-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MDuqXOvjc8EyFauryq8zQGX5qFqn9k17hxC6uPxMQ/jpeu7BzAJXbpwFcJ9DIevh iOZbIsoJzSQ9NjHwOC3xRA== 0000935069-04-001421.txt : 20040907 0000935069-04-001421.hdr.sgml : 20040906 20040907165339 ACCESSION NUMBER: 0000935069-04-001421 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040907 DATE AS OF CHANGE: 20040907 EFFECTIVENESS DATE: 20040907 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHOENIX EQUITY TRUST CENTRAL INDEX KEY: 0000034273 IRS NUMBER: 036066130 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-00945 FILM NUMBER: 041019046 BUSINESS ADDRESS: STREET 1: 101 MUNSON STEET CITY: GREENFIELD STATE: MA ZIP: 01301 BUSINESS PHONE: 800 243-1574 MAIL ADDRESS: STREET 1: 56 PROSPECT STREET STREET 2: PO BOX 150480 CITY: HARTFORD STATE: CT ZIP: 06115-0480 FORMER COMPANY: FORMER CONFORMED NAME: PHOENIX ABERDEEN WORLDWIDE OPPORTUNITIES FUND DATE OF NAME CHANGE: 19981215 FORMER COMPANY: FORMER CONFORMED NAME: PHOENIX WORLDWIDE OPPORTUNITIES FUND DATE OF NAME CHANGE: 19940505 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL WORLDWIDE OPPORTUNITIES FUND INC DATE OF NAME CHANGE: 19920703 N-CSR 1 g11541phx_equitytrust.txt PHOENIX EQUITY TRUST N-CSR 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 811-00945 ------------ Phoenix Equity Trust --------------------------------------------------- (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: June 30, 2004 ------------- Date of reporting period: June 30, 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. Annual Report [GRAPHIC OMITTED] JUNE 30, 2004 Phoenix-Aberdeen Worldwide Opportunities Fund Do you want to stop receiving fund documents by mail? Go to Phoenixinvestments.com, log in and sign up for E-Delivery [LOGO OMITTED] PHOENIX INVESTMENT PARTNERS, LTD. COMMITTED TO INVESTOR SUCCESS(SM) - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- This report is not authorized for distribution to prospective investors in the Phoenix-Aberdeen Worldwide Opportunities Fund unless preceded or accompanied by an effective prospectus which includes information concerning the sales charge, the Fund's record and other pertinent information. MESSAGE FROM THE CHAIRMAN DEAR SHAREHOLDER: [PHOTO OMITTED] Over the majority of the last 12 months, financial services firms continued to respond to regulatory attention that was 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 recognized the seriousness of these issues. As a result, it took action to expand its review of policies and procedures to insure compliance with applicable rules and regulations. Moving forward, the Board will continue to take steps to comply with new legislative proposals and to assimilate evolving best practices identified by leading industry groups such as the Investment Company Institute 1. I hope that you'll take time to review the activities and performance information included in this Phoenix-Aberdeen Worldwide Opportunities Fund annual report. At this time, we believe that the U.S. economy continues to demonstrate clear signs of growth in response to monetary and fiscal stimulus. Gross domestic product grew at a 4.5% rate in the first quarter of 2004, and corporate profits continue to improve. Recent reports on employment have begun to confirm that economic growth is translating into job growth. However, with the strong economy and growth, we feel that fears of accelerating inflation and uncertainty in world political events have put negative pressure on equity and fixed income markets. All of these indicators point to the fact that now is an opportune time for you to review your investments with your financial advisor to be sure that 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 2. Your investment in Phoenix-Aberdeen Worldwide Opportunities 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 JULY 1, 2004 1 THE INVESTMENT COMPANY INSTITUTE (ICI) IS THE NATIONAL ASSOCIATION OF THE U.S. INVESTMENT COMPANY INDUSTRY. ICI REPRESENTS ITS MEMBERS AND THEIR SHAREHOLDERS ON ISSUES OF LEGISLATION, REGULATION, TAXATION, PUBLIC INFORMATION, ECONOMIC AND POLICY RESEARCH, BUSINESS OPERATIONS, AND STATISTICS. 2 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 the Fund's Board of Trustees. There is no guarantee that market forecasts discussed will be realized. 1 PHOENIX-ABERDEEN WORLDWIDE OPPORTUNITIES FUND A DISCUSSION WITH THE FUND'S INVESTMENT MANAGEMENT TEAM Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE? A: The Phoenix-Aberdeen Worldwide Opportunities Fund has an investment objective of capital appreciation. There is no guarantee that the Fund will achieve its objective. Q: HOW DID THE FUND PERFORM DURING THE PAST 12 MONTHS ENDED JUNE 30, 2004? A: Over the Fund's fiscal year ended June 30, 2004, Class A shares returned 22.65%, Class B shares returned 21.78%, and Class C shares returned 21.66%. For the same period, the Fund's benchmark index, the MSCI World Index(SM) (net of foreign withholding taxes) 1 returned 24.00%. All performance figures assume reinvestment of distributions and exclude the effect of sales charges. Past performance is not indicative of future results and current performance may be higher or lower than the performance shown above. Q: WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE 12-MONTH PERIOD, AND WHAT CHANGES WERE MADE TO THE PORTFOLIO DURING THE FISCAL YEAR? A: During the year under review, global equities performed well with all regions managing to achieve positive returns. For U.S. investors, international returns were boosted by the weakness in the U.S. dollar, which declined 6.0% against the euro, 9.2% against the Japanese yen and 10.0% against the British pound in the 12-month period. Although reasonable gains were made in the U.S., the Fund remains underweight there, as better valuations are presently found overseas as well as the prospect of currency gains. Continental European markets enjoyed a good year and remain slightly overweighted in the Fund. The Fund is also overweight in the Japanese market, which was the best performer of the major markets, while it is underweight in the U.K. due to concerns over the house price inflation and consumer indebtedness. The overweight positions in Asia (excluding Japan) and Latin America have been maintained and these regions contributed to the overall gains made by the Fund. Q: WHAT FACTORS AFFECTED WORLD MARKETS OVER THE 12-MONTH PERIOD ENDED JUNE 30, 2004? A: The year under review began positively as global equity markets gained ground during the first quarter, building on the momentum of the previous quarter. Risk aversion declined, despite some currency-induced turbulence towards the quarter-end. Lingering concerns over the rapid deterioration of the "twin deficits" in the United States kept the dollar on its downward trajectory against most global currencies, enhancing total returns from regional equity markets. In Europe, economic growth was relatively subdued in spite of encouraging economic data. Production, consumption and confidence, factors strongly supportive of the "cyclical" case for Europe, all showed signs of improvement. Asia saw the greatest improvement in sentiment during the first quarter of this period. Asia's stock markets recovered strongly from oversold levels reached during the SARS crisis, with strong corporate earnings functioning as the catalyst for superior relative outperformance. Even in Japan, where deflationary woes continued to impact the economy, improvement in sentiment filtered down into greater business optimism, causing the stock market to rise sharply in anticipation of a more positive outlook. The quarter to December saw a marked improvement in growth and an easing of deflationary trends throughout the world economy. Also notable was the emergence of two centers of growth and demand. For the last three years as the developed economies struggled with recession, China, supported by cheap finance and abundant labor, was the only major economy to maintain a clear growth trend. The 2 Phoenix-Aberdeen Worldwide Opportunities Fund (continued) attractions of the country proved to be irresistible and multi-national corporations lined up to establish manufacturing facilities on Chinese soil. This stimulated economies in the region and further afield, which could supply the natural resources or semi-finished products required. As a result, the Asian economies survived the downturn in a relatively better state than Europe and have rebounded strongly over the past year. News out of the U.S. also indicated that the quarter enjoyed a spike in growth and thus the U.S. emerged as another center of demand to help the global economy return to a sustainable rate of growth. For the third quarter of the period, currency movements heavily influenced financial market returns. Through January and February the focus was on the weakness of the dollar. In March the theme evolved more into a strengthening yen story. Consequently the continuing decline of the dollar, and dollar pegged currencies against a strengthening yen, remained the dominating influences on global money flows and future expectations. Economic news in Asia stayed buoyant over the quarter ended March 2004. Regional growth continued to be driven predominantly by positive economic trends in China and India. The strength in economic activity in the Asia Pacific region also had a positive effect on Japan. Economic data, which had been pointing to strong export growth, also suggested that the domestic economy was showing some signs of life. Inflation rates at the consumer level moved into positive territory, albeit only slightly, consumption levels showed signs of life and retail sales posted improving trends. Japan was the strongest of the major equity markets through the quarter, posting a return of 14.6% in U.S. dollar terms. Most of that move occurred in March, with financial and domestic companies posting some of the strongest gains. Through April and into early May bond and equity markets sold off, and in some cases, such as for emerging bond and equity markets, the sell off was dramatic. As part of the unwinding of speculative trades or the so called carry trade (borrowing at Fed Funds Rate of 1% and investing in higher returning assets), the U.S. dollar strengthened against most currencies through the first half of the quarter, before giving up some of those gains towards the end of the quarter. Volatility in global bond and equity markets was further fueled by concerns about the path of the Chinese economy. The Chinese authorities provided mixed signals on the extent to which the measures that they had been implementing were being successful in slowing the pace of economic growth. The 25 basis point increase in Fed Funds Rate on the last day of June brought to an end an extended period of exceptionally low interest rates in the United States. The last monetary tightening was over four years ago. Improvements in the employment situation and a tightening of capacity led the Federal Reserve to change its assessment of inflation risks. The initial tightening phase is expected to be gradual, giving the Fed the chance to assess the impact on the economy of its initial moves. Sentiment towards Asia deteriorated over the quarter as investors accentuated any negatives that emerged. In addition to the pressure of being perceived as cyclically dependant on U.S. growth, ongoing strength in oil prices and the related