering
certain fixed costs. The Board concluded that shareholders would have an
opportunity to benefit from these economies of scale.
161
THE PHOENIX EDGE SERIES FUND
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND
SUBADVISORY AGREEMENTS FOR PHOENIX-VAN KAMPEN EQUITY 500 INDEX SERIES
(THE "SERIES") (CONTINUED)
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services that are to be provided by the
Subadvisor to the Series and its shareholders were reasonable. In addition, the
Board received from the Subadvisor and reviewed substantial written information
as requested. In the course of their deliberations and evaluation of materials,
the Trustees considered, among other things the following factors: the
Subadvisor, its current personnel (including particularly those personnel with
responsibilities for providing investment and compliance services to the
Series), and its financial condition, resources and investment process; the
terms of the Subadvisory Agreement, including the standard of care and
termination provisions; the scope and quality of the services that Subadvisor
would provide to the Series; the structure and rate of advisory fees payable to
the Subadvisor by PVA, the methodology used by the Subadvisor in determining the
compensation payable to portfolio managers and the competition for investment
management talent; and the Subadvisor's compliance record. The Board's opinion
was based upon the extensive experience of the Subadvisor and the portfolio
managers. With respect to portfolio manager 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
Series' shareholders. The Board also considered the adequacy of the Subadvisor's
compliance program, based on the information provided by the Subadvisor.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the
investment performance of the Series 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 such performance
was given to a report for the Series prepared by Lipper Financial Services
("Lipper") furnished for the contract renewal process. The Lipper report showed
the investment performance of the Series' shares for the 1, 3, 5 and 10 year
periods ended September 30, 2007 and the year-to-date period ended September 30,
2007. The Board reviewed the investment performance of the Series, along with
comparative performance information with a peer group of funds and a relevant
market index. The Board noted that the Series had performed below its benchmark
for all the periods ended September 30, 2007. The Series was ranked 125th out of
208 for its peer group for the year-to-date period ended September 30, 2007. The
Board noted that the Subadvisor had been managing the Series for less than
twenty-four months in its consideration of the quality of the Subadvisor's
investment performance. The Board further noted that it would review the
Subadvisor's investment performance each quarter in 2008.
PROFITABILITY. The Board considered the profitability information for the
Subadvisor noting that the subadvisory fee is paid by PVA and not by the Series.
SUBADVISORY FEE. The Board did not consider comparative fee information of
subadvisory fees but noted that the subadvisory fee is paid by PVA and not by
the Series.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Series'
shareholders but noted that any economies would most likely be generated at the
fund level and not necessarily at the subadvisor level.
162
FUND MANAGEMENT TABLES
Information pertaining to the Trustees and officers of the Trust as of December
31, 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) 541-0171.
The address of each individual, unless otherwise noted, is 101 Munson Street,
Greenfield, MA 01301-9668.
DISINTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NAME
YEAR OF BIRTH
YEAR ELECTED PRINCIPAL OCCUPATION(S)
# OF PORTFOLIOS IN FUND COMPLEX DURING PAST 5 YEARS AND
OVERSEEN BY TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
Frank M. Ellmer, CPA Retired.
YOB: 1940
Elected: 1999
18 Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
John A. Fabian* Retired.
YOB: 1934
Elected: 1999
18 Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
Roger A. Gelfenbien Retired. Director, Webster Bank (2003-present). Director USAllianz Variable Insurance Product
YOB: 1943 Trust, 23 funds (1999-present). Chairman/Trustee, The University of Connecticut (1997-2003).
Elected: 2000
18 Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
Eunice S. Groark Attorney. Director, Peoples' Bank (1995-present).
YOB: 1938
Elected: 1999
18 Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
Frank E. Grzelecki Retired. Director, Barnes Group Inc. (1997-present).
YOB: 1937
Elected: 2000
18 Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
John R. Mallin Partner/Attorney, McCarter & English, LLP (2003-present); Principal/Attorney, Cummings &
YOB: 1950 Lockwood, LLC (1996-2003).
Elected: 1999
18 Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
* Retired from Phoenix Edge Series Fund ("PESF") on December 31, 2007.
