N-CSRS 1 g10201seneca_sec.txt PHOENIX-SENECA 2004 SEMI ANNUAL REPORT 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 811-07455 --------------------- Phoenix-Seneca Funds ----------------------------------------------------------------- (Exact name of registrant as specified in charter) 56 Prospect Street Hartford, CT 06115 ----------------------------------------------------------------- (Address of principal executive offices) (Zip code) PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 ----------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 302-791-3197 ------------- Date of fiscal year end: September 30, 2004 ------------------- Date of reporting period: March 31, 2004 --------------- 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, 450 Fifth Street, NW, Washington, DC 20549-0609. 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. Semiannual Report [] MARCH 31, 2004 (LOGO) o SENECA o [GRAPHIC OMITTED] Phoenix-Seneca Bond Fund Phoenix-Seneca Equity Income Fund Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund DO YOU WANT TO STOP RECEIVING FUND DOCUMENTS BY MAIL? GO TO PHOENIXINVESTMENTS.COM, LOG IN AND SIGN UP FOR E-DELIVERY (LOGO) PHOENIX INVESTMENT PARTNERS, LTD. COMMITTED TO INVESTOR SUCCESS(SM) [GRAPHIC OMITTED] MESSAGE FROM THE CHAIRMAN DEAR SHAREHOLDER: Over the last six months, financial services have seen significant change. National news has continued to reflect regulatory attention being paid to a few mutual fund companies' business conduct. In turn, certain industry-wide practices remain under increased scrutiny. Your Fund's Board of Trustees recognizes the seriousness of these issues. As a result, it has expanded its review of policies and procedures to insure compliance with applicable rules and regulations. Additionally, the Board has undertaken a review of its own structure and governance protocols to insure that our practices are not only compliant with regulatory standards, but, whenever practical, also conform to best practices that value your interests and help you invest wisely. I hope that you'll take time to review the activities and performance information included in this Phoenix-Seneca Funds semiannual report. We've witnessed new life in the equity markets, and I am encouraged that our overall economy has begun a more rewarding period. Now is an opportune time for you to review your investments with your financial advisor to be sure your portfolio is best positioned to achieve long-term success. Keep in mind that finding the best balance of performance and protection requires discipline and diversification 1. Your investment in Phoenix-Seneca Bond Fund, Phoenix-Seneca Equity Income Fund, and Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund may help you in this effort. To learn more about your investments and investing, visit PhoenixInvestments.com. Sincerely, /s/ PHILIP R. McLOUGHLIN Philip R. McLoughlin Chairman, Phoenix Funds APRIL 1, 2004 1 DIVERSIFICATION DOES NOT GUARANTEE AGAINST A LOSS, AND THERE IS NO GUARANTEE THAT A DIVERSIFIED PORTFOLIO WILL OUTPERFORM A NON-DIVERSIFIED PORTFOLIO. The preceding information is the opinion of fund management. There is no guarantee that market forecasts discussed will be realized. -------------------------------------------------------------------------------- Mutual funds are not insured by the FDIC; are not deposits or other obligations of a bank and are not guaranteed by a bank; and are subject to investment risks, including possible loss of the principal invested. -------------------------------------------------------------------------------- 1 TABLE OF CONTENTS Phoenix-Seneca Bond Fund .................................................... 3 Phoenix-Seneca Equity Income Fund ........................................... 11 Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund ...................................... 17 Notes to Financial Statements ............................................... 23 This report is not authorized for distribution to prospective investors in Phoenix-Seneca Funds unless preceded or accompanied by an effective Prospectus which includes information concerning the sales charge, the Trust's record and other pertinent information. 2 PHOENIX-SENECA BOND FUND INVESTMENTS AT MARCH 31, 2004 (UNAUDITED) PAR MOODY'S VALUE RATING (000) VALUE ------- ------ ----------- U.S. GOVERNMENT SECURITIES--5.7% U.S. TREASURY BONDS--2.0% U.S. Treasury Bond 6.25%, 5/15/30(c) ......... Aaa $1,311 $ 1,582,777 U.S. TREASURY NOTES--3.7% U.S. Treasury Note 1.625%, 10/31/05 .......... Aaa 115 115,458 U.S. Treasury Note 5%, 2/15/11 ............... Aaa 1,365 1,506,832 U.S. Treasury Inflationary Note 3%, 7/15/12(d) ................................... Aaa 1,000 1,172,241 U.S. Treasury Note 4.25%, 8/15/13 ............ Aaa 70 72,537 ----------- 2,867,068 ----------- ----------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT SECURITIES (IDENTIFIED COST $4,325,328) 4,449,845 ----------------------------------------------------------------------------- AGENCY MORTGAGE-BACKED SECURITIES--14.7% Fannie Mae 7.50%, 2/1/27 ..................... Aaa 543 582,867 Fannie Mae 6%, 9/1/33 ........................ Aaa 949 988,337 Fannie Mae 5.50%, 12/1/33 .................... Aaa 1,604 1,644,257 Fannie Mae 03-113, PE 4%, 11/25/18 ........... Aaa 895 848,929 Fannie Mae 04-21, Ae 4%, 4/25/19 ............. Aaa 1,035 960,246 Fannie Mae 04-5, D 4%, 2/25/19 ............... Aaa 960 916,749 Freddie Mac 5.50%, '16-'22(c) ................ Aaa 4,699 4,831,631 Freddie Mac 4%, 3/15/19 ...................... Aaa 690 637,172 ----------------------------------------------------------------------------- TOTAL AGENCY MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $11,365,289) 11,410,188 ----------------------------------------------------------------------------- ASSET-BACKED SECURITIES--2.5% Residential Asset Mortgage Products, Inc. 04-Sl1, A4 6.50%, 3/25/34 .................... Aaa 1,829 1,902,732 ----------------------------------------------------------------------------- TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $1,903,876) 1,902,732 ----------------------------------------------------------------------------- NON-AGENCY MORTGAGE-BACKED SECURITIES--20.3% Banc of America Commercial Mortgage, Inc. 00-1, A1A 7.109%, 11/15/31 .............. Aaa 552 614,734 Bank of America Alternative Loan Trust 04-1, 2A1 6%, 2/25/34 ........................ Aaa 672 707,817 PAR MOODY'S VALUE RATING (000) VALUE ------- ------ ----------- CDC Commercial Mortgage Trust 02-FX1, A1 5.252%, 5/15/19 ........................... Aaa $ 559 $ 597,026 Countrywide Alternative Loan Trust 02-12, A3 5.40%, 11/25/32 ........................... Aaa 412 417,000 Countrywide Alternative Loan Trust 02-6, A5 6.50%, 7/25/32 ............................ Aaa 133 133,915 Countrywide Alternative Loan Trust 04-5CB, 1A1 6%, 3/25/34 .............................. Aaa 1,180 1,227,937 CS First Boston Mortgage Securities Corp. 03-23, 5A1 6%, 9/25/33 ....................... Aaa 778 807,472 CS First Boston Mortgage Securities Corp. 04-1, 2A1 6.50%, 2/25/34 ..................... Aaa 1,153 1,212,493 Master Asset Securitization Trust Alternative Loans Trust 03-5, 1A1 5.50%, 6/25/33 ...................................... Aaa 1,190 1,214,606 Master Asset Securitization Trust Alternative Loans Trust 03-7, 5A1 6.25%, 11/25/33 ..................................... Aaa 883 922,520 Master Asset Securitization Trust Alternative Loans Trust 03-7, 6A1 6.50%, 12/25/33 ..................................... Aaa 537 560,671 Master Asset Securitization Trust Alternative Loans Trust 04-1, 3A1 7%, 1/25/34 ...................................... Aaa 989 1,068,731 Master Asset Securitization Trust Alternative Loans Trust 04-3, 5A1 6.50%, 3/25/34 ...................................... Aaa 1,180 1,229,044 Master Asset Securitization Trust Alternative Loans Trust 04-3, 6A1 6.50%, 4/25/34 ...................................... Aaa 1,690 1,760,241 New Century Home Equity Loan Trust 03-5, A14 4.76%, 11/25/33 .......................... Aaa 1,085 1,128,937 Structured Asset Securities Corp. 03-33H, 1A1 5.50%, 10/25/33 .......................... Aaa 1,758 1,799,674 Washington Mutual MSC Mortgage Pass-Through Certificates 01-MS14, 1A4 6.25%, 12/25/31 .............................. Aaa 294 298,098 ----------------------------------------------------------------------------- TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $15,534,248) 15,700,916 ----------------------------------------------------------------------------- See Notes to Financial Statements 3 Phoenix-Seneca Bond Fund PAR MOODY'S VALUE RATING (000) VALUE ------- ------ ----------- DOMESTIC CORPORATE BONDS--38.3% AEROSPACE & DEFENSE--1.5% Boeing Capital Corp. 6.10%, 3/1/11 ........... A $ 345 $ 383,203 Goodrich Corp. 7.625%, 12/15/12 .............. Baa 138 164,027 Goodrich Corp. 7%, 4/15/38 ................... Baa 210 227,994 Raytheon Co. 4.85%, 1/15/11 .................. Baa 350 363,948 ----------- 1,139,172 ----------- AUTO PARTS & EQUIPMENT--0.6% Delphi Corp. 6.50%, 8/15/13 .................. Baa 175 186,996 Delphi Trust II 6.197%, 11/15/33 ............. Baa 235 241,286 ----------- 428,282 ----------- AUTOMOBILE MANUFACTURERS--1.8% DaimlerChrysler NA Holding Corp. 4.05%, 6/4/08 ....................................... A 410 414,369 Ford Motor Co. 6.625%, 10/1/28 ............... Baa 365 335,525 General Motors Corp. 8.375%, 7/15/33 ......... Baa 555 629,570 ----------- 1,379,464 ----------- BROADCASTING & CABLE TV--4.8% Clear Channel Communications, Inc. 8%, 11/1/08(c) ............................... Ba 634 744,950 CSC Holdings, Inc. 10.50%, 5/15/16 ........... B 325 377,000 CSC Holdings, Inc. Series B 7.625%, 4/1/11 ....................................... B 365 386,900 Echostar DBS Corp. 9.125%, 1/15/09 ........... Ba 625 709,375 EchoStar DBS Corp. 144A 5.75%, 10/1/08(b) ................................... Ba 360 373,500 Lenfest Communications, Inc. 10.50%, 6/15/06 ...................................... Ba 231 267,094 Liberty Media Corp. 3.50%, 9/25/06 ........... Baa 540 549,885 TCI Communications Financing III 9.65%, 3/31/27 ...................................... Ba 270 328,290 ----------- 3,736,994 ----------- BUILDING PRODUCTS--0.5% American Standard, Inc. 7.625%, 2/15/10 ...... Ba 328 381,300 CASINOS & GAMING--0.5% Caesars Entertainment, Inc. 7.875%, 12/15/05 ..................................... Ba 360 384,300 CONSUMER FINANCE--2.2% American General Finance Corp. 4%, 3/15/11 ...................................... A 410 408,287 PAR MOODY'S VALUE RATING (000) VALUE ------- ------ ----------- General Electric Capital Corp. Series MTNA 2.85%, 1/30/06 ............................... Aaa $ 345 $ 351,322 General Motors Acceptance Corp. 6.125%, 8/28/07 ...................................... A 311 335,170 Household Finance Corp. 7.875%, 3/1/07 ....... A 87 99,845 John Deere Capital Corp. Series MTND 4.125%, 7/15/05 .............................. A 25 25,809 MBNA America Bank NA 5.375%, 1/15/08 ......... Baa 479 516,916 ----------- 1,737,349 ----------- DIVERSIFIED BANKS--0.3% Wachovia Corp. 4.875%, 2/15/14 ............... A 240 245,167 ELECTRIC UTILITIES--1.5% Consolidated Edison Co. of New York 5.875%, 4/1/33 ............................... A 135 140,351 Pacific Gas & Electric Co. 4.20%, 3/1/11 ..... Baa 130 130,166 Pacific Gas & Electric Co. 6.05%, 3/1/34 ..... Baa 90 91,030 Progress Energy, Inc. 6.75%, 3/1/06 .......... Baa 376 407,524 Southern California Edison Co. 8%, 2/15/07 ...................................... Baa 330 378,871 ----------- 1,147,942 ----------- ENVIRONMENTAL SERVICES--1.0% Waste Management, Inc. 6.50%, 11/15/08 ....... Baa 713 803,323 FOREST PRODUCTS--0.2% Weyerhaeuser Co. 6.875%, 12/15/33 ............ Baa 165 179,299 GAS UTILITIES--0.9% NiSource Finance Corp. 7.625%, 11/15/05 ...... Baa 656 713,704 GENERAL MERCHANDISE STORES--0.6% Target Corp. 7%, 7/15/31 ..................... A 375 442,266 HEALTH CARE DISTRIBUTORS--0.2% Omnicare, Inc. 8.125%, 3/15/11 ............... Ba 160 179,200 HEALTH CARE SERVICES--0.5% Fresenius Medical Capital Trust II 7.875%, 2/1/08 ....................................... Ba 325 355,062 HOMEBUILDING--1.5% D.R. Horton, Inc. 7.50%, 12/1/07 ............. Ba 513 577,125 NVR, Inc. 5%, 6/15/10 ........................ Ba 239 241,390 Toll Corp. 8%, 5/1/09 ........................ Ba 350 366,187 ----------- 1,184,702 ----------- HOTELS, RESORTS & CRUISE LINES--0.7% Hilton Hotels Corp. 7.625%, 12/1/12 .......... Ba 294 339,202 Royal Caribbean Cruises Ltd. 8%, 5/15/10 ..... Ba 30 34,050 See Notes to Financial Statements 4 Phoenix-Seneca Bond Fund PAR MOODY'S VALUE RATING (000) VALUE ------- ------ ----------- Royal Caribbean Cruises Ltd. 8.75%, 2/2/11 ....................................... Ba $ 130 $ 152,750 Royal Caribbean Cruises Ltd. 7.25%, 3/15/18 ...................................... Ba 22 23,100 ----------- 549,102 ----------- HOUSEWARES & SPECIALTIES--0.5% American Greetings Corp. Class A 6.10%, 8/1/28 ....................................... Ba 389 422,065 INTEGRATED OIL & GAS--0.8% ConocoPhillips 3.625%, 10/15/07(c) ........... A 630 649,488 INTEGRATED TELECOMMUNICATION SERVICES--2.1% Sprint Capital Corp. 8.75%, 3/15/32(c) ....... Baa 825 1,042,717 Verizon Global Funding Corp. 7.75%, 12/1/30 ...................................... A 465 564,874 ----------- 1,607,591 ----------- INVESTMENT BANKING & BROKERAGE--2.3% Bear Stearns Cos., Inc. (The) 2.875%, 7/2/08 ....................................... A 330 326,033 Goldman Sachs Group, Inc. 5.25%, 10/15/13 ..................................... Aa 155 160,451 Goldman Sachs Group, Inc. 6.125%, 2/15/33 ...................................... Aa 440 453,683 Lehman Brothers Holdings, Inc. 4%, 1/22/08 ...................................... A 142 147,383 Morgan Stanley 6.75%, 4/15/11 ................ Aa 335 386,962 Morgan Stanley 4.75%, 4/1/14 ................. A 285 280,326 ----------- 1,754,838 ----------- LIFE & HEALTH INSURANCE--1.5% Protective Life Secured Trust 4%, 4/1/11 ..... Aa 1,130 1,128,780 METAL & GLASS CONTAINERS--1.1% Ball Corp. 6.875%, 12/15/12 .................. Ba 306 332,393 Owens-Brockway Glass Container, Inc. 8.875%, 2/15/09 .............................. B 298 323,330 Owens-Illinois, Inc. 7.15%, 5/15/05 .......... Caa 150 156,000 ----------- 811,723 ----------- MOVIES & ENTERTAINMENT--0.7% Historic TW, Inc. 9.125%, 1/15/13 ............ Baa 424 545,972 MULTI-LINE INSURANCE--0.6% Loews Corp. 5.25%, 3/15/16 ................... Baa 450 444,483 PAR MOODY'S VALUE RATING (000) VALUE ------- ------ ----------- OIL & GAS EXPLORATION & PRODUCTION--0.7% Pemex Project Funding Master Trust 8.625%, 2/1/22 ............................... Baa $ 295 $ 340,725 XTO Energy, Inc. 6.25%, 4/15/13 .............. Baa 160 177,513 ----------- 518,238 ----------- OTHER DIVERSIFIED FINANCIAL SERVICES--0.3% Citigroup, Inc. 7.25%, 10/1/10 ............... Aa 195 232,238 PACKAGED FOODS & MEATS--1.7% ConAgra Foods, Inc. 7.50%, 9/15/05 ........... Baa 325 350,704 Dean Foods Co. 8.15%, 8/1/07 ................. Ba 443 496,160 Kraft Foods, Inc. 5.625%, 11/1/11 ............ A 445 482,547 ----------- 1,329,411 ----------- PROPERTY & CASUALTY INSURANCE--0.4% Fund American Cos., Inc. 5.875%, 5/15/13 ...................................... Baa 290 304,583 REAL ESTATE MANAGEMENT & DEVELOPMENT--0.3% LNR Property Corp. 7.625%, 7/15/13 ........... Ba 235 250,275 REGIONAL BANKS--0.5% Colonial Bank 9.375%, 6/1/11 ................. Ba 338 412,798 REITS--1.4% Archstone-Smith Trust 7.90%, 2/15/16 ......... Baa 191 232,208 Istar Financial, Inc. 6%, 12/15/10 ........... Ba 185 195,175 Istar Financial, Inc. 144A 4.875%, 1/15/09(b) ................................... Ba 535 543,025 Rouse Co. (The) 3.625%, 3/15/09 .............. Baa 115 113,963 ----------- 1,084,371 ----------- RESTAURANTS--1.2% Yum! Brands, Inc. 7.70%, 7/1/12 .............. Ba 748 891,055 THRIFTS & MORTGAGE FINANCE--1.2% Sovereign Bank Class A-1 144A 10.20%, 6/30/05(b) ................................... Baa 873 928,635 TOBACCO--0.8% Altria Group, Inc. 7%, 11/4/13 ............... Baa 440 484,898 DIMON, Inc. Series B 9.625%, 10/15/11 ........ Ba 120 130,200 ----------- 615,098 ----------- TRUCKING--0.9% Avis Group Holdings, Inc. 11%, 5/1/09 ........ Baa 169 178,717 Hertz Corp. 4.70%, 10/2/06(c) ................ Baa 515 527,865 ----------- 706,582 ----------- ----------------------------------------------------------------------------- TOTAL DOMESTIC CORPORATE BONDS (IDENTIFIED COST $27,893,754) 29,624,852 ----------------------------------------------------------------------------- See Notes to Financial Statements 5 Phoenix-Seneca Bond Fund PAR MOODY'S VALUE RATING (000) VALUE ------- ------ ----------- FOREIGN GOVERNMENT SECURITIES--3.1% MEXICO--0.5% United Mexican States 6.375%, 1/16/13 ........ Baa $ 351 $ 380,133 POLAND--0.4% Republic of Poland 5.25%, 1/15/14 ............ A 305 317,963 SWEDEN--2.2% Swedish Export Credit Corp. 0%, 6/5/07(e) .... Aaa 1,690 1,735,630 ----------------------------------------------------------------------------- TOTAL FOREIGN GOVERNMENT SECURITIES (IDENTIFIED COST $2,340,240) 2,433,726 ----------------------------------------------------------------------------- FOREIGN CORPORATE BONDS(f)--6.6% CANADA--3.0% Abitibi-Consolidated, Inc., 8.30%, 8/1/05 .... Ba 345 361,579 Cascades, Inc. 7.25%, 2/15/13 ................ Ba 296 313,020 Corus Entertainment, Inc. 8.75%, 3/1/12 ...... B 82 91,225 Norske Skog Canada Ltd. Series D 8.625%, 6/15/11 .............................. Ba 180 194,400 Rogers Cablesystems Ltd. Series B 10%, 3/15/05 ...................................... Ba 270 290,250 Tembec Industries, Inc. 8.50%, 2/1/11 ........ Ba 395 396,975 TransCanada Pipelines Ltd. 4%, 6/15/13 ....... A 470 454,537 Videotron Ltd. 6.875%, 1/15/14 ............... Ba 205 215,250 ----------- 2,317,236 ----------- FRANCE--0.5% Crown European Holdings SA 9.50%, 3/1/11 ....................................... B 365 411,538 GERMANY--0.7% Deutsche Telekom International Finance BV 8.25%, 6/15/05 ............................... Baa 495 532,909 NETHERLANDS--0.3% ABN AMRO Bank NV 4.65%, 6/4/18 ............... A 240 231,407 PAR MOODY'S VALUE RATING (000) VALUE ------- ------ ----------- UNITED KINGDOM--1.5% BP Capital Markets plc 2.625%, 3/15/07 ....... Aa $ 360 $ 364,266 British Sky Broadcasting Group plc 8.20%, 7/15/09 ............................... Ba 430 519,420 ICI Wilmington 5.625%, 12/1/13 ............... Baa 255 266,273 ----------- 1,149,959 ----------- UNITED STATES--0.6% Tyco International Group SA 144A 6%, 11/15/13(b) .................................. Ba 405 427,825 ----------------------------------------------------------------------------- TOTAL FOREIGN CORPORATE BONDS (IDENTIFIED COST $4,920,934) 5,070,874 ----------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--91.2% (IDENTIFIED COST $68,283,669) 70,593,133 ----------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS--8.4% FEDERAL AGENCY SECURITIES--8.4% Fannie Mae 0.96%, 4/1/04 ..................... 6,500 6,500,000 ----------------------------------------------------------------------------- TOTAL SHORT-TERM OBLIGATIONS (IDENTIFIED COST $6,500,000) 6,500,000 ----------------------------------------------------------------------------- TOTAL INVESTMENTS--99.6% (IDENTIFIED COST $74,783,669) 77,093,133(a) Other assets and liabilities, net--0.4% 345,078 ----------- NET ASSETS--100.0% $77,438,211 =========== (a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $2,440,359 and gross depreciation of $184,587 for federal income tax purposes. At March 31, 2004, the aggregate cost of securities for federal income tax purposes was $74,837,361. (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 March 31, 2004, these securities amounted to a value of $2,272,985 or 2.9% of net assets. (c) All or a portion segregated as collateral for a delayed delivery transaction. (d) Principal amount is adjusted daily pursuant to the change in the Consumer Price Index. (e) Principal amount is adjusted daily pursuant to the change in the Goldman Sachs Non-Energy Excess Return Index. (f) Foreign Corporate Bonds are determined based on the country in which the bond is issued. The country at risk, noted parenthetically, is determined based on criteria described in Note 2J "Foreign security country determination" in the Notes to Financial Statements. See Notes to Financial Statements 6 Phoenix-Seneca Bond Fund STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 2004 (UNAUDITED) ASSETS Investment securities at value (Identified cost $74,783,669) $77,093,133 Cash 52,136 Receivables Investment securities sold 8,171,437 Interest 729,728 Fund shares sold 309,852 Prepaid expenses 724 ----------- Total assets 86,357,010 ----------- LIABILITIES Payables Investment securities purchased 8,774,659 Fund shares repurchased 27,597 Investment advisory fee 29,271 Transfer agent fee 18,396 Distribution and service fees 16,321 Financial agent fee 7,015 Trustees' fee 1,213 Payable to adviser 470 Accrued expenses 43,857 ----------- Total liabilities 8,918,799 ----------- NET ASSETS $77,438,211 =========== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $74,522,859 Distributions in excess of net investment income (22,335) Accumulated net realized gain 628,223 Net unrealized appreciation 2,309,464 ----------- NET ASSETS $77,438,211 =========== CLASS X Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $38,045,071) 3,501,903 Net asset value and offering price per share $10.86 CLASS A Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $26,767,325) 2,485,901 Net asset value per share $10.77 Offering price per share $10.77/(1-4.75%) $11.31 CLASS B Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $8,784,872) 830,218 Net asset value and offering price per share $10.58 CLASS C Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $3,840,943) 362,349 Net asset value and offering price per share $10.60 STATEMENT OF OPERATIONS SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) INVESTMENT INCOME Interest $1,766,165 ---------- Total investment income 1,766,165 ---------- EXPENSES Investment advisory fee 188,747 Service fees, Class A 29,859 Distribution and service fees, Class B 46,765 Distribution and service fees, Class C 21,088 Financial agent fee 41,976 Transfer agent 46,990 Registration 24,498 Professional 16,952 Custodian 11,727 Printing 7,425 Trustees 5,023 Miscellaneous 9,456 ---------- Total expenses 450,506 Less expenses borne by investment adviser (26,375) ---------- Net expenses 424,131 ---------- NET INVESTMENT INCOME 1,342,034 ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on investments 750,822 Net change in unrealized appreciation (depreciation) on investments 680,617 ---------- NET GAIN ON INVESTMENTS 1,431,439 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,773,473 ========== See Notes to Financial Statements 7 Phoenix-Seneca Bond Fund