inflationary implications, if these persist, caused further concerns. Countries with high oil import dependency, such as South Korea, Thailand, India and Japan, were at times subjected to intense scrutiny, causing markets to react negatively. The issues of an overheating China and numerous political elections in the region added a further layer of uncertainty. China remained very much in the spotlight as the PRC government imposed a series of measures designed to dampen growth. These included raising the banks' reserve requirements for a third time, discouraging investment in the steel, cement and property sectors, and instructing banks to suspend issuing new loans for one week in late April. Initial signs are encouraging 3 Phoenix-Aberdeen Worldwide Opportunities Fund (continued) and, if totally effective, tightening of monetary policy may not be required. An engineered soft landing in China would be very positive for the region as a whole. Despite the prevailing negative sentiment, China's fundamentals remain solid. In Japan, subtle changes in macro-economic trends caused skeptics amongst the consensus to sit up and take notice. GDP statistics depicted growth increasingly broadening out beyond exports into domestic consumption and investment, against a backdrop of broad money expansion and faster credit growth. Increased institutional investor appetite for Japanese government index-linked bonds suggested inflation expectations were rising. The ten-year JGB yield, which bottomed out 12 months ago at 0.5%, moved sharply higher in June to close at 1.85% by month end. Although unequivocal evidence of a sustainable economic recovery in Japan remains elusive, the Bank of Japan will likely be very careful not to repeat previous mistakes and tighten policy too soon. The "Zero Interest Rate" policy is unlikely to be abandoned until strong momentum is evident in the economy and prices have stopped falling. Q: WHAT IS YOUR CURRENT OUTLOOK? A: As the current global economic cycle evolves, the major theme that continually exercises the mind of the discerning investor is the widening gulf between debtor and creditor nations. Much of the developed world, which is also the indebted world, is now entering the transition stage of the business cycle, moving into "late cycle." The late cycle is typically characterized by rising inflation, relatively strong growth and intensifying central bank tightening. It usually starts off with these forces being rather weak and culminates when they are intense. Whether or not this part of the cycle continues until the tightening causes economic recession, is not particularly relevant. More importantly, it virtually always leads to reduced economic activity, fewer housing purchases, lower corporate profits, deteriorating asset quality and increased debt-servicing burdens. Suffice to say, not an ideal environment for equity markets to prosper, yet one increasingly evolving in the developed/indebted world. Then there are the creditor nations, in effect the developing world. Relative to the global economic cycle, many such countries are still in the early phase. Real interest rates are historically high, and have scope to decline. Domestic demand is increasingly replacing exports as the engine of growth in countries where surplus savings, improved debt dynamics and outright global competitiveness means significantly reduced dependency (if any) on foreign capital. Put simply, the developing world is in a much stronger position to handle a global tightening cycle now than at any previous time in history. Its challenge will be to demonstrate fiscal and monetary policy maturity during its own transition stage from being perceived as dependent on world growth to displaying secular adjustment to domestic consumption. Real incomes are growing, foreign direct investment continues and employment opportunities are being created. This implies a relative increase in developing world wealth versus the developed world, a trend already benefiting many of the companies we will continue to emphasize in the Fund's portfolio going forward. JULY 23, 2004 THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND THERE IS NO GUARANTEE THAT MARKET FORECASTS DISCUSSED WILL BE REALIZED. 1 THE MSCI (MORGAN STANLEY CAPITAL INTERNATIONAL) WORLD INDEX(SM) (NET) IS A FREE FLOAT-ADJUSTED MARKET CAPITALIZATION INDEX THAT MEASURES DEVELOPED GLOBAL MARKET EQUITY PERFORMANCE. THE INDEX IS CALCULATED ON A TOTAL-RETURN BASIS WITH NET DIVIDENDS REINVESTED. THE INDEX IS UNMANAGED AND NOT AVAILABLE FOR DIRECT INVESTMENT; THEREFORE IT'S PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE ACTIVE MANAGEMENT OF AN ACTUAL PORTFOLIO. 4 Phoenix-Aberdeen Worldwide Opportunities Fund AVERAGE ANNUAL TOTAL RETURNS 1 PERIODS ENDING 6/30/04 INCEPTION INCEPTION 1 YEAR 5 YEARS 10 YEARS TO 6/30/04 DATE ------- -------- ---------- ---------- ---------- Class A Shares at NAV 2 22.65% (1.10)% 7.10% -- -- Class A Shares at POP 3 15.60 (2.26) 6.47 -- -- Class B Shares at NAV 2 21.78 (1.86) -- 6.09% 7/15/94 Class B Shares with CDSC 4 17.78 (1.86) -- 6.09 7/15/94 Class C Shares at NAV 2 21.66 (1.86) -- 0.30 12/15/98 Class C Shares with CDSC 4 21.66 (1.86) -- 0.30 12/15/98 MSCI World Index (SM) (Net) 8 24.00 (1.70) 7.13 Note 5 Note 5 S&P 500(R) Index 9 19.11 (2.17) 11.87 Note 6 Note 6 GROWTH OF $10,000 PERIODS ENDING 6/30 This Growth of $10,000 chart assumes an initial investment of $10,000 made on 6/30/94 in Class A shares and reflects the maximum sales charge of 5.75% on the initial investment. Performance assumes dividends and capital gains are reinvested. The performance of other share classes will be greater or less than that shown based on differences in inception dates, fees and sales charges. [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS: Phoenix-Aberdeen Worldwide Opportunities MSCI Fund World Index(SM) S&P 500(R) Class A 7 (Net) 8 Index 9 6/30/94 $ 9,425 $10,000 $10,000 6/30/95 10,041 11,067 12,611 6/30/96 12,188 13,108 15,905 6/28/97 13,821 16,027 21,432 6/30/98 18,168 18,756 27,926 6/30/99 19,785 21,695 34,267 6/30/00 22,059 24,340 36,808 6/30/01 18,791 19,400 31,347 6/29/02 16,846 16,448 25,710 6/28/03 15,264 16,058 25,777 6/30/04 18,723 19,912 30,704 COUNTRY WEIGHTINGS 6/30/04 As a percentage of equity holdings [GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS: United States 42% Japan 17 United Kingdom 9 France 6 Hong Kong 3 Italy 3 Brazil 3 Other 17 1 Total returns are historical and include changes in share price and the reinvestment of both dividends and capital gains distributions. 2 "NAV" (Net Asset Value) total returns do not include the effect of any sales charge. 3 "POP" (Public Offering Price) total returns include the effect of the maximum front-end 5.75% sales charge. 4 CDSC (Contingent Deferred Sales Charge) is applied to redemptions of certain classes of shares that do not have a sales charge applied at the time of purchase. CDSC charges for B shares decline from 5% to 0% over a five year period. CDSC charges for C shares are 1% in the first year and 0% thereafter. 5 Index performance is 6.98% for Class B (since 7/29/94) and (0.07)% for Class C (since 12/31/98). 6 Index performance is 11.65% for Class B (since 7/15/94) and 1.12% for Class C (since 12/16/98). 7 This chart illustrates POP returns on Class A Shares for ten years. Returns on Class B and Class C Shares will vary due to differing sales charges. 8 The MSCI (Morgan Stanley Capital International) World Index(SM) (Net) is a free float-adjusted market capitalization index that measures developed global market equity performance. The index is calculated on a total-return basis with net dividends reinvested. 9 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market total return performance. The index's performance does not reflect sales charges. The index is not available for direct investment; therefore, its performance does not reflect the expenses associated with the active management of an actual portfolio. ALL RETURNS REPRESENT PAST PERFORMANCE WHICH MAY NOT BE INDICATIVE OF FUTURE PERFORMANCE. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PLEASE VISIT PHOENIXINVESTMENTS.COM FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END. 5 Phoenix-Aberdeen Worldwide Opportunities Fund TEN LARGEST HOLDINGS AT JUNE 30, 2004 (AS A PERCENTAGE OF NET ASSETS) 1. Petroleo Brasileiro SA ADR 1.9% 2. Takeda Chemical Industries Ltd. 1.8% 3. General Electric Co. 1.8% 4. Valeo SA 1.7% 5. Canon, Inc. 1.7% 6. Bank of America Corp. 1.7% 7. Microsoft Corp. 1.6% 8. ENI SpA 1.5% 9. Oversea-Chinese Banking Corp. Ltd. 1.5% 10. Riunione Adriatica di Sicurta SpA 1.5% SCHEDULE OF INVESTMENTS AT JUNE 30, 2004 SHARES VALUE --------- ------------- DOMESTIC COMMON STOCKS--39.6% UNITED STATES--39.6% AmerisourceBergen Corp. (Health Care Distributors) . 8,900 $ 532,042 Anadarko Petroleum Corp. (Oil & Gas Exploration & Production) ........................................ 5,800 339,880 Applied Materials, Inc. (Semiconductor Equipment)(b) ...................................... 26,200 514,044 ARAMARK Corp. Class B (Diversified Commercial Services) .......................................... 13,100 376,756 Avnet, Inc. (Technology Distributors)(b) ........... 21,800 494,860 Avocent Corp. (Communications Equipment)(b) ........ 14,200 521,708 AVX Corp. (Electronic Equipment Manufacturers) ..... 24,700 356,915 Bank of America Corp. (Diversified Banks) .......... 23,200 1,963,183 Brunswick Corp. (Leisure Products) ................. 12,500 510,000 Caesars Entertainment, Inc. (Casinos & Gaming)(b) .. 38,200 573,000 Cardinal Health, Inc. (Health Care Distributors) ... 10,300 721,515 Caremark Rx, Inc. (Health Care Services)(b) ........ 13,800 454,572 Cisco Systems, Inc. (Communications Equipment)(b) .. 49,700 1,177,890 Citigroup, Inc. (Other Diversified Financial Services) ......................................... 10,300 478,950 Clorox Co. (The) (Household Products) .............. 10,200 548,556 CVS Corp. (Drug Retail) ............................ 19,500 819,390 Dell, Inc. (Computer Hardware)(b) .................. 15,700 562,374 DENTSPLY International, Inc. (Health Care Equipment) ......................................... 15,100 786,710 Du Pont (E.I.) de Nemours & Co. (Diversified Chemicals) ......................................... 26,200 1,163,804 Exxon Mobil Corp. (Integrated Oil & Gas) ........... 21,700 963,697 FedEx Corp. (Air Freight & Couriers) ............... 5,800 473,802 Fiserv, Inc. (Data Processing & Outsourced Services)(b) ....................................... 32,600 1,267,814 Fisher Scientific International, Inc. (Health Care Supplies)(b) ....................................... 15,300 883,575 General Electric Co. (Industrial Conglomerates) .... 63,800 2,067,120 SHARES VALUE --------- ------------- UNITED STATES--CONTINUED Harte-Hanks, Inc. (Advertising) .................... 24,000 $ 585,840 Heinz (H.J.) Co. (Packaged Foods & Meats) .......... 12,600 493,920 J.P. Morgan Chase & Co. (Diversified Capital Markets)........................................... 30,200 1,170,854 Jacobs Engineering Group, Inc. (Construction & Engineering)(b) .................................... 11,600 456,808 Johnson & Johnson (Pharmaceuticals) ................ 14,600 813,220 Kellogg Co. (Packaged Foods & Meats) ............... 13,800 577,530 Manor Care, Inc. (Health Care Facilities) .......... 15,400 503,272 Manpower, Inc. (Employment Services) ............... 