163
FUND MANAGEMENT TABLES
Each of the individuals listed below is an "interested person" of the Fund, as
defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
INTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NAME
YEAR OF BIRTH
YEAR ELECTED PRINCIPAL OCCUPATION(S)
# OF PORTFOLIOS IN FUND COMPLEX DURING PAST 5 YEARS AND
OVERSEEN BY TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
** Philip R. McLoughlin Partner, Cross Pond Partners, LLC, (2006-present). Director, PXRE Corporation (Reinsurance)
YOB: 1946 (1985-present), World Trust Fund (1991-present). Director/Trustee, Phoenix Funds Complex
Elected 2003 (1989-present). Management Consultant (2002-2004), Chairman (1997-2002), Chief Executive
Chairman Officer (1995-2002) and Director (1995-2002), Phoenix Investment Partners, Ltd. Director and
80 Portfolios Executive Vice President, The Phoenix Companies, Inc. (2000-2002). Director (1994-2002) and
Executive Vice President, Investments (1987-2002), Phoenix Life Insurance Company. Director
(1983-2002) and Chairman (1995-2002), Phoenix Investment Counsel, Inc. Director (1982-2002),
and Chairman (2000-2002), 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) and 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).
- ------------------------------------------------------------------------------------------------------------------------------------
*** Philip K. Polkinghorn Executive Vice President, The Phoenix Companies, Inc. (2004-present). Vice President, Sun Life
One American Row Financial Company (2001-2004).
Hartford, CT 06102
YOB: 1957
Elected 2004
President
18 Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
** 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.
*** Mr. Polkinghorn is an "interested person" as defined under the Investment Company Act of 1940, by reason of his position with
the Trust's advisors and/or their affiliates.
</FN>
164
FUND MANAGEMENT TABLES
- ------------------------------------------------------------------------------------------------------------------------------------
NAME, ADDRESS, YEAR OF BIRTH AND LENGTH OF PRINCIPAL OCCUPATION(S)
POSITION(S) WITH TRUST TIME SERVED DURING PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Gina Collopy O'Connell Served since 2004 Senior Vice President, Life and Annuity Planning (2004-present); Senior
One American Row Vice President, Life and Annuity Manufacturing (2003-2004); Senior Vice
Hartford, CT 06102 President, Life and Annuity Operations (2002-2003); Vice President,
YOB: 1962 various marketing and product development departments (1998-2002),
Senior Vice President Phoenix Life Insurance Company. Senior Vice President, PHL Variable
Insurance Company (2003-present). Director, Phoenix Distribution Holding
Company (2003-present). Senior Vice President, Phoenix Life and Annuity
Company, (2004-present). Director and Senior Vice President, Phoenix
Variable Advisors, Inc. (2005-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Nancy G. Curtiss Served since 1994 Vice President, Fund Accounting (1994-2000), Treasurer (1996-2000),
56 Prospect Street Assistant Treasurer (2001-present), Phoenix Equity Planning Corporation.
Hartford, CT 06115 Vice President, Phoenix Investment Partners, Ltd. (2003-present). Chief
YOB: 1952 Financial Officer and Treasurer or Assistant Treasurer, certain Funds
Senior Vice President within the Phoenix Fund Complex (1994-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Marc Baltuch Served since 2004 Chief Compliance Officer, Zweig-DiMenna Associates LLC (1989-present);
900 Third Avenue Vice President and Compliance Officer, certain of the Funds within the
New York, NY 10022 Phoenix Fund Complex; Vice President, The Zweig Total Return Fund, Inc.
YOB: 1945 (2004-present); Vice President, The Zweig Fund, Inc. (2004-present);
Chief Compliance Officer President and Director of Watermark Securities, Inc. (1991-present);
Assistant Secretary of Gotham Advisors Inc. (1990-present); Secretary,
Phoenix-Zweig Trust (1969-2003); Secretary, Phoenix-Euclid Market Neutral
Fund (1999-2002).
- ------------------------------------------------------------------------------------------------------------------------------------
W. Patrick Bradley Served since 2006 Vice President, Mutual Fund Administration, Phoenix Investment Partners,
56 Prospect Street Ltd. (2004-present). Chief Financial Officer and Treasurer
Hartford, CT 06115 (2005-present), certain funds within the Phoenix Fund Family. Assistant
YOB: 1972 Treasurer, certain funds within the Phoenix Fund Complex (2004-present).
Vice President, Chief Financial Senior Manager (2002-2004), Manager (2000-2002), Audit Services, Deloitte
Officer, Treasurer and & Touche, LLP.