STATEMENT OF CHANGES IN NET ASSETS Six Months Ended 3/31/04 Year Ended (Unaudited) 9/30/03 ----------- ------------ FROM OPERATIONS Net investment income (loss) $ 1,342,034 $ 2,715,988 Net realized gain (loss) 750,822 2,948,318 Net change in unrealized appreciation (depreciation) 680,617 166,483 ----------- ------------ INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 2,773,473 5,830,789 ----------- ------------ FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class X (956,223) (1,492,195) Net investment income, Class A (565,890) (778,490) Net investment income, Class B (189,201) (318,986) Net investment income, Class C (84,908) (149,071) Net realized short-term gains, Class X (165,251) (217,767) Net realized short-term gains, Class A (101,326) (132,351) Net realized short-term gains, Class B (40,695) (68,404) Net realized short-term gains, Class C (18,411) (31,478) ----------- ------------ DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (2,121,905) (3,188,742) ----------- ------------ FROM SHARE TRANSACTIONS CLASS X Proceeds from sales of shares (542,483 and 931,093 shares, respectively) 5,820,608 9,890,760 Net asset value of shares issued from reinvestment of distributions (92,980 and 149,298 shares, respectively) 998,951 1,572,658 Cost of shares repurchased (470,968 and 2,422,700 shares, respectively) (5,090,232) (25,366,816) ----------- ------------ Total 1,729,327 (13,903,398) ----------- ------------ CLASS A Proceeds from sales of shares (833,514 and 952,708 shares, respectively) 8,887,214 9,955,589 Net asset value of shares issued from reinvestment of distributions (53,760 and 65,813 shares, respectively) 572,741 688,645 Cost of shares repurchased (391,779 and 1,080,334 shares, respectively) (4,171,221) (11,324,986) ----------- ------------ Total 5,288,734 (680,752) ----------- ------------ CLASS B Proceeds from sales of shares (31,251 and 292,241 shares, respectively) 328,073 3,004,971 Net asset value of shares issued from reinvestment of distributions (16,166 and 26,320 shares, respectively) 169,212 270,800 Cost of shares repurchased (190,007 and 341,941 shares, respectively) (1,990,265) (3,536,816) ----------- ------------ Total (1,492,980) (261,045) ----------- ------------ CLASS C Proceeds from sales of shares (12,747 and 195,645 shares, respectively) 133,834 2,009,923 Net asset value of shares issued from reinvestment of distributions (7,754 and 13,767 shares, respectively) 81,295 141,868 Cost of shares repurchased (109,931 and 255,505 shares, respectively) (1,154,935) (2,625,231) ----------- ------------ Total (939,806) (473,440) ----------- ------------ INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 4,585,275 (15,318,635) ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS 5,236,843 (12,676,588) NET ASSETS Beginning of period 72,201,368 84,877,956 ----------- ------------ END OF PERIOD [INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF ($22,335) AND UNDISTRIBUTED NET INVESTMENT INCOME OF $431,853, RESPECTIVELY] $77,438,211 $ 72,201,368 =========== ============
See Notes to Financial Statements 8 Phoenix-Seneca Bond Fund
FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) CLASS X ------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 ----------------------------------------------------------------------- (UNAUDITED) 2003 2002 (10) 2001 2000 1999 Net asset value, beginning of period $10.78 $10.39 $10.44 $10.16 $10.35 $10.68 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(1) 0.21 0.41 0.48 0.70 0.77 0.69 Net realized and unrealized gain (loss) 0.19 0.46 0.12 0.26 (0.18) (0.31) ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.40 0.87 0.60 0.96 0.59 0.38 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.27) (0.42) (0.49) (0.68) (0.71) (0.62) Distributions from net realized gains (0.05) (0.06) (0.16) -- (0.07) (0.09) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.32) (0.48) (0.65) (0.68) (0.78) (0.71) ------ ------ ------ ------ ------ ------ Change in net asset value 0.08 0.39 (0.05) 0.28 (0.19) (0.33) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $10.86 $10.78 $10.39 $10.44 $10.16 $10.35 ====== ====== ====== ====== ====== ====== Total return 3.74%(4) 8.57% 5.94% 9.84% 6.17% 3.51% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $38,045 $35,966 $48,606 $48,448 $39,981 $34,853 RATIO TO AVERAGE NET ASSETS OF: Operating expenses 0.83%(3) 0.86%(7) 0.82%(8) 0.84%(8) 0.90%(5)(8) 1.06%(5)(7) Net investment income 3.85%(3) 3.93% 4.75% 6.79% 7.67% 6.60% Portfolio turnover 81%(4) 244% 410% 170% 74% 95% CLASS A ------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 ----------------------------------------------------------------------- (UNAUDITED) 2003 2002 (10) 2001 2000 1999 Net asset value, beginning of period $10.68 $10.29 $10.37 $10.11 $10.29 $10.68 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(1) 0.19 0.38 0.44 0.67 0.75 0.59 Net realized and unrealized gain (loss) 0.20 0.45 0.11 0.26 (0.18) (0.33) ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.39 0.83 0.55 0.93 0.57 0.26 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.25) (0.38) (0.47) (0.67) (0.68) (0.56) Distributions from net realized gains (0.05) (0.06) (0.16) -- (0.07) (0.09) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.30) (0.44) (0.63) (0.67) (0.75) (0.65) ------ ------ ------ ------ ------ ------ Change in net asset value 0.09 0.39 (0.08) 0.26 (0.18) (0.39) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $10.77 $10.68 $10.29 $10.37 $10.11 $10.29 ====== ====== ====== ====== ====== ====== Total return(2) 3.69%(4) 8.28% 5.50% 9.54% 5.84% 2.46% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $26,767 $21,263 $21,127 $15,376 $7,335 $2,732 RATIO TO AVERAGE NET ASSETS OF: Operating expenses(6) 1.15%(3) 1.15%(7) 1.15%(7) 1.15%(9) 1.15%(9) 1.88%(7) Net investment income 3.52%(3) 3.65% 4.38% 6.42% 7.60% 5.80% Portfolio turnover 81%(4) 244% 410% 170% 74% 95% (1) Computed using average shares outstanding. (2) Maximum sales charge is not reflected in the total return calculation. (3) Annualized. (4) Not annualized. (5) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 1.13% and 3.41% for the periods ended September 30, 2000 and 1999, respectively. (6) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 1.17%, 1.21%, 1.22%, 1.27%, 1.81% and 4.08% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001, 2000 and 1999, respectively. (7) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would not significantly differ. (8) For the periods ended September 30, 2002, 2001 and 2000, the ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would have been 0.83%, 0.85% and 0.91%, respectively. (9) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would have been 1.16%. (10) As required, effective October 1, 2001, the Fund has adopted the provisions of AICPA Audit and Accounting Guide for Investment Companies and began including paydown gains and losses in interest income. The effect of this change for the year ended September 30, 2002, was to decrease the ratio of net investment income to average net assets from 4.80% to 4.75% and from 4.44% to 4.38% for Class X and Class A, respectively; to decrease net investment income (loss) per share from 0.49 to 0.48 per share and from 0.45 to 0.44 per share for Class X and Class A, respectively; and, to increase net realized and unrealized gain (loss) from 0.11 to 0.12 per share and from 0.10 to 0.11 per share for Class X and Class A, respectively. Per share ratios and supplemental data for prior periods have not been restated to reflect this change.
See Notes to Financial Statements 9 Phoenix-Seneca Bond Fund
FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) CLASS B ------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 ----------------------------------------------------------------------- (UNAUDITED) 2003 2002(9) 2001 2000 1999 Net asset value, beginning of period $10.50 $10.13 $10.25 $10.04 $10.27 $10.67 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(1) 0.15 0.30 0.36 0.57 0.68 0.52 Net realized and unrealized gain (loss) 0.19 0.44 0.11 0.28 (0.20) (0.33) ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.34 0.74 0.47 0.85 0.48 0.19 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.21) (0.31) (0.43) (0.64) (0.64) (0.50) Distributions from net realized gains (0.05) (0.06) (0.16) -- (0.07) (0.09) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.26) (0.37) (0.59) (0.64) (0.71) (0.59) ------ ------ ------ ------ ------ ------ Change in net asset value 0.08 0.37 (0.12) 0.21 (0.23) (0.40) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $10.58 $10.50 $10.13 $10.25 $10.04 $10.27 ====== ====== ====== ====== ====== ====== Total return(2) 3.27%(4) 7.43% 4.83% 8.67% 5.06% 1.67% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $8,785 $10,218 $10,093 $7,713 $3,086 $1,593 RATIO TO AVERAGE NET ASSETS OF: Operating expenses(5) 1.90%(3) 1.90%(7) 1.90%(7) 1.90%(8) 1.90%(8) 2.62%(7) Net investment income 2.78%(3) 2.91% 3.63% 5.64% 6.83% 5.09% Portfolio turnover 81%(4) 244% 410% 170% 74% 95% CLASS C ------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 ----------------------------------------------------------------------- (UNAUDITED) 2003 2002(9) 2001 2000 1999 Net asset value, beginning of period $10.52 $10.15 $10.26 $10.06 $10.27 $10.67 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(1) 0.15 0.30 0.36 0.58 0.69 0.49 Net realized and unrealized gain (loss) 0.19 0.44 0.12 0.26 (0.20) (0.30) ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.34 0.74 0.48 0.84 0.49 0.19 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.21) (0.31) (0.43) (0.64) (0.63) (0.50) Distributions from net realized gains (0.05) (0.06) (0.16) -- (0.07) (0.09) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.26) (0.37) (0.59) (0.64) (0.70) (0.59) ------ ------ ------ ------ ------ ------ Change in net asset value 0.08 0.37 (0.11) 0.20 (0.21) (0.40) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $10.60 $10.52 $10.15 $10.26 $10.06 $10.27 ====== ====== ====== ====== ====== ====== Total return(2) 3.27%(4) 7.42% 4.83% 8.65% 5.12% 1.66% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $3,841 $4,754 $5,052 $3,842 $1,957 $444 RATIO TO AVERAGE NET ASSETS OF: Operating expenses(6) 1.90%(3) 1.90%(7) 1.90%(7) 1.90%(8) 1.90%(8) 2.91%(7) Net investment income 2.79%(3) 2.91% 3.63% 5.69% 6.88% 4.71% Portfolio turnover 81%(4) 244% 410% 170% 74% 95% (1) Computed using average shares outstanding. (2) Maximum sales charge is not reflected in the total return calculation. (3) Annualized. (4) Not annualized. (5) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 2.14%, 2.10%, 2.16%, 2.35%, 3.08% and 5.67% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001, 2000 and 1999, respectively. (6) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 2.53%, 2.41%, 2.50%, 2.78%, 4.08% and 9.50% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001, 2000 and 1999, respectively. (7) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would not significantly differ. (8) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would have been 1.91%. (9) As required, effective October 1, 2001, the Fund has adopted the provisions of AICPA Audit and Accounting Guide for Investment Companies and began including paydown gains and losses in interest income. The effect of this change for the year ended September 30, 2002, was to decrease the ratio of net investment income to average net assets from 3.69% to 3.63% for Class B and Class C; to decrease net investment income (loss) per share from 0.37 to 0.36 per share for Class B and Class C; and, to increase net realized and unrealized gain (loss) from 0.10 to 0.11 per share and from 0.11 to 0.12 per share for Class B and Class C, respectively. Per share ratios and supplemental data for prior periods have not been restated to reflect this change.