10,000 507,700 Marvel Enterprises, Inc. (Leisure Products)(b) ..... 46,800 913,536 McKesson Corp. (Health Care Distributors) .......... 12,300 422,259 Mellon Financial Corp. (Asset Management & Custody Banks) ..................................... 32,700 959,091 Merrill Lynch & Co., Inc. (Investment Banking & Brokerage) ......................................... 11,100 599,178 Microsoft Corp. (Systems Software) ................. 65,400 1,867,824 Morgan Stanley (Investment Banking & Brokerage) .... 24,900 1,313,973 Motorola, Inc. (Communications Equipment) .......... 19,100 348,575 National Semiconductor Corp. (Semiconductors)(b) ... 24,300 534,357 NIKE, Inc. Class B (Footwear) ...................... 4,700 356,025 Norfolk Southern Corp. (Railroads) ................. 35,400 938,808 Omnicare, Inc. (Health Care Distributors) .......... 26,600 1,138,746 Oracle Corp. (Systems Software)(b) ................. 61,100 728,923 Patterson-UTI Energy, Inc. (Oil & Gas Drilling) .... 8,700 290,667 PepsiCo, Inc. (Soft Drinks) ........................ 12,000 646,560 Pfizer, Inc. (Pharmaceuticals) ..................... 41,200 1,412,336 Procter & Gamble Co. (The) (Household Products) .... 15,200 827,488 Robert Half International, Inc. (Employment Services) .......................................... 17,000 506,090 Ryder System, Inc. (Air Freight & Couriers) ........ 20,400 817,428 SBC Communications, Inc. (Integrated Telecommunication Services) ........................ 16,900 409,825 See Notes to Financial Statements 6 Phoenix-Aberdeen Worldwide Opportunities Fund SHARES VALUE --------- ------------- UNITED STATES--CONTINUED Teradyne, Inc. (Semiconductor Equipment)(b) ........ 9,200 $ 208,840 Time Warner, Inc. (Movies & Entertainment)(b) ...... 91,300 1,605,054 U.S. Bancorp (Diversified Banks) ................... 11,200 308,672 Union Pacific Corp. (Railroads) .................... 6,200 368,590 United Technologies Corp. (Aerospace & Defense) .... 9,400 859,912 Verizon Communications, Inc. (Integrated Telecommunication Services) ........................ 14,400 521,136 Vishay Intertechnology, Inc. (Electronic Equipment Manufacturers)(b) .................................. 40,000 743,200 Walt Disney Co. (The) (Movies & Entertainment) ..... 36,300 925,287 Wells Fargo & Co. (Diversified Banks) .............. 21,200 1,213,276 Willis Group Holdings Ltd. (Insurance Brokers) ..... 6,900 258,405 Yellow Roadway Corp. (Trucking)(b) ................. 14,700 585,942 - -------------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $43,046,073) 46,291,304 - -------------------------------------------------------------------------------- FOREIGN COMMON STOCKS(c)--56.0% BERMUDA--0.4% ACE Ltd. (Property & Casualty Insurance) ........... 11,700 494,676 BRAZIL--2.8% Petroleo Brasileiro SA ADR (Integrated Oil & Gas) .. 87,000 2,192,400 Unibanco-Uniao de Bancos Brasileiros SA GDR (Diversified Banks) ................................ 57,600 1,138,752 ------------ 3,331,152 ------------ FRANCE--6.2% Aventis SA (Pharmaceuticals) ....................... 16,500 1,245,635 PSA Peugeot Citroen SA (Automobile Manufacturers) ..................................... 21,000 1,169,406 Schneider Electric SA (Industrial Machinery) ....... 20,000 1,365,080 Total SA (Integrated Oil & Gas) .................... 7,525 1,434,633 Valeo SA (Auto Parts & Equipment) .................. 48,300 2,012,671 ------------ 7,227,425 ------------ GERMANY--1.4% Metro AG (Department Stores)(b) .................... 35,700 1,693,940 HONG KONG--3.0% China Mobile Ltd. (Wireless Telecommunication Services) .......................................... 457,000 1,382,753 Giordano International Ltd. (Apparel Retail) ....... 1,400,000 883,997 Swire Pacific Ltd. Class B (Multi-Sector Holdings) . 1,115,000 1,265,129 ------------ 3,531,879 ------------ ITALY--2.9% ENI SpA (Integrated Oil & Gas) ..................... 87,166 1,730,742 SHARES VALUE --------- ------------- ITALY--CONTINUED Riunione Adriatica di Sicurta SpA (Property & Casualty Insurance) ................................ 94,000 $ 1,705,182 ------------ 3,435,924 ------------ JAPAN--16.7% Alpine Electronics, Inc. (Household Appliances) .... 82,500 1,112,954 Canon, Inc. (Office Electronics) ................... 38,000 2,002,474 Daito Trust Construction Co. Ltd. (Homebuilding) ... 30,000 1,154,745 Honda Motor Co. Ltd. (Automobile Manufacturers) .... 24,500 1,181,048 Kao Corp. (Household Products) ..................... 65,000 1,566,696 Kyocera Corp. (Office Electronics) ................. 11,500 975,943 Mitsubishi Tokyo Financial Group, Inc. (Diversified Banks) ............................................. 83 768,272 Nikko Cordial Corp. (Investment Banking & Brokerage) ......................................... 186,000 901,746 Nippon Television Network Corp. (Broadcasting & Cable TV) .......................................... 9,700 1,591,257 NTT DoCoMo, Inc. (Wireless Telecommunication Services) .......................................... 935 1,670,943 ORIX Corp. (Consumer Finance) ...................... 12,200 1,397,608 Takeda Chemical Industries Ltd. (Pharmaceuticals) .. 49,000 2,151,033 Toyota Motor Corp. (Automobile Manufacturers) ...... 32,000 1,296,247 Yamanouchi Pharmaceutical Co. Ltd. (Health Care Supplies) .......................................... 50,000 1,681,712 ------------ 19,452,678 ------------ LUXEMBOURG--0.9% Arcelor (Steel) .................................... 63,520 1,066,485 MEXICO--1.4% Telefonos de Mexico SA de CV ADR Series L (Integrated Telecommunication Services) ............ 49,000 1,630,230 NETHERLANDS--2.3% ING Groep NV (Other Diversified Financial Services) 57,000 1,345,370 Koninklijke (Royal) KPN NV (Integrated Telecommunication Services)(b) ..................... 171,000 1,302,374 ------------ 2,647,744 ------------ SINGAPORE--1.9% Flextronics International Ltd. (Electronic Manufacturing Services)(b) ......................... 29,100 464,145 Oversea-Chinese Banking Corp. Ltd. (Diversified Banks) ............................................. 245,000 1,721,095 ------------ 2,185,240 ------------ SOUTH KOREA--1.4% Kookmin Bank ADR (Diversified Banks)(b) ............ 52,900 1,660,002 See Notes to Financial Statements 7 Phoenix-Aberdeen Worldwide Opportunities Fund SHARES VALUE --------- ------------- SPAIN--1.2% Altadis SA (Tobacco) ............................... 44,000 $ 1,359,727 SWEDEN--2.6% Nordea Bank AB (Diversified Banks) ................. 116,000 835,396 Svenska Handelsbanken AB Class A (Diversified Banks) ............................................. 73,000 1,463,305 Volvo AB Class B (Construction, Farm Machinery & Heavy Trucks) ...................................... 21,000 730,391 ------------ 3,029,092 ------------ SWITZERLAND--2.1% Novartis AG (Pharmaceuticals) ...................... 32,000 1,411,690 Zurich Financial Services AG (Property & Casualty Insurance)(b) ...................................... 6,500 1,026,329 ------------ 2,438,019 ------------ UNITED KINGDOM--8.8% AstraZeneca plc (Pharmaceuticals) .................. 23,600 1,058,837 BP plc (Integrated Oil & Gas) ...................... 74,000 653,549 Britannic Group plc (Property & Casualty Insurance) 41,708 279,291 British American Tobacco plc (Tobacco) ............. 60,000 929,781 BT Group plc (Integrated Telecommunication Services) .......................................... 183,500 660,563 Cadbury Schweppes plc (Packaged Foods & Meats)(b) .......................................... 162,000 1,397,691 Emap plc (Publishing & Printing) ................... 93,000 1,248,051 Marks & Spencer Group plc (Department Stores) ...... 145,000 953,878 Sainsbury (J) plc (Food Retail) .................... 199,500 1,030,206 Schroders plc (Asset Management & Custody Banks) ............................................. 58,000 644,772 Weir Group plc (The) (Industrial Machinery) ........ 150,000 786,152 Wood Group (John) plc (Oil & Gas Equipment & Services) .......................................... 253,000 595,313 ------------ 10,238,084 ------------ - -------------------------------------------------------------------------------- TOTAL FOREIGN COMMON STOCKS (IDENTIFIED COST $56,817,078) 65,422,297 - -------------------------------------------------------------------------------- SHARES VALUE --------- ------------- EXCHANGE TRADED FUNDS--0.2% SPDR Trust Series I (Exchange Traded Funds) ........ 2,100 $ 240,513 - -------------------------------------------------------------------------------- TOTAL EXCHANGE TRADED FUNDS (IDENTIFIED COST $221,193) 240,513 - -------------------------------------------------------------------------------- FOREIGN PREFERRED STOCKS(c)--1.4% SOUTH KOREA--1.4% Samsung Electronics Co. Ltd. Pfd. (Semiconductors) ................................... 6,000 1,573,345 - -------------------------------------------------------------------------------- TOTAL FOREIGN PREFERRED STOCKS (IDENTIFIED COST $336,950) 1,573,345 - -------------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--97.2% (IDENTIFIED COST $100,421,294) 113,527,459 - -------------------------------------------------------------------------------- STANDARD & POOR'S PAR RATING VALUE (Unaudited) (000) ----------- ----- SHORT-TERM OBLIGATIONS--3.0% COMMERCIAL PAPER--3.0% Clipper Receivables Co. LLC 1.50%, 7/1/04 ... A-1 $ 3,470 3,470,000 - ------------------------------------------------------------------------------- TOTAL SHORT-TERM OBLIGATIONS (IDENTIFIED COST $3,470,000) 3,470,000 - ------------------------------------------------------------------------------- TOTAL INVESTMENTS--100.2% (IDENTIFIED COST $103,891,294) 116,997,459(a) Other assets and liabilities, net--(0.2)% (185,001) ------------ NET ASSETS--100.0% $116,812,458 ============ (a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $15,627,964 and gross depreciation of $3,061,603 for federal income tax purposes. At June 30, 2004, the aggregate cost of securities for federal income tax purposes was $104,431,098. (b) Non-income producing. (c) Foreign Common Stocks and Foreign Preferred Stocks are determined based on the country in which the security is issued. The country at risk, noted in the header, is determined based on criteria described in Note 2F "Foreign security country determination" in the Notes to Financial Statements. See Notes to Financial Statements 8 Phoenix-Aberdeen Worldwide Opportunities Fund INDUSTRY DIVERSIFICATION AS A PERCENTAGE OF TOTAL VALUE OF TOTAL LONG-TERM INVESTMENTS (UNAUDITED) Advertising .......................................................... 0.5% Aerospace & Defense .................................................. 0.8 Air Freight & Couriers ............................................... 1.1 Apparel Retail ....................................................... 0.8 Asset Management & Custody Banks ..................................... 1.4 Auto Parts & Equipment ............................................... 1.8 Automobile Manufacturers ............................................. 3.2 Broadcasting & Cable TV .............................................. 1.4 Casinos & Gaming ..................................................... 0.5 Communications Equipment ............................................. 1.8 Computer Hardware .................................................... 0.5 Construction & Engineering ........................................... 0.4 Construction, Farm Machinery & Heavy Trucks .......................... 