1933 Act/Correspondence
December 29, 2004
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Phoenix Investment Trust 97
File No. 333-34537
Post-Effective Amendment No. 18
To the Commission Staff:
On December 9, 2004, Phoenix Investment Trust 97 filed a Post-Effective
Amendment to its Registration Statement on Form N-1A, the purpose of which was
to provide for SEC review all disclosures required under recent rulemaking and
to make certain other changes of a non-material nature. This letter is in
response to the comments received on said amendment filing from our examiner,
Brion Thompson on December 22, 2004.
1. Page 1, Principal Investment Strategies, first paragraph. We were
advised to include the standard 60-day notice requirement if the fund's
principal investment strategy of investing at least 80% of its assets
in small cap issuers is not a fundamental investment policy. As the 80%
policy is a non-fundamental policy, we have added the requested
disclosure.
2. Page 1, Principal Investment Strategies, first paragraph. We were
requested to clarify the fund's strategy with respect to market
capitalization. Since the fund is required to invest only 80% in small
cap issuers, other investments could include issuers having larger
capitalizations. Since the fund generally uses the stocks included in
the Russell 2000 Value Index as its universe, these other investments
could conceivably be considered medium capitalization issuers. We
therefore believe that including the risks associated with medium
capitalization companies is appropriate.
3. Page 1, Principal Investment Strategies, second paragraph. We were
requested to clarify in this response letter how our description of the
fund's investment strategy is an appropriate description for "value"
investing or, alternatively, to revise the disclosure to better reflect
value indicators. We wish to note that the fund's management process
screens stocks included in the Russell 2000 Value Index, which in and
of itself would indicate a value strategy. For clarity, however, we
have revised the second sentence of this strategy to read: "The
screening process utilizes a proprietary model that looks at indicators
such as price to earnings, price to cash flow, growth in earnings and
cash flow, earnings momentum, and a variety of other similar metrics."
We believe that this revised disclosure is fully responsive to this
comment.
4. Our examiner noted that we had not included the disclosure required by
new Item 4(d). We have inserted the following at the end of the
italicized paragraph on page 14: "A description of the funds' policies
and procedures with respect to the disclosure of the funds' portfolio
securities is also available in the Statement of Additional
Information."
5. Page 15, "How is the Share Price Determined?" As required by the
instruction to Item 6(a)(1), we were requested to provide disclosure as
to the effects of using fair value pricing. In response,
we have added the following statement at the end of the subsection
entitled "How are Securities Fair Valued?" on page 16: "The value of a
security as determined using the funds' fair valuation procedures may
not reflect such security's actual value."
6. Page 14, Disruptive Trading and Market Timing. We were requested to
provide a response to Item 6(e)(4)(i) as to whether or not the Fund
discourages frequent purchases and redemptions of Fund shares. We refer
you to the first sentence in this section: "These funds are not
suitable for market timers and market timers are discouraged from
becoming investors." We have also added a phrase in the sentence in the
third paragraph describing the market timing policies adopted by the
Board of Trustees to indicate that such policies and procedures are
"designed to discourage Disruptive Trading."
7. Page 24, Disruptive Trading and Market Timing. Our examiner indicated
that our disclosure was thought to be lacking in a number of areas,
such as (i) specifying exactly what modifications we may make to
shareholder exchange privileges; (ii) specifying whether any exchange
restrictions are applied uniformly and if not, to disclose with
specificity when they are not; and (iii) specifying what limits are
imposed on exchanges and to whom they apply. We have enhanced and
re-ordered the disclosure as previously provided. We believe that in
the revised version, the information provided flows more logically,
which facilitates identification of our disclosure pertaining to each
of your comments. We believe the revised version of the Disruptive
Trading and Market Timing disclosure is now fully responsive to the
SEC's comments, as well as to the requirements of Item 6(e) of Form
N-1A.
8. Page 25, Disruptive Trading and Market Timing. We were asked to clarify
our intentions in the use of the term "person" in the last paragraph.
We have amended this sentence to read: "The funds do not have any
arrangements with any person, organization or entity to permit frequent
purchases and redemptions of fund shares."
9. Prospectus back cover page. Our examiner noted that the 485(a) filing
did not include the back cover for the prospectus. Generally, front and
back covers have been omitted from 485(a) filings, but are always
included in the 485(b) filing. This method allows us to include the
prospectus cover showing the prospectus date as it will be printed, a
date that is not always definitively known at the time of the original
filing.
10. SAI, page 11, Disclosure of Fund Holdings. Similar to response #7
above, our examiner indicated that our disclosure was thought to be
lacking in a number of areas, such as (i) who is authorized to make
determinations about releasing fund holdings information; (ii) whether
there were circumstances when the fund would release holdings
information without a confidentiality agreement in place; (iii)
providing greater clarity about restrictions on the use of portfolio
holdings information; (iv) providing greater clarity about who is
responsible for monitoring the funds' portfolio holdings disclosure
policies; (v) providing greater clarity about the Board's role in
monitoring for potential conflicts of interest and how such conflicts
are resolved; and (vi) providing a response to Item 11(f)(2). We have
enhanced and re-ordered the disclosure as previously provided. We
believe that in the revised version, the information provided flows
more logically, which facilitates identification of our disclosure
pertaining to each of your comments. We believe the revised version of
the Disclosure of Fund Holdings disclosure is now fully responsive to
the SEC's comments, as well as to the requirements of Item 11(f) of
Form N-1A.
11. SAI, page 14, Board of Trustees' Consideration of Advisory and
Subadvisory Agreements. We were requested to revise the disclosure on
page 15 regarding the recent contract review meeting to remove the
complex-wide disclosure and provide disclosure tailored specifically to
the funds contained in the registration statement. We were also
requested to break out the discussion of the subadvisory agreement to
its own subsection and to tailor the discussion specifically to the
Board's consideration of the subadvisory agreement. We have revised
this section as requested
and believe the revised version of the Board of Trustees'
Consideration of Advisory and Subadvisory Agreements is now fully
responsive to the SEC's comments, as well as to the requirements of
Item 12(b)(10) of Form N-1A.
Please contact the Ann Spooner at (860) 403-6753 or undersigned at (860)
403-5246 if you have any questions concerning this matter.
Very truly yours,
/s/ Matthew A. Swendiman
Matthew A. Swendiman