See Notes to Financial Statements 10 PHOENIX-SENECA EQUITY INCOME FUND INVESTMENTS AT MARCH 31, 2004 (UNAUDITED) SHARES VALUE ------ ----------- DOMESTIC COMMON STOCKS--95.3% REAL ESTATE INVESTMENT TRUSTS--66.5% DIVERSIFIED--4.7% Cresent Real Estate Equities Co. ..................... 10,660 $ 191,560 iStar Financial, Inc. ................................ 6,660 281,718 Vornado Realty Trust ................................. 15,520 938,650 ----------------------------------------------------------------------------- TOTAL DIVERSIFIED 1,411,928 ----------------------------------------------------------------------------- INDUSTRIAL/OFFICE--19.3% INDUSTRIAL--3.9% AMB Property Corp. ................................... 11,820 439,349 ProLogis ............................................. 20,570 737,846 ----------- 1,177,195 ----------- MIXED--4.2% Duke Realty Corp. .................................... 14,450 501,704 Liberty Property Trust ............................... 16,490 742,050 ----------- 1,243,754 ----------- OFFICE--11.2% Boston Properties, Inc. .............................. 15,510 842,348 Equity Office Properties Trust ....................... 46,255 1,336,307 Glenborough Realty Trust, Inc. ....................... 13,000 290,550 Trizec Properties, Inc. .............................. 50,900 872,935 ----------- 3,342,140 ----------- ----------------------------------------------------------------------------- TOTAL INDUSTRIAL/OFFICE 5,763,089 ----------------------------------------------------------------------------- LODGING/RESORTS--2.7% Host Marriott Corp.(b) ............................... 38,560 492,797 LaSalle Hotel Properties ............................. 13,000 306,800 ----------------------------------------------------------------------------- TOTAL LODGING/RESORTS 799,597 ----------------------------------------------------------------------------- MORTGAGE--5.0% COMMERCIAL FINANCING--4.0% Arbor Realty Trust, Inc. Units 144A(c)(f) ............ 9,600 729,600 Capital Lease Funding, Inc.(b) ....................... 11,010 141,148 Newcastle Investment Corp. ........................... 9,890 333,293 ----------- 1,204,041 ----------- HOME FINANCING--1.0% Redwood Trust, Inc. .................................. 4,810 299,038 ----------------------------------------------------------------------------- TOTAL MORTGAGE 1,503,079 ----------------------------------------------------------------------------- SHARES VALUE ------ ----------- RESIDENTIAL--14.2% APARTMENTS--11.7% Archstone-Smith Trust ................................ 27,546 $ 812,882 Avalonbay Communities, Inc. .......................... 13,190 706,720 BRE Properties, Inc. Class A ......................... 20,900 717,288 Equity Residential Properties Trust .................. 42,360 1,264,446 ----------- 3,501,336 ----------- MANUFACTURED HOMES--2.5% Manufactured Home Communities, Inc. .................. 20,700 730,710 ----------------------------------------------------------------------------- TOTAL RESIDENTIAL 4,232,046 ----------------------------------------------------------------------------- RETAIL--20.0% REGIONAL MALLS--12.2% General Growth Properties, Inc. ...................... 27,310 959,946 Macerich Co. (The) ................................... 8,100 436,590 Rouse Co. (The) ...................................... 9,850 527,960 Simon Property Group, Inc. ........................... 29,115 1,701,481 ----------- 3,625,977 ----------- SHOPPING CENTERS--7.8% Developers Diversified Realty Corp. .................. 18,420 744,168 Kimco Realty Corp. ................................... 17,470 890,621 Weingarten Realty Investors .......................... 20,295 702,207 ----------- 2,336,996 ----------- ----------------------------------------------------------------------------- TOTAL RETAIL 5,962,973 ----------------------------------------------------------------------------- SPECIALTY--0.6% American Financial Realty Trust ...................... 11,200 189,840 ----------------------------------------------------------------------------- TOTAL REAL ESTATE INVESTMENT TRUSTS (IDENTIFIED COST $16,760,811) 19,862,552 ----------------------------------------------------------------------------- REAL ESTATE OPERATING COMPANIES--1.4% DIVERSIFIED--1.4% Northstar Capital Investment Corp. 144A(b)(c)(d)(e)(g) 35,000 420,000 ----------------------------------------------------------------------------- TOTAL REAL ESTATE OPERATING COMPANIES (IDENTIFIED COST $720,625) 420,000 ----------------------------------------------------------------------------- DIVERSIFIED BANKS--4.6% U.S. Bancorp ......................................... 24,840 686,826 Wells Fargo & Co. .................................... 11,920 675,506 ----------- (Identified cost $1,365,423) 1,362,332 ----------- See Notes to Financial Statements 11 Phoenix-Seneca Equity Income Fund SHARES VALUE ------ ----------- HOTELS, RESORTS & CRUISE LINES--2.9% Starwood Hotels & Resorts Worldwide, Inc. ............ 21,450 $ 868,725 (Identified cost $832,365) REGIONAL BANKS--9.4% Charter One Financial, Inc. .......................... 15,000 530,400 FirstMerit Corp. ..................................... 24,800 646,040 National Commerce Financial Corp. .................... 18,910 541,015 PNC Financial Services Group, Inc. ................... 9,470 524,827 Texas Capital Bancshares, Inc.(b) .................... 34,300 556,346 ----------- (Identified Cost $2,825,402) 2,798,628 ----------- THRIFTS & MORTGAGE FINANCE--4.1% New York Community Bancorp, Inc. ..................... 16,650 570,762 Sovereign Bancorp, Inc. .............................. 30,930 662,521 ----------- (Identified cost $1,249,550) 1,233,283 ----------- DIVERSIFIED CAPITAL MARKETS--2.4% J.P. Morgan Chase & Co. .............................. 16,880 708,116 (Identified cost $685,159) INVESTMENT BANKING & BROKERAGE--1.7% E*trade Financial Corp.(b) ........................... 39,330 525,056 (Identified cost $548,331) CASINOS & GAMING--0.5% Mandalay Resort Group ................................ 2,810 160,901 (Identified cost $120,407) ASSET MANAGEMENT & CUSTODY BANKS--1.8% Northern Trust Corp. ................................. 11,300 526,466 (Identified cost $548,841) ----------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS--95.3% (IDENTIFIED COST $25,656,914) 28,466,059 ----------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--95.3% (IDENTIFIED COST $25,656,914) 28,466,059 ----------------------------------------------------------------------------- PAR VALUE (000) VALUE ------ ----------- SHORT-TERM OBLIGATIONS--3.3% REPURCHASE AGREEMENTS--3.3% State Street Bank & Trust Co. repurchase agreement, 0.25%, dated 3/31/04, due 4/1/04, repurchase price $971,007, collateralized by U.S. Treasury Bond 7.50%, 11/15/16, market value $992,948 ...................................... $ 971 $ 971,000 ----------------------------------------------------------------------------- TOTAL SHORT-TERM OBLIGATIONS (IDENTIFIED COST $971,000) 971,000 ----------------------------------------------------------------------------- TOTAL INVESTMENTS--98.6% (IDENTIFIED COST $26,627,914) 29,437,059(a) Other assets and liabilities, net--1.4% 423,393 ----------- NET ASSETS--100.0% $29,860,452 =========== (a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $3,070,263 and gross depreciation of $439,585 for federal income tax purposes. At March 31, 2004, the aggregate cost of securities for federal income tax purposes was $26,806,381. (b) Non-income producing. (c) 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 March 31, 2004, these securities amounted to a value of $1,149,600 or 3.8% of the net assets. (d) Illiquid. At March 31, 2004, these securities amounted to a value of $420,000 or 1.4% of net assets. For acquisition information, see Notes to Financial Statements. (e) Security valued at fair value as determined in good faith by or under the direction of the Trustees. At March 31, 2004, these securities amounted to a value of $420,000 or 1.4% of net assets. (f) Units entitle holder to shares of stock and warrants. (g) Private placement. Security valued at fair value as determined in good faith by or under the direction of the Trustees. See Notes to Financial Statements 12 Phoenix-Seneca Equity Income Fund STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 2004 (UNAUDITED) ASSETS Investment securities at value, (Identified cost $26,627,914) $29,437,059 Cash 405 Receivables Fund shares sold 428,456 Dividends and interest 107,359 Receivable from adviser 315 Prepaid expenses 211 ----------- Total assets 29,973,805 ----------- LIABILITIES Payables Fund shares repurchased 31,816 Professional fee 20,289 Investment advisory fee 19,930 Transfer agent fee 15,806 Registration fee 8,429 Printing fee 5,830 Financial agent fee 4,558 Distribution and service fees 3,903 Trustees' fee 1,240 Accrued expenses 1,552 ----------- Total liabilities 113,353 ----------- NET ASSETS $29,860,452 =========== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $23,508,711 Undistributed net investment income 190,222 Accumulated net realized gain 3,352,374 Net unrealized appreciation 2,809,145 ----------- NET ASSETS $29,860,452 =========== CLASS X Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $21,687,679) 1,276,252 Net asset value and offering price per share $16.99 CLASS A Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $4,487,477) 270,977 Net asset value per share $16.56 Offering price per share $16.56/(1-5.75%) $17.57 CLASS B Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $1,488,252) 90,286 Net asset value and offering price per share $16.48 CLASS C Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $2,197,044) 133,195 Net asset value and offering price per share $16.49 STATEMENT OF OPERATIONS SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) INVESTMENT INCOME Dividends $ 932,167 Interest 2,221 ---------- Total investment income 934,388 ---------- EXPENSES Investment advisory fee 111,283 Service fees, Class A 4,185 Distribution and service fees, Class B 7,001 Distribution and service fees, Class C 10,116 Financial agent fee 26,835 Transfer agent 43,601 Registration 23,769 Professional 16,045 Printing 5,618 Trustees 5,049 Custodian 4,728 Miscellaneous 5,473 ---------- Total expenses 263,703 Less expenses borne by investment adviser (8,637) Custodian fees paid indirectly (10) ---------- Net expenses 255,056 ---------- NET INVESTMENT INCOME 679,332 ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on investments 4,120,325 Net realized loss on written options (52,488) Net change in unrealized appreciation (depreciation) on investments (185,489) ---------- NET GAIN ON INVESTMENTS 3,882,348 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,561,680 ========== See Notes to Financial Statements 13 Phoenix-Seneca Equity Income Fund
STATEMENT OF CHANGES IN NET ASSETS Six Months Ended 3/31/04 Year Ended (Unaudited) 9/30/03 ----------- ----------- FROM OPERATIONS Net investment income (loss) $ 679,332 $ 377,894 Net realized gain (loss) 4,067,837 1,746,673 Net change in unrealized appreciation (depreciation) (185,489) 3,864,630 ----------- ----------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,561,680 5,989,197 ----------- ----------- FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class X (403,246) (343,679) Net investment income, Class A (50,082) (22,710) Net investment income, Class B (14,544) (5,058) Net investment income, Class C (21,238) (6,447) Net realized short-term gains, Class X (197,713) (370,029) Net realized short-term gains, Class A (35,967) (49,537) Net realized short-term gains, Class B (15,420) (12,720) Net realized short-term gains, Class C (22,362) (19,415) Net realized long-term gains, Class X (674,051) -- Net realized long-term gains, Class A (122,621) -- Net realized long-term gains, Class B (52,569) -- Net realized long-term gains, Class C (76,238) -- ----------- ----------- DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (1,686,051) (829,595) ----------- ----------- FROM SHARE TRANSACTIONS CLASS X Proceeds from sales of shares (121,745 and 35,379 shares, respectively) 1,975,850 465,027 Net asset value of shares issued from reinvestment of distributions (79,248 and 51,915 shares, respectively) 1,249,501 691,255 Cost of shares repurchased (88,200 and 380,751 shares, respectively) (1,443,212) (5,045,694) ----------- ----------- Total 1,782,139 (3,889,412) ----------- ----------- CLASS A Proceeds from sales of shares (97,500 and 216,922 shares, respectively) 1,572,470 2,701,734 Net asset value of shares issued from reinvestment of distributions (13,003 and 4,966 shares, respectively) 199,378 64,703 Cost of shares repurchased (39,656 and 235,156 shares, respectively) (628,120) (2,852,530) ----------- ----------- Total 1,143,728 (86,093) ----------- ----------- CLASS B Proceeds from sales of shares (21,854 and 75,743 shares, respectively) 335,157 1,076,762 Net asset value of shares issued from reinvestment of distributions (5,077 and 1,275 shares, respectively) 77,357 16,460 Cost of shares repurchased (11,952 and 85,797 shares, respectively) (189,564) (1,178,515) ----------- ----------- Total 222,950 (85,293) ----------- ----------- CLASS C Proceeds from sales of shares (26,744 and 50,351 shares, respectively) 422,534 665,381 Net asset value of shares issued from reinvestment of distributions (7,199 and 1,544 shares, respectively) 109,730 20,202 Cost of shares repurchased (20,499 and 32,144 shares, respectively) (323,693) (418,176) ----------- ----------- Total 208,571 267,407 ----------- ----------- INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 3,357,388 (3,793,391) ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS 6,233,017 1,366,211 NET ASSETS Beginning of period 23,627,435 22,261,224 ----------- ----------- END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $190,222 AND $0, RESPECTIVELY] $29,860,452 $23,627,435 =========== ===========
See Notes to Financial Statements 14 Phoenix-Seneca Equity Income Fund
FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) CLASS X --------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 ----------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 Net asset value, beginning of period $15.26 $12.07 $12.62 $11.89 $ 9.69 $11.11 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(1) 0.46 0.27 0.49 0.42 0.34 0.47 Net realized and unrealized gain (loss) 2.38 3.46 (0.51) 0.69 2.35 (1.20) ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 2.84 3.73 (0.02) 1.11 2.69 (0.73) ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.34) (0.26) (0.53) (0.38) (0.49) (0.44) Distributions from net realized gains (0.77) (0.28) -- -- -- (0.25) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (1.11) (0.54) (0.53) (0.38) (0.49) (0.69) ------ ------ ------ ------ ------ ------ Change in net asset value 1.73 3.19 (0.55) 0.73 2.20 (1.42) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $16.99 $15.26 $12.07 $12.62 $11.89 $ 9.69 ====== ====== ====== ====== ====== ====== Total return 19.27%(8) 31.60% (0.42)% 9.52% 29.00% (6.66)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $21,688 $17,754 $17,584 $17,349 $16,713 $17,346 RATIO TO AVERAGE NET ASSETS OF: Operating expenses 1.50%(5)(7) 1.61%(6) 1.55 %(5) 1.59%(4) 1.79% 1.66 % Net investment income 5.63%(7) 2.06% 3.73 % 3.49% 3.35% 4.50 % Portfolio turnover 100%(8) 91% 111 % 40% 65% 5 % CLASS A --------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 ----------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 Net asset value, beginning of period $14.88 $11.78 $12.32 $11.67 $ 9.54 $11.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(1) 0.36 0.11 0.32 0.25 0.21 0.32 Net realized and unrealized gain (loss) 2.32 3.36 (0.51) 0.67 2.30 (1.19) ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 2.68 3.47 (0.19) 0.92 2.51 (0.87) ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.23) (0.12) (0.35) (0.27) (0.38) (0.34) Distributions from net realized gains (0.77) (0.25) -- -- -- (0.25) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (1.00) (0.37) (0.35) (0.27) (0.38) (0.59) ------ ------ ------ ------ ------ ------ Change in net asset value 1.68 3.10 (0.54) 0.65 2.13 (1.46) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $16.56 $14.88 $11.78 $12.32 $11.67 $ 9.54 ====== ====== ====== ====== ====== ====== Total return(2) 18.65%(8) 29.90% (1.73)% 7.96% 27.40% (7.97)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $4,487 $2,979 $2,515 $2,410 $1,437 $919 RATIO TO AVERAGE NET ASSETS OF: Operating expenses 2.64%(5)(7) 2.92%(5) 2.83 %(5) 3.05%(3)(5) 3.05%(3) 3.05 %(3) Net investment income 4.52%(7) 0.89% 2.50 % 2.11% 2.11% 3.13 % Portfolio turnover 100%(8) 91% 111 % 40% 65% 5 % (1) Computed using average shares outstanding. (2) Maximum sales charge is not reflected in the total return calculation. (3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 3.18%, 4.28% and 4.27% for the periods ended September 30, 2001, 2000 and 1999, respectively. (4) For the year ended September 30, 2001, the ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would have been 1.60%. (5) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratios would not significantly differ. (6) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fee; if expense offsets were excluded, the ratio would have been 1.62%. (7) Annualized. (8) Not annualized.