0.7 Consumer Finance ..................................................... 1.2 Data Processing & Outsourced Services ................................ 1.1 Department Stores .................................................... 2.3 Diversified Banks .................................................... 9.8 Diversified Capital Markets .......................................... 1.0 Diversified Chemicals ................................................ 1.0 Diversified Commercial Services ...................................... 0.3 Drug Retail .......................................................... 0.7 Electronic Equipment Manufacturers ................................... 1.0 Electronic Manufacturing Services .................................... 0.4 Employment Services .................................................. 0.9 Exchange Traded Funds ................................................ 0.2 Food Retail .......................................................... 0.9 Footwear ............................................................. 0.3 Health Care Distributors ............................................. 2.5 Health Care Equipment ................................................ 0.7 Health Care Facilities ............................................... 0.4 Health Care Services ................................................. 0.4 Health Care Supplies ................................................. 2.3 Homebuilding ......................................................... 1.0% Household Appliances ................................................. 1.0 Household Products ................................................... 2.6 Industrial Conglomerates ............................................. 1.8 Industrial Machinery ................................................. 1.9 Insurance Brokers .................................................... 0.2 Integrated Oil & Gas ................................................. 6.2 Integrated Telecommunication Services ................................ 4.0 Investment Banking & Brokerage ....................................... 2.5 Leisure Products ..................................................... 1.3 Movies & Entertainment ............................................... 2.2 Multi-Sector Holdings ................................................ 1.1 Office Electronics ................................................... 2.6 Oil & Gas Drilling ................................................... 0.3 Oil & Gas Equipment & Services ....................................... 0.5 Oil & Gas Exploration & Production ................................... 0.3 Other Diversified Financial Services ................................. 1.6 Packaged Foods & Meats ............................................... 2.2 Pharmaceuticals ...................................................... 7.1 Property & Casualty Insurance ........................................ 3.1 Publishing & Printing ................................................ 1.1 Railroads ............................................................ 1.2 Semiconductor Equipment .............................................. 0.6 Semiconductors ....................................................... 1.9 Soft Drinks .......................................................... 0.6 Steel ................................................................ 0.9 Systems Software ..................................................... 2.3 Technology Distributors .............................................. 0.4 Tobacco .............................................................. 2.0 Trucking ............................................................. 0.5 Wireless Telecommunication Services .................................. 2.7 ------ 100.0% ====== See Notes to Financial Statements 9 Phoenix-Aberdeen Worldwide Opportunities Fund STATEMENT OF ASSETS AND LIABILITIES JUNE30, 2004 ASSETS Investment securities at value (Identified cost $103,891,294) $116,997,459 Cash 1,608 Receivables Investment securities sold 1,771,815 Dividends 183,058 Tax reclaims 48,321 Fund shares sold 2,801 Prepaid expenses 82 ------------ Total assets 119,005,144 ------------ LIABILITIES Payables Investment securities purchased 1,654,549 Fund shares repurchased 296,742 Investment advisory fee 71,737 Transfer agent fee 63,680 Distribution and service fees 29,585 Financial agent fee 9,039 Trustees' fee 5,279 Accrued expenses 62,075 ------------ Total liabilities 2,192,686 ------------ NET ASSETS $116,812,458 ============ NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $136,801,621 Undistributed net investment income 649,675 Accumulated net realized loss (33,749,518) Net unrealized appreciation 13,110,680 ------------ NET ASSETS $116,812,458 ============ CLASS A Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $107,519,523) 13,936,165 Net asset value per share $7.72 Offering price per share $7.72/(1-5.75%) $8.19 CLASS B Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $5,987,010) 849,433 Net asset value and offering price per share $7.05 CLASS C Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $3,305,925) 470,465 Net asset value and offering price per share $7.03 STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 2004 INVESTMENT INCOME Dividends $ 2,601,104 Interest 16,061 Foreign taxes withheld (218,140) ------------ Total investment income 2,399,025 ------------ EXPENSES Investment advisory fee 867,356 Service fees, Class A 265,583 Distribution and service fees, Class B 66,260 Distribution and service fees, Class C 27,881 Financial agent fee 107,660 Transfer agent 357,665 Custodian 72,125 Registration 49,382 Professional 39,812 Printing 38,055 Trustees 30,304 Miscellaneous 18,641 ------------ Total expenses 1,940,724 ------------ NET INVESTMENT INCOME 458,301 ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on investments 12,510,343 Net realized loss on foreign currency transactions (42,611) Net change in unrealized appreciation (depreciation) on investments 10,185,208 Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency translation 1,005 ------------ NET GAIN ON INVESTMENTS 22,653,945 ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 23,112,246 ============ See Notes to Financial Statements 10 Phoenix-Aberdeen Worldwide Opportunities Fund STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended 6/30/04 6/30/03 ----------------- ------------- FROM OPERATIONS Net investment income (loss) $ 458,301 $ 806,641 Net realized gain (loss) 12,467,732 (22,368,030) Net change in unrealized appreciation (depreciation) 10,186,213 7,227,703 ------------ ------------ INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 23,112,246 (14,333,686) ------------ ------------ FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class A (1,279,007) -- Net investment income, Class B (23,604) -- Net investment income, Class C (9,530) -- ------------ ------------ DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (1,312,141) -- ------------ ------------ FROM SHARE TRANSACTIONS CLASS A Proceeds from sales of shares (1,437,159 and 3,172,309 shares, respectively) 9,994,078 19,009,892 Net asset value of shares issued from reinvestment of distributions (158,883 and 0 shares, respectively) 1,159,848 -- Cost of shares repurchased (3,067,823 and 5,583,459 shares, respectively) (21,804,016) (33,402,717) ------------ ------------ Total (10,650,090) (14,392,825) ------------ ------------ CLASS B Proceeds from sales of shares (101,910 and 187,195 shares, respectively) 689,962 1,015,567 Net asset value of shares issued from reinvestment of distributions (3,273 and 0 shares, respectively) 21,894 -- Cost of shares repurchased (413,334 and 440,134 shares, respectively) (2,753,754) (2,373,842) ------------ ------------ Total (2,041,898) (1,358,275) ------------ ------------ CLASS C Proceeds from sales of shares (180,829 and 741,582 shares, respectively) 1,266,655 4,039,555 Net asset value of shares issued from reinvestment of distributions (1,166 and 0 shares, respectively) 7,778 -- Cost of shares repurchased (126,871 and 917,239 shares, respectively) (841,734) (4,828,577) ------------ ------------ Total 432,699 (789,022) ------------ ------------ INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (12,259,289) (16,540,122) ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS 9,540,816 (30,873,808) NET ASSETS Beginning of period 107,271,642 138,145,450 ------------ ------------ END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $649,675 AND $719,626, RESPECTIVELY] $116,812,458 $107,271,642 ============ ============
See Notes to Financial Statements 11 Phoenix-Aberdeen Worldwide Opportunities Fund FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A ------------------------------------------------------ YEAR ENDED JUNE 30, ------------------------------------------------------ 2004 2003 2002 2001 2000 Net asset value, beginning of period $ 6.37 $ 7.03 $ 7.87 $10.46 $10.93 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) 0.03 0.05 0.03 0.01 (0.01) Net realized and unrealized gain (loss) 1.41 (0.71) (0.84) (1.44) 1.08 ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.44 (0.66) (0.81) (1.43) 1.07 ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Dividends from net investment income (0.09) -- -- (0.02) -- Distributions from net realized gains -- -- (0.03) (1.14) (1.54) ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.09) -- (0.03) (1.16) (1.54) ------ ------ ------ ------ ------ Change in net asset value 1.35 (0.66) (0.84) (2.59) (0.47) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 7.72 $ 6.37 $ 7.03 $ 7.87 $10.46 ====== ====== ====== ====== ====== Total return(2) 22.65% (9.39)% (10.35)% (14.81)% 11.49 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $107,520 $98,135 $125,216 $158,775 $195,357 RATIO TO AVERAGE NET ASSETS OF: Operating expenses 1.62% 1.73 % 1.56 % 1.54 % 1.56 % Net investment income (loss) 0.46% 0.81 % 0.39 % 0.10 % (0.06)% Portfolio turnover 122% 160 % 99 % 168 % 112 % CLASS B ----------------------------------------------------- YEAR ENDED JUNE 30, ----------------------------------------------------- 2004 2003 2002 2001 2000 Net asset value, beginning of period $ 5.81 $ 6.46 $ 7.29 $ 9.84 $10.44 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) (0.02) --(3) (0.03) (0.06) (0.08) Net realized and unrealized gain (loss) 1.28 (0.65) (0.77) (1.35) 1.02 ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.26 (0.65) (0.80) (1.41) 0.94 ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Dividends from net investment income (0.02) -- -- -- -- Distributions from net realized gains -- -- (0.03) (1.14) (1.54) ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.02) -- (0.03) (1.14) (1.54) ------ ------ ------ ------ ------ Change in net asset value 1.24 (0.65) (0.83) (2.55) (0.60) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 7.05 $ 5.81 $ 6.46 $ 7.29 $ 9.84 ====== ====== ====== ====== ====== Total return(2) 21.78 % (10.20)% (10.90)% (15.58)% 10.71 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $5,987 $6,730 $9,119 $13,066 $17,317 RATIO TO AVERAGE NET ASSETS OF: Operating expenses 2.37 % 2.48 % 2.31 % 2.29 % 2.31 % Net investment income (loss) (0.34)% 0.04 % (0.38)% (0.66)% (0.80)% Portfolio turnover 122 % 160 % 99 % 168 % 112 % (1) Computed using average shares outstanding. (2) Maximum sales charges are not reflected in the total return calculation. (3) Amount is less than $0.01.