Principal Accounting Officer
- ------------------------------------------------------------------------------------------------------------------------------------
Kathleen A. McGah Served since 2005 Vice President and Counsel, Phoenix Life Insurance Company
One American Row (2005-present); Vice President and Assistant Secretary, PHL Variable
Hartford, CT 06102 Insurance Company (2005-present); Vice President and Assistant Secretary,
YOB: 1950 American Phoenix Life and Reassurance Company (2005-present); Vice
Vice President, Chief Legal President and Assistant Secretary, Phoenix Life and Annuity Company
Officer, Counsel and Secretary (2005-present); Vice President and Assistant Secretary, Phoenix Variable
Advisors, Inc. (2005-present); and Vice President and Assistant
Secretary, Phoenix Investment Counsel, Inc. (2006-present). Chief Legal
Officer and Secretary of five mutual funds and six variable annuity
separate accounts within the Travelers Life & Annuity complex
(2004-2005), Assistant Secretary (1995-2004) of five mutual funds and six
variable annuity separate accounts within the Travelers Life & Annuity
complex. Deputy General Counsel (1999-2005), The Travelers Insurance
Company.
- ------------------------------------------------------------------------------------------------------------------------------------
165
THE PHOENIX EDGE SERIES FUND
101 Munson Street
Greenfield, MA 01301
BOARD OF TRUSTEES
Frank M. Ellmer, CPA
John A. Fabian*
Roger A. Gelfenbien
Eunice S. Groark
Frank E. Grzelecki
John R. Mallin
Philip R. McLoughlin
Philip K. Polkinghorn
EXECUTIVE OFFICERS
Philip R. McLoughlin, Chairman
Philip K. Polkinghorn, President
Gina Collopy O'Connell, Senior Vice President
Nancy G. Curtiss, Senior Vice President
Marc Baltuch, Chief Compliance Officer
W. Patrick Bradley, Vice President, Chief Financial Officer, Treasurer and
Principal Accounting Officer
Kathleen A. McGah, Vice President, Chief Legal Officer, Counsel and Secretary
INVESTMENT ADVISOR
Phoenix Variable Advisors, Inc.
One American Row
Hartford, CT 06102-5056
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110-1707
*Retired 12/31/07.
THIS PAGE INTENTIONALLY BLANK.
THIS PAGE INTENTIONALLY BLANK.
------------
[GRPAHIC OMITTED] PRSRT STD
PHOENIX U.S. POSTAGE
PAID
Andrew
PHOENIX LIFE INSURANCE COMPANY Associates
PO Box 22012 ------------
Albany, NY 12201-2012
================================================================================
NOT INSURED BY FDIC/NCUSIF OR ANY FEDERAL GOVERNMENT AGENCY.
NO BANK GUARANTEE. NOT A DEPOSIT. MAY LOSE VALUE.
Phoenix Life Insurance Company
A member of The Phoenix Companies, Inc.
phoenixwm.com
BPDXXXX
GO144A (C) 2007 The Phoenix Companies, Inc. 2-08
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) Frank M. Ellmer 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. Ellmer
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
- ----------
(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 $401,900 for 2007 and $519,900 for 2006.
Audit-Related Fees
- ------------------
(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 $18,000 for 2007 and $26,000 for 2006. This represents the
review of the semi-annual financial statements.
Tax Fees
- --------
(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 $53,600 for 2007 and
$95,050 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 tax returns.
All Other Fees
- --------------
(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 Edge Series Fund (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. Ellmer, 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 and 100% for 2006
(c) 100% for 2007 and 100% for 2006
(d) Not applicable for 2007 and 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 $660,559 for 2007 and $961,830 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) The Phoenix Edge Series Fund
--------------------------------------------------------------------
By (Signature and Title)* /s/ Philip K. Polkinghorn
-------------------------------------------------------
Philip K. Polkinghorn, President
(principal executive officer)
Date March 7, 2008
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Philip K. Polkinghorn
-------------------------------------------------------
Philip K. Polkinghorn, President
(principal executive officer)
Date March 7, 2008
----------------------------------------------------------------------------
By (Signature and Title)* /s/ W. Patrick Bradley
-------------------------------------------------------
W. Patrick Bradley, Vice President, Chief
Financial Officer, Treasurer and
Principal Accounting Officer
(principal financial officer)
Date March 7, 2008
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.