See Notes to Financial Statements 15 Phoenix-Seneca Equity Income Fund
FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) CLASS B --------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 ----------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 Net asset value, beginning of period $14.84 $11.74 $12.28 $11.66 $ 9.55 $11.01 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (1) 0.26 (0.01) 0.20 0.17 0.12 0.29 Net realized and unrealized gain (loss) 2.31 3.36 (0.50) 0.65 2.31 (1.22) ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 2.57 3.35 (0.30) 0.82 2.43 (0.93) ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.16) (0.07) (0.24) (0.20) (0.32) (0.28) Distributions from net realized gains (0.77) (0.18) -- -- -- (0.25) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.93) (0.25) (0.24) (0.20) (0.32) (0.53) ------ ------ ------ ------ ------ ------ Change in net asset value 1.64 3.10 (0.54) 0.62 2.11 (1.46) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $16.48 $14.84 $11.74 $12.28 $11.66 $ 9.55 ====== ====== ====== ====== ====== ====== Total return (2) 17.89% (8) 28.82 % (2.63)% 7.21% 26.37% (8.59)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $1,488 $1,117 $987 $554 $287 $197 RATIO TO AVERAGE NET ASSETS OF: Operating expenses (3) 3.80% (6)(7) 3.80 %(6) 3.80 %(6) 3.80%(5) 3.80% 3.80 % Net investment income 3.36% (7) (0.09)% 1.59 % 1.43% 1.19% 2.79 % Portfolio turnover 100% (8) 91 % 111 % 40% 65% 5 % CLASS C --------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 ----------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 Net asset value, beginning of period $14.85 $11.75 $12.28 $11.66 $ 9.55 $11.01 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (1) 0.26 (0.02) 0.21 0.16 0.14 0.29 Net realized and unrealized gain (loss) 2.31 3.37 (0.50) 0.66 2.29 (1.22) ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 2.57 3.35 (0.29) 0.82 2.43 (0.93) ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Dividends from net investment income (0.16) (0.07) (0.24) (0.20) (0.32) (0.28) Distributions from net realized gains (0.77) (0.18) -- -- -- (0.25) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.93) (0.25) (0.24) (0.20) (0.32) (0.53) ------ ------ ------ ------ ------ ------ Change in net asset value 1.64 3.10 (0.53) 0.62 2.11 (1.46) ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $16.49 $14.85 $11.75 $12.28 $11.66 $ 9.55 ====== ====== ====== ====== ====== ====== Total return (2) 17.88% (8) 28.80 % (2.47)% 7.12% 26.37% (8.58)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $2,197 $1,778 $1,175 $525 $329 $200 RATIO TO AVERAGE NET ASSETS OF: Operating expenses (4) 3.80% (6)(7) 3.80 %(6) 3.80 %(6) 3.80%(5) 3.80% 3.80 % Net investment income 3.33% (7) (0.18)% 1.63 % 1.38% 1.36% 2.80 % Portfolio turnover 100% (8) 91 % 111 % 40% 65% 5 % (1) Computed using average shares outstanding. (2) Maximum sales charge is not reflected in the total return calculation. (3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 4.77%, 5.61%, 6.17%, 9.33%, 15.48% and 18.50% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001, 2000 and 1999, respectively. (4) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 3.99%, 4.58%, 6.10%, 9.18%, 13.58% and 19.95% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001, 2000 and 1999, respectively. (5) For the year ended September 30, 2001, the ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would have been 3.81%. (6) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratios would not significantly differ. (7) Annualized. (8) Not annualized.
See Notes to Financial Statements 16 PHOENIX-SENECA MID-CAP "EDGE"(SM) FUND INVESTMENTS AT MARCH 31, 2004 (UNAUDITED) SHARES VALUE ------- ------------ DOMESTIC COMMON STOCKS--94.7% AEROSPACE & DEFENSE--2.8% L-3 Communications Holdings, Inc. .................... 63,720 $ 3,790,066 APPAREL RETAIL--2.1% Chico's FAS, Inc.(b) ................................. 60,500 2,807,200 APPAREL, ACCESSORIES & LUXURY GOODS--1.7% Coach, Inc.(b) ....................................... 56,780 2,327,412 APPLICATION SOFTWARE--5.2% BEA Systems, Inc.(b) ................................. 210,000 2,679,600 Fair Isaac Corp. ..................................... 72,870 2,629,150 Siebel Systems, Inc.(b) .............................. 153,600 1,767,936 ------------ 7,076,686 ------------ ASSET MANAGEMENT & CUSTODY BANKS--2.0% Northern Trust Corp. ................................. 58,580 2,729,242 BIOTECHNOLOGY--5.3% Biogen Idec, Inc.(b) ................................. 67,050 3,727,980 Invitrogen Corp.(b) .................................. 48,630 3,486,285 ------------ 7,214,265 ------------ CASINOS & GAMING--1.7% GTECH Holdings Corp. ................................. 39,040 2,308,826 COMMUNICATIONS EQUIPMENT--3.8% Foundry Networks, Inc.(b) ............................ 151,230 2,596,619 Juniper Networks, Inc.(b) ............................ 99,100 2,577,591 ------------ 5,174,210 ------------ CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--3.0% PACCAR, Inc. ......................................... 73,980 4,160,635 DATA PROCESSING & OUTSOURCED SERVICES--3.6% Affiliated Computer Services, Inc. Class A(b) ........ 52,050 2,701,395 Alliance Data Systems Corp.(b) ....................... 68,080 2,284,084 ------------ 4,985,479 ------------ DIVERSIFIED COMMERCIAL SERVICES--1.9% Block (H&R), Inc. .................................... 49,800 2,541,294 ELECTRICAL COMPONENTS & EQUIPMENT--1.0% Rockwell Automation, Inc. ............................ 38,990 1,351,783 ELECTRONIC MANUFACTURING SERVICES--1.8% Sanmina-SCI Corp.(b) ................................. 226,669 2,495,626 GENERAL MERCHANDISE STORES--1.9% Family Dollar Stores, Inc. ........................... 70,270 2,526,206 SHARES VALUE ------- ------------ HEALTH CARE DISTRIBUTORS--2.5% Patterson Dental Co.(b) .............................. 50,690 $ 3,477,841 HEALTH CARE EQUIPMENT--7.0% Biomet, Inc. ......................................... 69,820 2,678,295 Varian Medical Systems, Inc.(b) ...................... 34,860 3,008,767 Zimmer Holdings, Inc.(b) ............................. 52,300 3,858,694 ------------ 9,545,756 ------------ HEALTH CARE FACILITIES--1.9% Manor Care, Inc. ..................................... 74,370 2,624,517 HEALTH CARE SERVICES--2.8% Caremark Rx, Inc.(b) ................................. 113,800 3,783,850 HOMEBUILDING--1.7% Lennar Corp. ......................................... 42,030 2,270,881 INDUSTRIAL MACHINERY--2.1% Ingersoll-Rand Co. Class A ........................... 42,970 2,906,921 INTERNET SOFTWARE & SERVICES--2.2% VeriSign, Inc.(b) .................................... 179,600 2,979,564 MANAGED HEALTH CARE--2.8% Aetna, Inc. .......................................... 42,870 3,846,296 OFFICE SERVICES & SUPPLIES--1.6% Avery Dennison Corp. ................................. 34,670 2,156,821 OIL & GAS EQUIPMENT & SERVICES--2.9% BJ Services Co.(b) ................................... 91,900 3,976,513 PACKAGED FOODS & MEATS--2.0% Smucker (J.M.) Co. (The) ............................. 51,990 2,744,032 PHARMACEUTICALS--0.9% Watson Pharmaceuticals, Inc.(b) ...................... 30,000 1,283,700 PUBLISHING & PRINTING--4.1% Belo Corp. Class A ................................... 132,570 3,680,143 Gemstar-TV Guide International, Inc.(b) .............. 296,410 1,988,911 ------------ 5,669,054 ------------ REGIONAL BANKS--2.0% North Fork Bancorp, Inc. ............................. 64,270 2,719,906 RESTAURANTS--4.3% Darden Restaurants, Inc. ............................. 130,050 3,223,939 Wendy's International, Inc. .......................... 66,240 2,695,306 ------------ 5,919,245 ------------ See Notes to Financial Statements 17 Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund SHARES VALUE ------- ------------ SEMICONDUCTORS--4.1% Cypress Semiconductor Corp.(b) ....................... 134,340 $ 2,749,940 Fairchild Semiconductor International, Inc.(b) ....... 119,470 2,870,864 ------------ 5,620,804 ------------ SPECIALTY CHEMICALS--2.0% Rohm and Haas Co. .................................... 69,910 2,785,214 SPECIALTY STORES--6.5% Staples, Inc.(b) ..................................... 116,270 2,952,095 Weight Watchers International, Inc.(b) ............... 67,030 2,833,358 Williams-Sonoma, Inc.(b) ............................. 89,750 3,069,450 ------------ 8,854,903 ------------ STEEL--1.3% GrafTech International Ltd.(b) ....................... 117,230 1,752,589 THRIFTS & MORTGAGE FINANCE--2.2% New York Community Bancorp, Inc. ..................... 86,340 2,959,735 ----------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $122,627,426) 129,367,072 ----------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--94.7% (IDENTIFIED COST $122,627,426) 129,367,072 ----------------------------------------------------------------------------- PAR VALUE (000) VALUE ------ ------------ SHORT-TERM OBLIGATIONS--3.3% REPURCHASE AGREEMENTS--3.3% State Street Bank & Trust Co. repurchase agreement, 0.25%, dated 3/31/04 due 4/1/04, repurchase price $4,570,032 collateralized by U.S. Treasury Bond 7.50%, 11/15/16, market value $4,662,828 ..................................... $4,570 $ 4,570,000 ----------------------------------------------------------------------------- TOTAL SHORT-TERM OBLIGATIONS (IDENTIFIED COST $4,570,000) 4,570,000 ----------------------------------------------------------------------------- TOTAL INVESTMENTS--98.0% (IDENTIFIED COST $127,197,426) 133,937,072(a) Other assets and liabilities, net--2.0% 2,711,902 ------------ NET ASSETS--100.0% $136,648,974 ============ (a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $10,692,295 and gross depreciation of $3,952,649 for federal income tax purposes. At March 31, 2004, the aggregate cost of securities for federal income tax purposes was $127,197,426. (b) Non-income producing. See Notes to Financial Statements 18 Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 2004 (UNAUDITED) ASSETS Investment securities at value (Identified cost $127,197,426) $133,937,072 Cash 42 Receivables Investment securities sold 6,709,058 Fund shares sold 130,362 Dividends and interest 28,622 Receivable from adviser 53 Prepaid expenses 1,340 ------------ Total assets 140,806,549 ------------ LIABILITIES Payables Investment securities purchased 3,544,547 Fund shares repurchased 336,599 Investment advisory fee 82,392 Transfer agent fee 67,841 Distribution and service fees 61,094 Financial agent fee 10,452 Trustees' fee 1,240 Accrued expenses 53,410 ------------ Total liabilities 4,157,575 ------------ NET ASSETS $136,648,974 ============ NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $200,477,691 Accumulated net investment loss (850,897) Accumulated net realized loss (69,717,466) Net unrealized appreciation 6,739,646 ------------ NET ASSETS $136,648,974 ============ CLASS X Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $19,957,342) 1,209,932 Net asset value and offering price per share $16.49 CLASS A Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $60,767,867) 3,774,504 Net asset value per share $16.10 Offering price per share $16.10/(1-5.75%) $17.08 CLASS B Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $24,504,766) 1,601,300 Net asset value and offering price per share $15.30 CLASS C Shares of beneficial interest outstanding, $1 par value, unlimited authorization (Net Assets $31,418,999) 2,053,086 Net asset value and offering price per share $15.30 STATEMENT OF OPERATIONS SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) INVESTMENT INCOME Dividends $ 348,770 Interest 8,160 ----------- Total investment income 356,930 ----------- EXPENSES Investment advisory fee 578,528 Service fees, Class A 81,466 Distribution and service fees, Class B 127,882 Distribution and service fees, Class C 166,846 Financial agent fee 64,595 Transfer agent 160,824 Printing 29,149 Registration 28,342 Professional 16,045 Custodian 11,113 Trustees 5,049 Miscellaneous 6,939 ----------- Total expenses 1,276,778 Less expenses borne by investment adviser (68,951) ----------- Net expenses 1,207,827 ----------- NET INVESTMENT LOSS (850,897) ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on investments 13,010,937 Net change in unrealized appreciation (depreciation) on investments 2,244,674 ----------- NET GAIN ON INVESTMENTS 15,255,611 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $14,404,714 =========== See Notes to Financial Statements 19 Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund
STATEMENT OF CHANGES IN NET ASSETS Six Months Ended 3/31/04 Year Ended (Unaudited) 9/30/03 ------------- ------------ FROM OPERATIONS Net investment income (loss) $ (850,897) $ (1,740,406) Net realized gain (loss) 13,010,937 (9,256,160) Net change in unrealized appreciation (depreciation) 2,244,674 33,021,742 ------------ ------------ INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 14,404,714 22,025,176 ------------ ------------ FROM SHARE TRANSACTIONS CLASS X Proceeds from sales of shares (364,309 and 567,444 shares, respectively) 5,932,469 7,557,348 Cost of shares repurchased (364,395 and 254,379 shares, respectively) (5,955,964) (3,346,680) ------------ ------------ Total (23,495) 4,210,668 ------------ ------------ CLASS A Proceeds from sales of shares (431,055 and 1,673,842 shares, respectively) 6,841,131 22,497,136 Cost of shares repurchased (1,013,887 and 2,734,805 shares, respectively) (16,148,082) (36,063,026) ------------ ------------ Total (9,306,951) (13,565,890) ------------ ------------ CLASS B Proceeds from sales of shares (81,662 and 251,861 shares, respectively) 1,230,945 3,179,186 Cost of shares repurchased (222,480 and 426,167 shares, respectively) (3,359,548) (5,331,313) ------------ ------------ Total (2,128,603) (2,152,127) ------------ ------------ CLASS C Proceeds from sales of shares (139,425 and 417,888 shares, respectively) 2,111,646 5,334,001 Cost of shares repurchased (401,099 and 762,053 shares, respectively) (6,067,701) (9,688,751) ------------ ------------ Total (3,956,055) (4,354,750) ------------ ------------ INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (15,415,104) (15,862,099) ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS (1,010,390) 6,163,077 NET ASSETS Beginning of period 137,659,364 131,496,287 ------------ ------------ END OF PERIOD [INCLUDING ACCUMULATED NET INVESTMENT LOSS OF ($850,897) AND $0, RESPECTIVELY] $136,648,974 $137,659,364 ============ ============
See Notes to Financial Statements 20 Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund
FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) CLASS X ------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 -------------------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 Net asset value, beginning of period $14.88 $12.51 $15.70 $31.18 $17.78 $13.81 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.06) (0.11)(1) (0.13)(1) (0.14)(1) (0.19)(1) (0.21)(1) Net realized and unrealized gain (loss) 1.67 2.48 (3.06) (12.91) 15.65 4.72 ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.61 2.37 (3.19) (13.05) 15.46 4.51 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Distributions from net realized gains -- -- -- (2.43) (2.06) (0.54) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS -- -- -- (2.43) (2.06) (0.54) ------ ------ ------ ------ ------ ------ Change in net asset value 1.61 2.37 (3.19) (15.48) 13.40 3.97 ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $16.49 $14.88 $12.51 $15.70 $31.18 $17.78 ====== ====== ====== ====== ====== ====== Total return 10.82 %(7) 18.94 % (20.32)% (44.25)% 91.81 % 33.02 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $19,957 $18,005 $11,219 $14,198 $23,016 $10,640 RATIO TO AVERAGE NET ASSETS OF: Operating expenses 1.15 %(3)(6) 1.15 %(3)(5) 1.15 %(3) 1.15 %(3)(5) 1.27 %(3) 1.96 % Net investment income (loss) (0.65)%(6) (0.77)% (0.75)% (0.61)% (0.72)% (1.27)% Portfolio turnover 109 %(7) 164 % 135 % 96 % 124 % 192 % CLASS A ------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 -------------------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 Net asset value, beginning of period $14.54 $12.25 $15.41 $30.75 $17.60 $13.75 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.06) (0.13)(1) (0.16)(1) (0.19)(1) (0.24)(1) (0.31)(1) Net realized and unrealized gain (loss) 1.62 2.42 (3.00) (12.72) 15.45 4.70 ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.56 2.29 (3.16) (12.91) 15.21 4.39 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Distributions from net realized gains -- -- -- (2.43) (2.06) (0.54) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS -- -- -- (2.43) (2.06) (0.54) ------ ------ ------ ------ ------ ------ Change in net asset value 1.56 2.29 (3.16) (15.34) 13.15 3.85 ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $16.10 $14.54 $12.25 $15.41 $30.75 $17.60 ====== ====== ====== ====== ====== ====== Total return(2) 10.73 %(7) 18.69 % (20.51)% (44.42)% 91.30 % 32.27 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $60,768 $63,365 $66,384 $66,411 $50,150 $6,457 RATIO TO AVERAGE NET ASSETS OF: Operating expenses 1.40 %(4)(6) 1.40 %(4)(5) 1.40 %(4) 1.40 %(4)(5) 1.47 %(4) 2.51 % Net investment income (loss) (0.91)%(6) (1.01)% (0.99)% (0.86)% (0.91)% (1.81)% Portfolio turnover 109 %(7) 164 % 135 % 96 % 124 % 192 % (1) Computed using average shares outstanding. (2) Maximum sales charge is not reflected in the total return calculation. (3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 1.16%, 1.24%, 1.24%, 1.22% and 1.43% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001 and 2000, respectively. (4) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 1.50%, 1.55%, 1.46%, 1.40% and 1.59% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001 and 2000, respectively. (5) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would not significantly differ. (6) Annualized. (7) Not annualized.
See Notes to Financial Statements 21 Phoenix-Seneca Mid-Cap "EDGE"(SM) Fund
FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) CLASS B ------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 -------------------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 Net asset value, beginning of period $13.87 $11.78 $14.93 $30.09 $17.41 $13.73 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.15) (0.23)(1) (0.28)(1) (0.34)(1) (0.45)(1) (0.47)(1) Net realized and unrealized gain (loss) 1.58 2.32 (2.87) (12.39) 15.19 4.69 ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.43 2.09 (3.15) (12.73) 14.74 4.22 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Distributions from net realized gains -- -- -- (2.43) (2.06) (0.54) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS -- -- -- (2.43) (2.06) (0.54) ------ ------ ------ ------ ------ ------ Change in net asset value 1.43 2.09 (3.15) (15.16) 12.68 3.68 ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $15.30 $13.87 $11.78 $14.93 $30.09 $17.41 ====== ====== ====== ====== ====== ====== Total return(2) 10.31 %(7) 17.74 % (21.10)% (44.83)% 89.49 % 31.05 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $24,505 $24,172 $22,577 $23,519 $15,879 $1,676 RATIO TO AVERAGE NET ASSETS OF: Operating expenses(3) 2.15 %(6) 2.15 %(5) 2.15 % 2.15 %(5) 2.29 % 3.45 % Net investment income (loss) (1.66)%(6) (1.76)% (1.74)% (1.61)% (1.73)% (2.78)% Portfolio turnover 109 %(7) 164 % 135 % 96 % 124 % 192 % CLASS C ------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, 3/31/04 -------------------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 Net asset value, beginning of period $13.88 $11.78 $14.93 $30.08 $17.40 $13.72 INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.16) (0.22)(1) (0.28)(1) (0.34)(1) (0.45)(1) (0.47)(1) Net realized and unrealized gain (loss) 1.58 2.32 (2.87) (12.38) 15.19 4.69 ------ ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.42 2.10 (3.15) (12.72) 14.74 4.22 ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS: Distributions from net realized gains -- -- -- (2.43) (2.06) (0.54) ------ ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS -- -- -- (2.43) (2.06) (0.54) ------ ------ ------ ------ ------ ------ Change in net asset value 1.42 2.10 (3.15) (15.15) 12.68 3.68 ------ ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $15.30 $13.88 $11.78 $14.93 $30.08 $17.40 ====== ====== ====== ====== ====== ====== Total return(2) 10.23 %(7) 17.83 % (21.10)% (44.81)% 89.54 % 31.07 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $31,419 $32,118 $31,317 $30,874 $18,218 $975 RATIO TO AVERAGE NET ASSETS OF: Operating expenses(4) 2.15 %(6) 2.15 %(5) 2.15 % 2.15 %(5) 2.25 % 3.45 % Net investment income (loss) (1.66)%(6) (1.76)% (1.74)% (1.61)% (1.68)% (2.78)% Portfolio turnover 109 %(7) 164 % 135 % 96 % 124 % 192 % (1) Computed using average shares outstanding. (2) Maximum sales charge is not reflected in the total return calculation. (3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 2.37%, 2.46%, 2.43%, 2.34%, 2.70% and 6.33% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001, 2000 and 1999, respectively. (4) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets would have been 2.20%, 2.26%, 2.21%, 2.20%, 2.65% and 9.03% for the periods ended March 31, 2004, September 30, 2003, 2002, 2001, 2000 and 1999, respectively. (5) The ratio of operating expenses to average net assets includes the effect of expense offsets for custodian fees; if expense offsets were excluded, the ratio would not significantly differ. (6) Annualized. (7) Not annualized.