See Notes to Financial Statements 12 Phoenix-Aberdeen Worldwide Opportunities Fund FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C ---------------------------------------------------- YEAR ENDED JUNE 30, ---------------------------------------------------- 2004 2003 2002 2001 2000 ------ ------ ------ ------ ------ Net asset value, beginning of period $ 5.80 $ 6.45 $ 7.28 $ 9.82 $10.42 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) (0.01) (0.01) (0.03) (0.06) (0.07) Net realized and unrealized gain (loss) 1.27 (0.64) (0.77) (1.34) 1.01 ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.26 (0.65) (0.80) (1.40) 0.94 ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Dividends from net investment income (0.03) -- -- -- -- Distributions from net realized gains -- -- (0.03) (1.14) (1.54) ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (0.03) -- (0.03) (1.14) (1.54) ------ ------ ------ ------ ------ Change in net asset value 1.23 (0.65) (0.83) (2.54) (0.60) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $ 7.03 $ 5.80 $ 6.45 $ 7.28 $ 9.82 ====== ====== ====== ====== ====== Total return(2) 21.66 % (10.08)% (11.06)% (15.50)% 10.71 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $3,306 $2,407 $3,811 $5,650 $6,704 RATIO TO AVERAGE NET ASSETS OF: Operating expenses 2.37 % 2.48 % 2.31 % 2.29 % 2.31 % Net investment income (loss) (0.18)% (0.10)% (0.39)% (0.65)% (0.74)% Portfolio turnover 122 % 160 % 99 % 168 % 112 % (1) Computed using average shares outstanding. (2) Maximum sales charges are not reflected in the total return calculation.
See Notes to Financial Statements 13 PHOENIX EQUITY TRUST NOTES TO FINANCIAL STATEMENTS JUNE 30, 2004 1. ORGANIZATION Phoenix Equity Trust (the "Trust"), formerly Phoenix-Aberdeen Worldwide Opportunities Fund, 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 one fund, the Phoenix-Aberdeen Worldwide Opportunities Fund ("the Fund") is offered for sale. The Fund is diversified and has an investment objective of capital appreciation. The Fund offers Class A, Class B and Class C shares. Class A shares 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 expenses and has exclusive voting rights with respect to its distribution plan. Income and expenses and realized and unrealized gains and losses of the Fund are borne pro rata by the holders of each class of shares. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, 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. Debt securities are valued on the basis of broker quotations or valuations provided by a pricing service, which utilizes information with respect to recent sales, market transactions in comparable securities, quotations from dealers, and various relationships between securities in determining value. As required, some securities and assets are valued at fair value as determined in good faith by or under the direction of the Trustees. Certain foreign common stocks may be fair valued in cases where closing prices are not readily available or are deemed not reflective of readily available market prices. For example, significant events (such as movement in the U.S. securities market, or other regional and local developments) may occur between the time that foreign markets close (where the security is principally traded) and the time that the Fund calculates its net asset value (generally, the close of the NYSE) that may impact the value of securities traded in these foreign markets. In these cases, information from an external vendor may be utilized to adjust closing market prices of certain foreign common stocks to reflect their fair value. Because the frequency of significant events is not predictable, fair valuation of certain foreign common stocks may occur on a frequent basis. Short-term investments having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market. 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. The 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: It is the policy of the 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, the 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 Fund may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. The Fund will accrue for such taxes and recoveries as applicable based on 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 the Fund on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences may include the treatment of non-taxable dividends, market premium and discount, non-deductible expenses, expiring capital loss carryovers, foreign currency gain or loss, gain or loss on futures contracts, partnerships, operating losses and losses deferred due to wash sales. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to capital paid in on shares of benefical 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 14 PHOENIX EQUITY TRUST NOTES TO FINANCIAL STATEMENTS JUNE 30, 2004 (CONTINUED) 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 Fund does 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. FOREIGN SECURITY COUNTRY DETERMINATION: A combination of the following criteria is used to assign the countries at risk listed in the Schedule 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 FEES AND RELATED PARTY TRANSACTIONS As compensation for its services to the Fund, the Adviser, Phoenix Investment Counsel, Inc., an indirect, wholly-owned subsidiary of The Phoenix Companies, Inc. ("PNX"), is entitled to a fee at an annual rate of 0.75% of the average daily net assets of the Fund up to $1 billion, 0.70% of such value between $1 billion and $2 billion, and 0.65% in excess of $2 billion. Aberdeen Asset Management Inc. ("Aberdeen") formerly known as Aberdeen Fund Managers, Inc., is the subadviser to the Fund. Aberdeen is a subsidiary of Aberdeen Asset Management PLC, of which PNX owns approximately 15%. For its services, Aberdeen is paid a fee by the Adviser equal to 0.375% of the average daily net assets of the Fund up to $1 billion, 0.35% between $1 billion and $2 billion, and 0.325% in excess of $2 billion. As Distributor of the Fund's shares, Phoenix Equity Planning Corporation ("PEPCO"), an indirect, wholly-owned subsidiary of PNX, has advised the Fund that it retained net selling commissions of $3,783 for Class A shares and deferred sales charges of $9,113 for Class B shares and $911 for Class C shares for the period ended June 30, 2004. In addition to these amounts, for the period July 1, 2003 to May 31, 2004, $3,560 was paid to W.S. Griffith Securities, Inc., formerly an indirect subsidiary of PNX, for Class A net selling commissions. On May 31, 2004, W.S. Griffith Securities, Inc. was sold to Linsco/Private Ledger, an independent broker/dealer, and is no longer a subsidiary of PNX. In addition, the 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 of the average daily net assets of each respective class. PEPCO has advised the Fund of the following information: $97,042 was retained by the Distributor and $255,220 was paid to unaffiliated participants for the period ended June 30, 2004 and $7,462 was paid to W.S. Griffith Securities, Inc. for the period ended May 31, 2004. Under certain circumstances, shares of certain Phoenix Funds may be exchanged for shares of the same class of certain other Phoenix Funds on the basis of the relative net asset values per share at the time of the exchange. On exchanges with share classes that carry a contingent deferred sales charge, the CDSC schedule of the original shares purchased continues to apply. As Financial Agent of the Fund, PEPCO receives a financial agent fee equal to the sum of (1) the documented cost to PEPCO to provide tax services and oversight of the performance of PFPC Inc (subagent to PEPCO) plus (2) the documented cost of fund accounting and related services provided by PFPC Inc. The fee schedule of PFPC Inc. ranges from 0.065% to 0.03% of the average daily net asset values of the Fund. Certain minimum fees may apply. For the period ended June 30, 2004, the Fund paid PEPCO Financial Agent Fees totaling $107,660. PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust Company serving as sub-transfer agent. For the period ended June 30, 2004, transfer agent fees were $357,665 as reported in the Statement of Operations, of which PEPCO retained $129,983. For the period ended June 30, 2004, the Fund paid PXP Securities Corp., an indirect, wholly-owned subsidiary of PNX, brokerage commissions of $10,433 in connection with portfolio transactions effected on behalf of the Fund. 4. PURCHASES AND SALES OF SECURITIES Portfolio purchases and sales of investments, excluding short-term securities, for the period ended June 30, 2004, aggregated $137,955,269 and $152,515,301, respectively. There were no purchases or sales of long-term U.S. Government securities. 5. CREDIT RISK AND ASSET CONCENTRATIONS In countries with limited or developing markets, investments may present greater risks than in more developed markets and the prices of such investments may be volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of these investments and the income they generate, as well as the Fund's ability to repatriate such amounts. The Fund may invest a high percentage of its assets in specific sectors of the market in its pursuit of a greater investment return. Fluctuations in these sectors of concentration may have a greater impact on the Fund, positive or negative, than if the Fund did not concentrate its investments in such sectors. 15 PHOENIX EQUITY TRUST NOTES TO FINANCIAL STATEMENTS JUNE 30, 2004 (CONTINUED) 6. FEDERAL INCOME TAX INFORMATION The Fund has the following capital loss carryovers which may be used to offset future capital gains. Expiration Year -------------------------------------------------- 2010 2011 Total ------------- ------------- ----------------- $13,317,397 $20,161,056 $33,478,453 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. For the period ended June 30, 2004, the Fund utilized losses of $2,518,598 deferred in the prior year against current year capital gains. Under the current tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended June 30, 2004, the Fund deferred post-October capital losses of $0 and recognized prior year post-October losses of $7,650,626. The components of distributable earnings on a tax basis (excluding unrealized appreciation (depreciation) which is disclosed in the Schedule of Investments) consist of undistributed ordinary income of $916,011 and undistributed long-term capital gains of $0. The differences between the book and tax basis components of distributable earnings relate principally to the timing of recognition of income and gains for federal income tax purposes. Short-term gains distributions reported in the Statement of Changes in Net Assets, if any, are reported as ordinary income for federal tax purposes. Dividends from net investment income reported in the Statement of Changes in Net Assets include $918,414 of tax exempt income. 7. RECLASSIFICATION OF CAPITAL ACCOUNTS For financial reporting purposes, book basis capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Permanent reclassifications can arise from differing treatment of certain income and gain transactions, on deductible current year net operating losses, expiring capital loss carryovers and investments in passive foreign investment companies. The reclassifications have no impact on the net assets or net asset value of the Fund. As of June 30, 2004, the Fund increased undistributed net investment income by $783,889, decreased accumulated net realized loss by $781,486 and decreased paid in capital by $2,403. 8. OTHER Effective December 4, 2003, Aberdeen Fund Managers, Inc. changed its name to Aberdeen Asset Management Inc. 9. PROXY VOTING PROCEDURES (UNAUDITED) The Adviser and subadviser vote proxies relating to portfolio securities in accordance with procedures that have been approved by the Fund's Board of Trustees. You may obtain a description of these procedures, 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. - -------------------------------------------------------------------------------- TAX INFORMATION NOTICE (UNAUDITED) For the fiscal year ended June 30, 2004, for federal income tax purposes, 51.1% of the ordinary income dividends paid by the Fund qualify for the dividends received deduction for corporate shareholders. Effective for the fiscal year ended June 30, 2004, the Fund hereby designates 100%, or the maximum allowable of its ordinary income dividends to qualify for the lower tax rate. The actual percentage for the calendar year will be designated in the year-end tax statements. - -------------------------------------------------------------------------------- 16 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM [GRAPHIC OMITTED] PRICEWATERHOUSECOOPERS To the Board of Trustees of Phoenix Equity Trust and Shareholders of Phoenix-Aberdeen Worldwide Opportunities Fund In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Phoenix-Aberdeen Worldwide Opportunities Fund (constituting Phoenix Equity Trust, hereafter referred to as the "Fund") at June 30, 2004, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2004, by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts August 13, 2004 17 FUND MANAGEMENT (UNAUDITED) 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 NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ E. Virgil Conway Served since 1993. 35 Chairman, Rittenhouse Advisors, LLC (consulting firm) since 2001. Rittenhouse Advisors, LLC Trustee/Director, Realty Foundation of New York (1972-present), 101 Park Avenue Pace University (1978-present), New York Housing Partnership New York, NY 10178 Development Corp. (Chairman) (1981-present), Greater New York DOB: 8/2/29 Councils, Boy Scouts 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 1993. 35 Currently retired. The Flat, Elmore Court Elmore, GL05, GL2 3NT U.K. DOB: 8/9/29 - ------------------------------------------------------------------------------------------------------------------------------------ S. Leland Dill Served since 2004. 24 Currently retired. Trustee, Scudder Investments (33 portfolios) 7721 Blue Heron Way (1986-present). Director, Coutts & Co. Trust Holdings Limited West Palm Beach, FL 33412 (1991-1999), Coutts & Co. Group (1994-1999) and Coutts & Co. DOB: 3/28/30 International (USA) (private banking) (1992-2000). - ------------------------------------------------------------------------------------------------------------------------------------ Francis E. Jeffries Served since 1995. 28 Director, The Empire District Electric Company (1984-present). 8477 Bay Colony Dr. #902 Naples, FL 34108 DOB: 9/23/30 - ------------------------------------------------------------------------------------------------------------------------------------ Leroy Keith, Jr. Served since 1993. 25 Partner, Stonington Partners, Inc. (private equity fund) since Stonington Partners, Inc. 2001. Chairman (1995-2000) and Chief Executive Officer 736 Market Street, Ste. 1430 (1995-1998), Carson Products Company (cosmetics). Chattanooga, TN 37402 Director/Trustee, Evergreen Funds (six portfolios). DOB: 2/14/39 - ------------------------------------------------------------------------------------------------------------------------------------
18 FUND MANAGEMENT (UNAUDITED) (CONTINUED)
INDEPENDENT TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF PORTFOLIOS IN FUND COMPLEX NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ Geraldine M. McNamara Served since 2001. 35 Managing Director, U.S. Trust Company of New York (private bank) U.S. Trust Company of (1982-present). New York 11 West 54th Street New York, NY 10019 DOB: 4/17/51 - ------------------------------------------------------------------------------------------------------------------------------------ Everett L. Morris Served since 1995. 35 Currently retired. Vice President, W.H. Reaves and Company 164 Laird Road (investment management) (1993-2003). Colts Neck, NJ 07722 DOB: 5/26/28 - ------------------------------------------------------------------------------------------------------------------------------------ Donald B. Romans Served since 2004. 24 President, Romans & Company (private investors and financial 39 S. Sheridan Road consultants) (1987-present). Trustee, Burnham Investors Trust (5 Lake Forest, IL 60045 portfolios) (1967-present). DOB: 4/22/31 - ------------------------------------------------------------------------------------------------------------------------------------ Richard E. Segerson Served since 1993. 25 Managing Director, Northway Management Company (1998-present). Northway Management Company 164 Mason Street Greenwich, CT 06830 DOB: 2/16/46 - ------------------------------------------------------------------------------------------------------------------------------------ Lowell P. Weicker, Jr. Served since 1995. 25 Director, UST, Inc. (1995-present), HPSC Inc. (1995-present), 200 Duke Street Compuware (1996-present) and WWF, Inc. (2000-present). President, Alexandria, VA 22314 The Trust for America's Health (non-profit) (2001-present). DOB: 5/16/31 - ------------------------------------------------------------------------------------------------------------------------------------
19 FUND MANAGEMENT (UNAUDITED) (CONTINUED) INTERESTED TRUSTEES Each of the individuals listed below is an "interested person" of the Fund, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended, and the rules and regulations thereunder.
- ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF NAME ADDRESS, PORTFOLIOS IN DATE OF BIRTH FUND COMPLEX AND POSITION(S) WITH LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND TRUST TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ *Marilyn E. LaMarche Served since 2002. 30 Limited Managing Director, Lazard Freres & Co. LLC Lazard Freres & Co. LLC (1983-present). Director, The Phoenix Companies, Inc. 30 Rockefeller Plaza, (2001-present) and Phoenix Life Insurance Company (1989-present). 59th Floor New York, NY 10020 DOB: 5/11/34 - ------------------------------------------------------------------------------------------------------------------------------------ **Philip R. McLoughlin Served since 1993. 71 Consultant, Phoenix Investment Partners Ltd. (2002-present). DOB: 10/23/46 Director, PXRE Corporation (Delaware) (1985-present), World Trust Fund (1991-present). Chairman (1997-2002), Director (1995-2002), Chairman and President Vice 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 (1999-2002). 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. - ------------------------------------------------------------------------------------------------------------------------------------ ***James M. Oates Served since 1993. 30 Chairman, Hudson Castle Group, Inc. (formerly IBEX Capital Hudson Castle Group, Inc. Markets Inc.) (financial services) (1997-present). Managing c/o Northeast Investment Director, Wydown Group (consulting firm) (1994-present). Management, Inc. Director, Investors Financial Service Corporation (1995-present), 150 Federal Street Investors Bank & Trust Corporation (1995-present), Plymouth Suite 1000 Rubber Co. (1995-present), Stifel Financial (1996-present), Boston, MA 02109 Connecticut River Bancorp (1998-present), Connecticut River Bank DOB: 5/31/46 (1998-present), 1Mind, Inc. (1999-present) and 1Mind.com (2000-present). Director and Treasurer, Endowment for Health, Inc. (2000-present). Chairman, Emerson Investment Management, Inc. (2000-present). Member, Chief Executives Organization (1996-present). Vice Chairman, Massachusetts Housing Partnership (1998-1999). Director, Blue Cross and Blue Shield of New Hampshire (1994-1999), AIB Govett Funds (1991-2000) and Command Systems, Inc. (1998-2000). Director, Phoenix Investment Partners, Ltd. (1995-2001). - ------------------------------------------------------------------------------------------------------------------------------------ * Ms. LaMarche is an "interested person," as defined in the Investment Company Act of 1940, by reason of her position as Director of The Phoenix Companies, Inc. and Phoenix Life Insurance Company. ** 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. *** Mr. Oates is being treated as an Interested Trustee due to certain relationships existing among Mr. Oates, Hudson Castle Group, Inc. and Phoenix and certain of its affiliates.