See Notes to Financial Statements 22 PHOENIX-SENECA FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004 (UNAUDITED) 1. ORGANIZATION Phoenix-Seneca Funds (the "Trust") is organized as a Delaware business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Currently, three Funds are offered for sale (each a "Fund"). The Bond Fund is diversified and has an investment objective of high total return from both current income and capital appreciation. The Equity Income Fund is non-diversified and has an investment objective of high total return in both current income and long-term capital appreciation. The Mid-Cap "EDGE"(SM) Fund is diversified and has an investment objective of capital appreciation. Each Fund offers Class X, Class A, Class B and Class C shares. Class X shares are sold without a sales charge. Class A shares of Bond Fund are sold with a front-end sales charge of up to 4.75%. Class A shares of Equity Income Fund Fund and Mid-Cap "EDGE"(SM) are sold with a front-end sales charge of up to 5.75%. Class B shares are sold with a contingent deferred sales charge which declines from 5% to zero depending on the period of time the shares are held. Class C shares are sold with a 1% contingent deferred sales charge if redeemed within one year of purchase. Each class of shares has identical voting, dividend, liquidation and other rights and the same terms and conditions, except that each class bears different distribution and/or service expenses and has exclusive voting rights with respect to its distribution plan. Class X bears no distribution and/or service expenses. Income and expenses and realized and unrealized gains and losses of each Fund are borne pro rata by the holders of each class of shares, except for transfer agent and registration expenses which are unique to each class. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities; revenues and expenses. 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. 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 market close (where the security is principally traded) and the time that the fund calculates its net asset value (generally, the close of the NYSE) that may impact the value of securities traded in these foreign markets. In these cases, information from an external vendor may be utilized to adjust closing market prices of certain foreign common stocks to reflect their fair value. Because the frequency of significant events is not predictable, fair valuation of certain foreign common stocks may occur on a frequent basis. Debt securities are valued on the basis of broker quotations or valuations provided by a pricing service which in determining value utilizes information with respect to recent sales, market transactions in comparable securities, quotations from dealers and various relationships between securities. Short-term investments having a remaining maturity of 60 days or less are valued at amortized cost which approximates market. As required, some investments are valued at fair value as determined in good faith by or under the direction of the Trustees. Certain securities held by the Bond 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 March 31, 2004, the total value of these securities represented approximately 4.7% of net assets. B. SECURITY TRANSACTIONS AND RELATED INCOME: Security transactions are recorded on the trade date. Dividend income is recorded on the ex-dividend date or, in the case of certain foreign securities, as soon as the Fund is notified. Interest income is recorded on the accrual basis. Each Fund amortizes premiums and accretes discounts using the effective interest method. Realized gains and losses are determined on the identified cost basis. C. INCOME TAXES: Each Fund is treated as a separate taxable entity. It is the policy of each Fund to comply with the requirements of the Internal Revenue Code (the "Code") applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. In addition, each Fund intends to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code. Therefore, no provision for federal income taxes or excise taxes has been made. The Funds may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Funds will accrue such taxes and recoveries as applicable, based upon their current interpretations of the tax rules and regulations that exist in the markets in which they invest. D. DISTRIBUTIONS TO SHAREHOLDERS: Distributions are recorded by each Fund on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences may include the treatment of non-taxable dividends, market premium and discount, non-deductible expenses, expiring capital loss 23 PHOENIX-SENECA FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004 (UNAUDITED) (CONTINUED) 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. 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 dates 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 Funds do not separate that portion of the results of operations arising from changes in exchange rates and that portion arising from changes in the market prices of securities. F. OPTIONS: Each Fund may write covered options or purchase options contracts for the purpose of hedging against changes in the market value of the underlying securities or foreign currencies. Each Fund will realize a gain or loss upon the expiration or closing of the option transaction. Gains and losses on written options are reported separately in the Statement of Operations. When a written option is exercised, the proceeds on sales or amounts paid are adjusted by the amount of premium received. Options written are reported as a liability in the Statement of Assets and Liabilities and subsequently marked-to-market to reflect the current value of the option. The risk associated with written options is that the change in value of options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, or if a liquid secondary market does not exist for the contracts. Each Fund may purchase options which are included in the Funds' Schedule of Investments and subsequently marked-to-market to reflect the current value of the option. When a purchased option is exercised, the cost of the security is adjusted by the amount of premium paid. The risk associated with purchased options is limited to the premium paid. At March 31, 2004, the Trust had no options outstanding. G. EXPENSES: Expenses incurred by the Trust with respect to more than one Fund are allocated in proportion to the net assets of each Fund, except where allocation of direct expense to each Fund or an alternative allocation method can be more fairly made. Fund expenses that are not related to the distribution of shares of a particular class or to services provided specifically to a particular class are allocated among the classes on the basis of relative average daily net assets of each class. Expenses that relate to the distribution of shares or services provided to a particular class are allocated to that class. H. REPURCHASE AGREEMENTS: A repurchase agreement is a transaction where a Fund acquires a security for cash and obtains a simultaneous commitment from the seller to repurchase the security at an agreed upon price and date. Each Fund, through its custodian, takes possession of securities collateralizing the repurchase agreement. The collateral is marked-to-market daily to ensure that the market value of the underlying assets remains sufficient to protect the Fund in the event of default by the seller. If the seller defaults and the value of the collateral declines, or if the seller enters insolvency proceedings, realization of collateral may be delayed or limited. I. WHEN-ISSUED AND DELAYED TRANSACTIONS: Each Fund may engage in when-issued or delayed delivery transactions. Each Fund records when-issued securities on the trade date and maintains collateral for the securities purchased. Securities purchased on when-issued or delayed delivery basis begin earning interest on the settlement date. J. FOREIGN SECURITY COUNTRY DETERMINATION: A combination of the following criteria is used to assign the countries at risk listed in the schedules of investments: Country of incorporation, actual building address, primary exchange on which security is traded and country in which the greatest percentage of company revenue is generated. 3. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS As compensation for its services to the Trust, the Adviser, Phoenix Investment Counsel, Inc., an indirect, wholly-owned subsidiary of The Phoenix Companies, Inc. ("PNX") is entitled to a fee based upon the following annual rates as a percentage of the average daily net assets of each Fund: Adviser Fee ------- Bond Fund ............................................................ 0.50% Equity Income Fund ................................................... 0.85% Mid-Cap "EDGE"(SM) Fund .............................................. 0.80% The Adviser has voluntarily agreed to reimburse each Fund's operating expenses through January 31, 2005, to the extent that such expenses exceed the following percentages of average annual net assets: Class X Class A Class B Class C ------- ------- ------- ------- Bond Fund ............................. 0.90% 1.15% 1.90% 1.90% Equity Income Fund .................... 2.35% 3.05% 3.80% 3.80% Mid-Cap "EDGE"(SM) Fund ............... 1.15% 1.40% 2.15% 2.15% 24 PHOENIX-SENECA FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004 (UNAUDITED) (CONTINUED) Seneca Capital Management LLC ("Seneca") is the subadviser to each of the Funds. A majority of the equity interests of Seneca are owned by Phoenix Investment Partners, Ltd. ("PXP"), an indirect, wholly-owned subsidiary of PNX. The Adviser pays the subadviser a fee based upon the following annual rates as a percentage of the average daily net assets of each Fund: Bond Fund ............................................................... 0.25% Equity Income Fund ...................................................... 0.425% Mid-Cap "EDGE"(SM) Fund ................................................. 0.40% As Distributor of the Trust's shares, Phoenix Equity Planning Corporation ("PEPCO"), an indirect, wholly-owned subsidiary of PNX has advised the Trust that it retained net selling commissions and deferred sales charges for the period ended March 31, 2004, as follows: Class A Class B Class C Net Selling Deferred Deferred Commissions Sales Charges Sales Charges ----------- ------------- ------------- Bond Fund ........................ $ 696 $24,888 $ 165 Equity Income Fund ............... 512 1,921 200 Mid-Cap "EDGE"(SM) Fund .......... 3,084 38,881 1,798 In addition to these amounts, the following was paid to W.S. Griffith Securities, Inc., an indirect subsidiary of PNX, for Class A net selling commissions: Bond Fund .............................................................. $ 289 Equity Income Fund ..................................................... 124 Mid-Cap "EDGE"(SM) Fund ................................................ 1,834 In addition, each Fund pays PEPCO distribution and/or service fees at an annual rate of 0.25% for Class A shares, 1.00% for Class B shares and 1.00% for Class C shares applied to the average daily net assets of each respective class. PEPCO has advised the Trust of the following information for the period ended March 31, 2004: Distribution Distribution Distribution and/or and/or Service and/or Service Service Fees Fees Paid to Fees Paid to Retained by Unaffiliated W.S. Griffith Distributor Participants Securities, Inc. ------------ -------------- ---------------- Bond Fund .................... $ 48,298 $ 47,743 $1,671 Equity Income Fund ........... 11,260 9,384 658 Mid-Cap "EDGE"(SM) Fund ...... 266,227 107,093 2,874 As Financial Agent of the Trust, PEPCO receives a financial agent fee equal to the sum of (1) the documented cost of fund accounting and related services provided by PFPC Inc. (subagent to PEPCO) plus (2) the documented cost to PEPCO to provide tax services and oversight of the subagent's performance. For the period ended March 31, 2004, the Trust paid $133,406. The fee schedule of PFPC Inc. ranges from 0.065% to 0.03% of the average daily net asset values of all the Phoenix-affiliated funds serviced by PFPC Inc. Certain minimum fees may apply. PEPCO serves as the Trust's Transfer Agent with State Street Bank and Trust Company serving as sub-transfer agent. For the period ended March 31, 2004, transfer agent fees were $251,415 as reported in the Statement of Operations, of which PEPCO retained the following: Transfer Agent Fee Retained -------------- Bond Fund ..................................................... $ -- Equity Income Fund ............................................ -- Mid-Cap "EDGE"(SM) Fund ....................................... 31,418 At March 31, 2004, PNX and its affiliates, the retirement plans of PNX and its affiliates, and Phoenix-affiliated Funds held Phoenix-Seneca Funds shares which aggregated the following: Aggregate Net Asset Shares Value ------- --------- Bond Fund Class X ...................................... 24,258 $ 263,442 Class A ...................................... 896,149 9,651,525 Equity Income Fund Class B ...................................... 9,736 160,449 Class C ...................................... 9,736 160,547 4. PURCHASE AND SALE OF SECURITIES Purchases and sales of securities during the period ended March 31, 2004 (excluding U.S. Government and agency securities, short-term securities and options) were as follows: Purchases Sales ------------ ------------ Bond Fund ...................................... $ 38,091,952 $ 35,097,537 Equity Income Fund ............................. 26,635,709 24,735,194 Mid-Cap "EDGE"(SM) Fund ........................ 148,171,521 158,568,738 Purchases and sales of long-term U.S. Government and agency securities during the period ended March 31, 2004, were as follows: Purchases Sales ----------- ----------- Bond Fund ...................................... $20,960,081 $23,298,424 Written call option activity for the period ended March 31, 2004, was as follows: Equity Income Fund ---------------------- Number of Amount of Options Premiums --------- ---------- Options outstanding at September 30, 2003 $ -- $ -- Options written 500 49,462 Options expired -- -- Options closed (500) (49,462) Options exercised -- -- ----- -------- Options outstanding at March 31, 2004 -- -- ===== ======== 25 PHOENIX-SENECA FUNDS NOTES TO FINANCIAL STATEMENTS MARCH 31, 2004 (UNAUDITED) (CONTINUED) 5. 10% SHAREHOLDERS As of March 31, 2004, certain Funds had single shareholder and omnibus shareholder accounts (which are comprised of a group of individual shareholders), which individually amounted to more than 10% of the total shares outstanding. Neither shareholder is affiliated with PNX. Number of % of Shares Accounts Outstanding ----------------- ----------- Equity Income Fund ........................... 1 Account 50.1% Mid-Cap "EDGE"(SM) Fund ...................... 1 Omnibus Account 14.4% 6. CREDIT RISK AND ASSET CONCENTRATIONS In countries with limited or developing markets, investments may present greater risks than in more developed markets and the prices of such investments may be volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of these investments and the income they generate, as well as a fund's ability to repatriate such amounts. Certain funds may invest a high percentage of their assets in specific sectors of the market in their pursuit of a greater investment return. Fluctuations in these sectors of concentration may have a greater impact on a fund, positive or negative, than if a fund did not concentrate its investments in such sectors. 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 Adviser to accurately predict risk. 7. RESTRICTED SECURITIES At March 31, 2004, the Trust held the following restricted securities: Equity Income Fund Acquisition Date Acquisition Cost ------------------ ---------------- ---------------- NorthStar Capital Investment Corp. Shares 20,000 ......................... 12/17/97 $400,000 Shares 15,000 ......................... 3/24/98 320,625 The Fund will bear any costs, including those involved in registration under the Securities Act of 1933, in connection with the disposition of such securities. 8. FEDERAL INCOME TAX INFORMATION The Fund has capital loss carryovers which may be used to offset future capital gains, as follows: Expiration Year ------------------------------------ Fund 2009 2010 2011 Total ----- -------- ----------- ----------- ----------- Mid-Cap "EDGE"(SM) Fund ..... $709,370 $42,302,856 $39,716,177 $82,728,403 The Fund may not realize the benefit of these losses to the extent it does not realize gains on investments prior to the expiration of the capital loss carryovers. 9. OTHER Effective December 3, 2003, the Equity Income Fund changed its name from Phoenix-Seneca Real Estate Securities Fund to Phoenix-Seneca Equity Income Fund. 10. SUBSEQUENT EVENT On or about June 1, 2004, W.S. Griffith Securities, Inc. will be sold to Linsco/Private Ledger, an independent broker/dealer and will no longer be a subsidiary of PNX. 11. PROXY VOTING PROCEDURES The advisers and subadvisers to each of the Phoenix-affiliated Funds vote proxies relating to portfolio securities in accordance with procedures that have been approved by the Board of Trustees of the Trust. You may obtain a description of these procedures, free of charge, by calling toll-free 800-243-1574. This information is also available through the Securities and Exchange Commission's website at http://www.sec.gov. 26 FUND MANAGEMENT Information pertaining to the Trustees and officers of the Trust is set forth below. The statement of additional information (SAI) includes additional information about the Trustees and is available without charge, upon request, by calling (800) 243-4361. The address of each individual, unless otherwise noted, is 56 Prospect Street, Hartford, CT 06115-0480. There is no stated term of office for Trustees of the Trust.
INDEPENDENT TRUSTEES ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF PORTFOLIOS IN FUND COMPLEX PRINCIPAL OCCUPATION(S) NAME, ADDRESS AND LENGTH OF OVERSEEN BY DURING PAST 5 YEARS AND DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE ------------------------------------------------------------------------------------------------------------------------------------ E. Virgil Conway Served since 35 Chairman, Rittenhouse Advisors, LLC (consulting firm) since 2001. Rittenhouse Advisors, LLC 2000. Trustee/Director, Realty Foundation of New York (1972-present), Pace 101 Park Avenue University (1978-present), New York Housing Partnership Development New York, NY 10178 Corp. (Chairman) (1981-present), Greater New York Councils, Boy Scouts DOB: 8/2/29 of America (1985-present), The Academy of Political Science (Vice Chairman) (1985-present), Urstadt Biddle Property Corp. (1989-present), The Harlem Youth Development Foundation (1998-2002). Chairman, Metropolitan Transportation Authority (1992-2001). Director, Trism, Inc. (1994-2001), Consolidated Edison Company of New York, Inc. (1970-2002), Atlantic Mutual Insurance Company (1974-2002), Centennial Insurance Company (1974-2002), Josiah Macy, Jr., Foundation (1975-present), Union Pacific Corp. (1978-2002), BlackRock Freddie Mac Mortgage Securities Fund (Advisory Director) (1990-2000), Accuhealth (1994-2002). ------------------------------------------------------------------------------------------------------------------------------------ Harry Dalzell-Payne Served since 35 Currently retired. The Flat, Elmore Court 1999. Elmore, GL05, GL2 3NT U.K. DOB: 8/9/29 ------------------------------------------------------------------------------------------------------------------------------------ Geraldine M. McNamara Served since 37 Managing Director, U.S. Trust Company of New York (private bank) U.S. Trust Company of 2001. (1982-present). New York 11 West 54th Street New York, NY 10019 DOB: 4/17/51 ------------------------------------------------------------------------------------------------------------------------------------ Everett L. Morris Served since 35 Currently retired, Vice President, W.H. Reaves and Company (investment 164 Laird Road 2000. management) (1993-2003). Colts Neck, NJ 07722 DOB: 5/26/28 ------------------------------------------------------------------------------------------------------------------------------------
27 FUND MANAGEMENT (CONTINUED)
INTERESTED TRUSTEES Each of the individuals listed below is an "interested person" of the Trust, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended, and the rules and regulations thereunder. ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF NAME, ADDRESS, PORTFOLIOS IN DATE OF BIRTH FUND COMPLEX PRINCIPAL OCCUPATION(S) AND POSITION(S) WITH LENGTH OF OVERSEEN BY DURING PAST 5 YEARS AND TRUST TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE ------------------------------------------------------------------------------------------------------------------------------------ *Philip R. McLoughlin Served since 70 Consultant, Phoenix Investment Partners Ltd. (2002-present). Director, DOB: 10/23/46 2000. PXRE Corporation (Delaware) (1985-present), World Trust Fund (1991-present). Chairman (1997-2002), Director (1995-2002), Vice Chairman Chairman (1995-1997) and Chief Executive Officer (1995-2002), Phoenix Investment Partners, Ltd. Director and Executive Vice President, The Phoenix Companies, Inc. (2000-2002). Director (1994-2002) and Executive Vice President, Investments (1987-2002), Phoenix Life Insurance Company. Director (1983-2002) and Chairman (1995-2002), Phoenix Investment Counsel, Inc. Director (1982-2002) and President (1990-2000), Phoenix Equity Planning Corporation. Chairman and President, Phoenix/Zweig Advisers LLC (2001-2002). Director (2001-2002) and President (April 2002-September 2002), Phoenix Investment Management Company. Director and Executive Vice President, Phoenix Life and Annuity Company (1996-2002). Director (1995-2000) and Executive Vice President (1994-2002), PHL Variable Insurance Company. Director, Phoenix National Trust Holding Company (2001-2002). Director (1985-2002) and Vice President (1986-2002), PM Holdings, Inc. Director, W.S. Griffith Associates, Inc. (1995-2002). Director (1992-2002) and President (1993-1994), W.S. Griffith Securities, Inc. ------------------------------------------------------------------------------------------------------------------------------------ * Mr. McLoughlin is an "interested person," as defined in the Investment Company Act of 1940, by reason of his relationship with Phoenix Investment Partners, Ltd. and its affiliates.
28 FUND MANAGEMENT (CONTINUED)
OFFICERS OF THE TRUST WHO ARE NOT TRUSTEES ------------------------------------------------------------------------------------------------------------------------------------ POSITION(S) HELD WITH NAME, ADDRESS AND TRUST AND LENGTH OF PRINCIPAL OCCUPATION(S) DATE OF BIRTH TIME SERVED DURING PAST 5 YEARS ------------------------------------------------------------------------------------------------------------------------------------ Gail P. Seneca President since 1996. President and Chief Executive and Investment Officer, Seneca Capital 909 Montgomery Street Management LLC (1996-present). Managing Director, Equities, Phoenix San Francisco, CA 94133 Investment Counsel, Inc. (1998-present). Managing General Partner and Chief DOB: 3/7/53 Executive and Investment Officer, GMG/Seneca Capital Management LP (1989-present). President, GenCap, Inc. (1994-present). Trustee, Phoenix-Seneca Funds (1996-2000). ------------------------------------------------------------------------------------------------------------------------------------ William R. Moyer Executive Vice President Senior Vice President (1995-1999), Chief Financial Officer DOB: 8/16/44 since 2000. (1995-present), and Executive Vice President (1999-present), Phoenix Investment Partners, Ltd. Director (1998-present), Executive Vice President, Chief Financial Officer and Treasurer (2000-present), Senior Vice President and Chief Financial Officer (1996-2000), Phoenix Equity Planning Corporation. Director (1998-present), Senior Vice President, Chief Financial Officer and Treasurer (1996-present), Phoenix Investment Counsel, Inc. Director (2000-present), Treasurer (1996- present), Senior Vice President (2000-2002), Executive Vice President (2000-present). Duff & Phelps Investment Management Co. Executive Vice President, Phoenix Fund Complex (1990-present). ------------------------------------------------------------------------------------------------------------------------------------ John F. Sharry Executive Vice President Executive Vice President (1998-present), Phoenix Investment Partners, DOB: 3/28/52 since 2002. Ltd. President, Phoenix Equity Planning Corporation (2000-present). Executive Vice President, Phoenix Fund Complex (1998-present). ------------------------------------------------------------------------------------------------------------------------------------ Nancy G. Curtiss Treasurer since 2000. Vice President, Fund Accounting (1994-2000), Treasurer (1996-2000), DOB: 11/24/52 Assistant Treasurer (2001-present), Phoenix Equity Planning Corporation. Treasurer, Phoenix Fund Complex (1994-present). ------------------------------------------------------------------------------------------------------------------------------------ Richard J. Wirth Secretary since 2002. Vice President and Insurance and Investment Products Counsel One American Row (2002-present), Counsel (1993-2002), Phoenix Life Insurance Company. Hartford, CT 06102 Director (2003-present), President (2003-present), Assistant Secretary DOB: 11/14/58 (2002-present), Phoenix Variable Advisors, Inc. Secretary (2002-present), Chief Legal Officer (2003-present), Phoenix Fund Complex. ------------------------------------------------------------------------------------------------------------------------------------
29 PHOENIX-SENECA FUNDS 909 Montgomery Street San Francisco, California 94133 TRUSTEES E. Virgil Conway Harry Dalzell-Payne Philip R. McLoughlin Geraldine M. McNamara Everett L. Morris OFFICERS Gail P. Seneca, President William R. Moyer, Executive Vice President John F. Sharry, Executive Vice President Nancy G. Curtiss, Treasurer Richard J. Wirth, Chief Legal Officer and Secretary -------------------------------------------------------------------------------- IMPORTANT NOTICE TO SHAREHOLDERS The Securities and Exchange Commission has modified mailing regulations for semiannual and annual shareholder fund reports to allow mutual fund companies to send a single copy of these reports to shareholders who share the same mailing address. If you would like additional copies, please call Mutual Fund Services at 1-800-243-1574. -------------------------------------------------------------------------------- INVESTMENT ADVISER Phoenix Investment Counsel, Inc. 56 Prospect Street Hartford, Connecticut 06115-0480 SUBADVISER Seneca Capital Management LLC 909 Montgomery Street San Francisco, California 94133 PRINCIPAL UNDERWRITER Phoenix Equity Planning Corporation 56 Prospect Street Hartford, Connecticut 06115-0480 CUSTODIAN State Street Bank and Trust Company P.O. Box 5501 Boston, Massachusetts 02206-5501 TRANSFER AGENT Phoenix Equity Planning Corporation 56 Prospect Street Hartford, Connecticut 06115-0480 INDEPENDENT AUDITORS PricewaterhouseCoopers LLP 125 High Street Boston, Massachusetts 02110 HOW TO CONTACT US Mutual Fund Services 1-800-243-1574 Advisor Consulting Group 1-800-243-4361 Text Telephone 1-800-243-1926 Web site PHOENIXINVESTMENTS.COM (This page has been left blank intentionally.) (This page has been left blank intentionally.) --------------- PRESORTED STANDARD U.S. POSTAGE PAID Louisville, KY Permit No. 1051 --------------- PHOENIX EQUITY PLANNING CORPORATION P.O. Box 150480 Hartford, CT 06115-0480 (LOGO) PHOENIX INVESTMENT PARTNERS, LTD. A MEMBER OF THE PHOENIX COMPANIES, INC. [GRAPHIC OMITTED] For more information about Phoenix mutual funds, please call your financial representative or contact us at 1-800-243-4361 or PHOENIXINVESTMENTS.COM. NOT INSURED BY FDIC/NCUA OR ANY FEDERAL GOVERNMENT AGENCY. NO BANK GUARANTEE. NOT A DEPOSIT. MAY LOSE VALUE. PXP 1140A (5/04) ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. 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 directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. ITEM 10. 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 last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not yet effective. (b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Phoenix-Seneca Funds --------------------------------------------------------------------- By (Signature and Title)* /s/ Philip R. McLoughlin ------------------------------------------------------- Philip R. McLoughlin, Chairman (principal executive officer) Date June 4, 2004 ---------------------------------------------------------------------------- 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 R. McLoughlin ------------------------------------------------------- Philip R. McLoughlin, Chairman (principal executive officer) Date June 4, 2004 ---------------------------------------------------------------------------- By (Signature and Title)* /s/ Nancy G. Curtiss ------------------------------------------------------- Nancy G. Curtiss, Treasurer (principal financial officer) Date June 4, 2004 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.