20 FUND MANAGEMENT (UNAUDITED) (CONTINUED) OFFICERS OF THE FUND WHO ARE NOT TRUSTEES
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 - ------------------------------------------------------------------------------------------------------------------------------------ John F. Sharry Executive Vice President Executive Vice President (1998-present), Phoenix Investment Partners, DOB: 3/28/52 since 1998. Ltd. President, Phoenix Equity Planning Corporation (2000-present). Executive Vice President, Phoenix Fund Complex (1998-present). - ------------------------------------------------------------------------------------------------------------------------------------ Francis G. Waltman Senior Vice President Vice President, Chief Administrative Officer (2004-present), Senior DOB: 7/27/62 since May 2004. Vice President, Chief Administrative Officer, Private Client Group (1999-2004), Phoenix Investment Partners, Ltd. Senior Vice President, Phoenix Fund Complex (May 2004-present). - ------------------------------------------------------------------------------------------------------------------------------------ Nancy G. Curtiss Treasurer since 1994. Vice President, Fund Accounting (1994-2000), Treasurer (1996-2000), DOB: 11/24/52 Assistant Treasurer (2001-2003), Vice President, Operations (2003-present), Phoenix Equity Planning Corporation. Treasurer, Phoenix Fund Complex (1994-present). - ------------------------------------------------------------------------------------------------------------------------------------ Richard J. Wirth Chief Legal Officer since Vice President and Insurance and Investment Products Counsel One American Row 2003; Secretary since 2002. (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. - ------------------------------------------------------------------------------------------------------------------------------------
21 PHOENIX EQUITY TRUST 101 Munson Street Greenfield, Massachusetts 01301 TRUSTEES E. Virgil Conway Harry Dalzell-Payne S. Leland Dill Francis E. Jeffries Leroy Keith, Jr. Marilyn E. LaMarche Philip R. McLoughlin Geraldine M. McNamara Everett L. Morris James M. Oates Donald B. Romans Richard E. Segerson Lowell P. Weicker, Jr. OFFICERS Philip R. McLoughlin, President John F. Sharry, Executive Vice President Francis G. Waltman, Senior Vice President Nancy G. Curtiss, Treasurer Richard J. Wirth, Secretary INVESTMENT ADVISER Phoenix Investment Counsel, Inc. 56 Prospect Street Hartford, Connecticut 06115-0480 PRINCIPAL UNDERWRITER Phoenix Equity Planning Corporation 56 Prospect Street Hartford, Connecticut 06115-0480 TRANSFER AGENT Phoenix Equity Planning Corporation 56 Prospect Street Hartford, Connecticut 06115-0480 CUSTODIAN Brown Brothers Harriman & Co. 40 Water Street Boston, Massachusetts 02109 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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 - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- (This page has been left blank intentionally.) (This page has been left blank intentionally.) 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 758 (8/04) ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. (d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. As of the end of the period covered by the report, the registrant's board of directors has determined that E. Virgil Conway and Everett L. Morris are qualified to serve as audit committee financial experts serving on its audit committee and that they are "independent," as defined by Item 3 of Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Audit Fees - ---------- (a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $27,520 for 2003 and $27,520 for 2004. Audit-Related Fees - ------------------ (b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $0 for 2003 and $0 for 2004. Tax Fees - -------- (c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $5,400 for 2003 and $5,400 for 2004. "Tax Fees" are those primarily associated with review of the Trust's tax provision and qualification as a regulated investment company (RIC) in connection with audits of the Trust's financial statement, review of year-end distributions by the Fund to avoid excise tax for the Trust, periodic discussion with management on tax issues affecting the Trust, and reviewing and signing the Fund's federal income and excise tax returns. All Other Fees - -------------- (d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2003 and $0 for 2004. (e)(1) The PHOENIX EQUITY TRUST (the "Fund") Board has adopted policies and procedures with regard to the pre-approval of services provided by PwC. Audit, audit-related and tax compliance services provided to the Fund on an annual basis require specific pre-approval by the Board. As noted above, the Board must also approve other non-audit services provided to the Fund and those non-audit services provided to the Fund's Affiliated Service Providers that relate directly to the operations and financial reporting of the Fund. Certain of these non-audit services that the Board believes are a) consistent with the SEC's auditor independence rules and b) routine and recurring services that will not impair the independence of the independent auditors may be approved by the Board without consideration on a specific case-by-case basis ("general pre-approval"). The Audit Committee has determined that Mr. E. Virgil Conway, Chair of the Audit Committee, may provide pre-approval for such services that meet the above requirements in the event such approval is sought between regularly scheduled meetings. In the event that Mr. Conway determines that the full board should review the request, he has the opportunity to convene a meeting of the Funds Board. In any event, the Board is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. (e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: (b) n/a (c) 100% (d) n/a (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was less than fifty percent. (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $248,000 for 2003 and $386,478 for 2004. (h) The registrant's audit committee of the board of directors HAS considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not yet applicable. 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) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(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 Equity Trust -------------------------------------------------------------------- By (Signature and Title)* /s/Philip R. McLoughlin ------------------------------------------------------- Philip R. McLoughlin, Chairman (principal executive officer) Date September 3, 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 September 3, 2004 --------------------------------------------------------------------------- By (Signature and Title)* /s/Nancy G. Curtiss ------------------------------------------------------- Nancy G. Curtiss, Treasurer (principal financial officer) Date September 3, 2004 --------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.P 2 g11541_ethicscode.txt CODE OF ETHICS EX-99.CODE ETH THE "CODE" - ---------- THE CODE OF ETHICS APPLIES TO THE PRINCIPAL EXECUTIVE, FINANCIAL AND ACCOUNTING OFFICERS OF THE PHOENIX COMPANIES, INC. ("PNX"). IT CONSTITUTES THE MAIN PART OF THE PHOENIX CODE OF CONDUCT, WHICH HAS APPLIED TO ALL EMPLOYEES OF PNX AND ITS SUBSIDIARIES FOR MANY YEARS. WE PLAN TO CONTINUE TO REVISE BOTH CODES FROM TIME TO TIME AS NEEDED TO KEEP THEM VIABLE, RELEVANT AND IN COMPLIANCE WITH ALL APPLICABLE LEGISLATIVE AND REGULATORY REQUIREMENTS. COMMITMENT TO SHAREHOLDERS - -------------------------- PHOENIX IS COMMITTED TO PROVIDING SHAREHOLDER VALUE. ONE WAY WE DO THIS IS BY OBSERVING THE HIGHEST STANDARDS OF LEGAL AND ETHICAL CONDUCT IN ALL OF OUR BUSINESS DEALINGS. CONFLICTS OF INTEREST Phoenix expects every employee, officer and director to maintain the highest moral and ethical standards and to avoid conflicts of interest in conducting business activities. A "conflict of interest" occurs when an individual's private interest interferes, or even appears to interfere, in any way with the interests of the corporation as a whole. A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interest also arise when an employee, officer or director, or a member of his or her family, receives improper personal benefits as a result of his or her position in the Company. Employees requested to serve on the Board of Directors of another company by Phoenix owe a fiduciary duty to Phoenix as well as to the company on whose Board of Directors he or she serves. Where conflicts of interest arise between the interests of Phoenix and the other company, the employee should consult Phoenix's General Counsel for guidance. Moreover, no employee requested to serve on the Board of Directors of another company shall accept fees or other compensation for Board service. In the event the company for which an employee serves as a director requires directors to receive fees, any remuneration received by the employee shall be donated to a charitable organization. The Company will offset any tax consequences incurred by the employee. All conflicts of interest must be disclosed in writing to the Chief Compliance Officer. Employees, officers and directors are required to file a Conflict of Interest Statement annually. Any conflicts of interest that arise following completion of the Conflict of Interest Statement must be promptly reported to the Chief Compliance Officer in writing. CORPORATE OPPORTUNITIES Employees, officers and directors owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises. Consequently, employees, officers and directors are prohibited from engaging in the following activities: o Taking for themselves personal opportunities that are discovered through the use of corporate property, information or position; o Using Company property, information or position for personal gain; and o Competing with the Company. INSIDER TRADING AND PERSONAL TRADING Federal securities laws and Company policy prohibit the purchase or sale of securities while in possession of material non-public information and prohibit passing such information on to others. No employee, officer or director may buy or sell Phoenix securities if he or she has material non-public information. This restriction also applies to an employee's spouse, other adults living in the employee's household, and minor children. Employees and their family members also must avoid passing non-public information on to third parties. Information is "material" if a reasonable investor would probably consider the information important in deciding whether to buy, hold or sell securities of the company to which the information relates. Officers are subject to certain restrictions under New York Insurance Law governing ownership of Phoenix stock. Officers and their family members are prohibited from purchasing shares of Phoenix stock for a period of two years from the date of demutualization. All employees with a title of Vice President or higher, plus certain other employees whose positions place them in regular contact with non-public information, are subject to a further restriction as well. These employees may only buy or sell Phoenix securities during "window" periods. No employee, officer or director may buy or sell securities of another company with the knowledge that those securities are being considered for purchase or sale by Phoenix, any of its subsidiaries or any advisory accounts. In the case of any company in which Phoenix owns 10 percent or more of the outstanding equity, no employee (or family member) may make any personal investment without prior approval from the Law Department. Certain employees who are involved with the Company's investment adviser and broker-dealer operations may be required to secure preclearance of and/or report all personal securities transactions. In addition, Phoenix reserves the right to require duplicate confirmations, quarterly transaction reports and prior clearance for any personal securities transactions. If you have any question whether your position requires preclearance or reporting, you should contact the compliance officer for your business area (investment adviser or broker-dealer) or the Corporate Compliance Department. CONFIDENTIALITY Employees are required to maintain the confidentiality of information entrusted to them by the Company or its customers. Disclosure of confidential information is restricted to authorized persons or in situations in which disclosure is legally mandated. Confidential information includes all non-public information that may or may not be of use to competitors, or harmful to the Company or its customers if disclosed, including, but not limited to: internal operating procedures; investment strategies; sales data and customer lists; financial plans; projections; and reports. An employee's obligation to protect confidential information continues even after termination of his or her employment. PROTECTION AND USE OF COMPANY PROPERTY AND ASSETS Employees are given access to Company property to assist them in effectively carrying out their duties to the Company. Company property should only be used for legitimate purposes. All employees should protect the Company's property and ensure its efficient use. Theft, fraud, carelessness and waste have a direct impact on the Company's profitability. Examples of Company property include proprietary and non-public information, equipment, facilities, vehicles, funds and other assets. Improper use or abuse of Company property is prohibited. Expenses to be paid for by the Company, via reimbursement or direct payment, are limited to those expenses that are authorized and related to legitimate business activities. CORPORATE DISCLOSURES As a public company, Phoenix is required to publicly disclose certain information on a regular basis. This includes financial information and other material information about The Phoenix Companies, Inc. It is imperative that such information is disseminated in a consistent manner and in accordance with SEC disclosure requirements and Company policy. In order to ensure that information released is accurate and properly disseminated, only certain individuals are authorized to speak on behalf of the Company. Employees are prohibited from speaking with rating agencies, analysts, investors or the press without obtaining prior authorization from the President and Chief Executive Officer. Employees receiving any such inquiries should refer such individuals to the appropriate area for response: o Press and News Media - All inquiries must be referred to the Senior Vice President, Corporate Communications. o Rating Agencies - All inquiries must be referred to the Chief Financial Officer. o Securities Analysts and Investors - All inquiries must be referred to the Vice President, Investor Relations or the Chief Financial Officer. Employees are prohibited from disclosing any non-public information about the Company's financial performance or commenting on the Company's stock performance. ACCURACY AND RETENTION OF COMPANY RECORDS The integrity of Phoenix's records is vital to the Company's continued success. The altering, falsification or misuse of Company documents is strictly prohibited. Phoenix's business transactions must be accurately recorded on the Company's books and records in accordance with generally accepted accounting principles, any other required accounting basis and established Company policy. Financial information must fairly represent all relevant information. The retention and destruction of Company records shall be in accordance with established Company policies and applicable legal and regulatory requirements. COMMITMENT TO CLIENTS - --------------------- Phoenix upholds its commitment to our clients by conducting our business fairly and honestly, and maintaining the highest ethical standards in all dealings with customers. SAFEGUARDING CUSTOMER ASSETS Employees have an obligation to safeguard the assets of our customers at all times, and to protect them from all forms of misuse. Misappropriation of funds can include theft, fraud, embezzlement or unauthorized borrowing. Employees must not, under any circumstances, misappropriate funds, property or other assets, or assist another individual in doing so. ETHICAL MARKET CONDUCT The Company expects all who are involved in the sales and marketing of its products and services to abide by the following principles: o Conduct business according to high standards of honesty and fairness; o Provide competent and customer-focused sales and service; o Engage in active and fair competition; o Provide clear, honest and fair advertising and sales materials; o Handle customer complaints and disputes in an appropriate and timely manner; and o Monitor sales and service procedures to help ensure compliance with ethical market conduct. PRIVACY AND CONFIDENTIAL PERSONAL INFORMATION It is the responsibility of every employee to maintain the privacy of confidential personal information. Confidential personal information includes non-public financial and health information obtained from consumers and customers in connection with providing a financial product or service. Specific examples of confidential personal information include information concerning assets, income, businesses, estates, financial plans and health. The misuse of confidential personal information could subject Phoenix and its employees to civil liability or criminal penalties. Before releasing confidential information to anyone, employees must make certain that releasing it is permitted under Phoenix's policies or authorized in writing by the person to whom it relates. CUSTOMER COMPLAINTS The Company is committed to fairly and expeditiously handling all customer complaints. All complaints must be handled and reported in accordance with established corporate policies as well as procedures established for the applicable business unit or affiliate. Maintaining centralized records serves not only regulatory authorities with oversight of the Companies, but also provides Phoenix and its affiliates with information to consider areas where changes or improvements are needed. FRAUD The Company strongly supports all efforts to detect and prevent fraud. It believes that only through aggressive action to combat fraud can the Company continue to meet its fundamental obligations to its stockholders and customers. When there is reason to believe that Phoenix has been the target of fraud or attempted fraud, it will aggressively work with the appropriate law enforcement officials to seek prosecution and conviction of the responsible individual(s). Any employee who is aware of or suspects fraud must report it to the Corporate Audit Department immediately. INSURANCE ANTI-FRAUD PLAN In accordance with insurance regulatory requirements, Phoenix has a comprehensive insurance anti-fraud plan that is designed to: o Prevent insurance fraud, including: internal fraud involving the Company's officers, employees or agents, fraud resulting from misrepresentations on applications for insurance, and claims fraud; o Report insurance fraud to appropriate law enforcement and regulatory authorities; o Encourage cooperation in the prosecution of insurance fraud cases; and o Aggressively pursue recovery of all sums improperly paid by the Company as a result of fraud. COMMITMENT TO CORPORATE CITIZENSHIP - ----------------------------------- Phoenix is committed to being a responsible corporate citizen, which includes compliance with applicable laws and regulations of the jurisdictions in which we operate as well as engaging in fair competition in the marketplace. COMPLYING WITH LEGAL AND REGULATORY REQUIREMENTS The Company expects all employees to conduct business in accordance with all applicable laws and regulations. The laws and regulations related to the financial services industry are complex, thus placing a duty on each employee to take all reasonable steps to ensure his or her actions are in compliance. Compliance with the law does not comprise our entire ethical responsibility. Rather, it is a minimum standard for performance of our duties. ACCOUNTING, INTERNAL ACCOUNTING CONTROLS OR AUDITING MATTERS The Company treats complaints about accounting, internal accounting controls, or auditing matters seriously and expeditiously. Employees will be given the opportunity to submit confidential and anonymous complaints about accounting or auditing matters for review by representatives of Phoenix, and if appropriate, the Audit Committee of the Board of Directors. These complaints will be handled in a manner that protects the confidentiality and anonymity of the employee when so requested by the employee. No employee will be terminated or otherwise retaliated against for submitting a complaint under this procedure if the employee reasonably believes that the complaint involves a violation of federal securities or anti-fraud laws. FAIR DEALING Each employee must deal fairly with the Company's customers, suppliers, competitors and employees. No employee shall take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or other unfair-dealing practice. ANTITRUST Phoenix is committed to preserving a free and competitive marketplace and will not engage in any understandings or agreements with any competitor that could result in a restraint of trade. Employees must avoid engaging in any conduct that violates the antitrust laws, such as agreements with competitors regarding prices, terms of sale, division of markets and allocations of customers. Discussions with competitors related to market share, projected sales for any specific product or service, revenues and expenses, production schedules, unannounced products and services, pricing or marketing strategies are prohibited. The antitrust laws also apply to informal contacts with competitors, such as trade shows or meetings of professional organizations. Every employee has an obligation to avoid situations that could result in a violation of the antitrust laws. Any questions concerning the legality or appropriateness of specific acts should be directed to the Law Department. ANTI-MONEY LAUNDERING It is the responsibility of every employee to protect the Company from exploitation by individuals engaged in money laundering activities. Accordingly, each employee must undertake the following: o Become familiar with the anti-money laundering laws and their requirements as applied to the Company; and o Learn and fully comply with the Company's anti-money laundering policies and procedures. Failure to comply with applicable laws or the Company's policies may result in significant criminal and civil penalties to the Company as well as those individuals involved. Furthermore, association with any money laundering activity subjects both the Company and its employees to civil and criminal penalties. LOBBYING AND POLITICAL CONTRIBUTIONS Lobbying is generally defined as communicating with a public official, or a member of his or her staff, in the legislative or executive branch of government, for the purpose of influencing legislative or administrative action. Lobbying is highly regulated and lobbyists are required to be registered and to report their activities. No employee may engage in lobbying on behalf of Phoenix without prior permission of the Law Department. The giving of gifts to local public officials and members of their staff, whether in the form of meals, tickets to events or otherwise, is strictly regulated by most states and by the federal government. Employees must be careful to distinguish between personal and corporate political activities. Unless specifically requested by the Company to communicate on its behalf on a particular issue, you should identify communications with legislators as expressing your own personal beliefs and not those of Phoenix. The use of Phoenix stationery for any personal political communication is prohibited. Any employee wishing to be a candidate for elective office should consult with his or her supervisor and department head in advance. Questions regarding the Company's position on proposed legislation or regulation should be referred to Government Relations or the Law Department. FOREIGN CORRUPT PRACTICES ACT The Foreign Corrupt Practices Act prohibits the payment or authorization of the payment of any money, or the giving of value, directly or indirectly, to a foreign official for the purpose of: o Influencing any act or decision of the foreign official; or o Inducing the foreign official to use his influence to assist in obtaining business for or directing business to any person. A "foreign official" is any person acting in an official capacity on behalf of a foreign government, agency, department or instrumentality. Also included under the term "foreign official" are foreign political parties, officials of political parties and candidates for foreign political office. The Foreign Corrupt Practices Act applies to all officers, directors, employees and agents of the Company. Violation of the act can result in both fines and imprisonment. COPYRIGHTS, TRADEMARKS AND PATENTS Employees must avoid infringing upon the intellectual property rights of others. Intellectual property includes copyrights, trademarks, service marks, patents and trade secrets. Improper use includes copying, distributing or modifying third party copyrighted materials without permission. Infringement may result in criminal as well as civil liabilities for Phoenix and its employees. The Company has an agreement with the Copyright Clearance Center that gives a license to Phoenix employees to make photocopies of many publications for business purposes. Contact the Corporate Compliance Department with any questions about the types of copying that are covered by the agreement. COMMITMENT TO EMPLOYEES - ----------------------- PHOENIX'S EMPLOYEES ARE OUR MOST IMPORTANT ASSET AND WE ARE COMMITTED TO FOSTERING A WORK ENVIRONMENT IN WHICH EMPLOYEES HAVE THE OPPORTUNITY TO GROW, CONTRIBUTE AND PARTICIPATE FREE FROM DISCRIMINATION. EQUAL OPPORTUNITY Phoenix employs and promotes on the basis of merit and achievement without regard to age, race, gender, color, religion, national origin, ancestry, sexual orientation, marital status, or disability. This policy applies to every phase of the employment process and every aspect of the employment relationship: recruitment, hiring, training, promotions, transfers, terminations, benefits, compensation and participation in Company-sponsored educational, social and recreational programs. SEXUAL HARASSMENT Phoenix prohibits sexual harassment in the workplace. Sexual harassment includes unwelcome sexual advances, requests for sexual favors and other verbal, visual or physical conduct when: o Submission is made either explicitly or implicitly a term or condition of a person's employment; o Submission to or rejection of inappropriate conduct by an employee is used as the basis for employment decisions affecting the employee; or o The conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile or offensive working environment. Sexual harassment also includes unwelcome sexual flirtations and advances; verbal abuse of a sexual nature; inappropriate touching; graphic or verbal comments about an individual's body; displaying in the workplace a sexually suggestive object or picture; and sexually explicit or offensive jokes. EMPLOYMENT OF RELATIVES The employment of relatives of any director or officer, or any employee working in the Human Resources Department, Corporate Audit Department or Corporate Compliance Department is prohibited. If a situation arises in which relatives are employed by the company and one or both of them later become officers or employees in the departments specified so as to be covered by this policy, a request for a waiver to continue employment of both individuals must be submitted to the Senior Vice President, Corporate Services. Under no circumstances will exceptions be granted for officers at the Vice President level and above, or directors. In addition, related non-officer employees are prohibited from working in the same department, reporting to the same supervisor or reporting to a relative. This policy applies to directors, officers and employees of all affiliated companies, including situations in which the employees may be employed by separate legal entities. This policy also applies to consultants and service providers. For the purposes of this policy, a relative is defined as a spouse, child, parent, sibling, step-parent, step-child, step-sibling, grandparent, grandchild, aunt, uncle, nephew, niece, first cousin and in-law. WORKPLACE SAFETY Phoenix is committed to maintaining a work environment that is safe and healthy for its employees and others. Questions concerning health and safety matters should be referred to your supervisor or Human Resources representative. All job-related injuries or illnesses should be reported immediately to your supervisor or Human Resources representative. Phoenix also does not tolerate acts of violence or threats of violence against employees or Company property. Possession of firearms or other weapons anywhere on Company property or while conducting Company business is prohibited. Any situation or concern involving violent behavior or the threat of violence should be immediately reported to Security or Human Resources. DRUGS AND ALCOHOL The sale, purchase, use, possession or transfer of narcotics or other legally controlled substances by employees while on Company premises or on Company business (other than use of prescription drugs in accordance with a physician's orders) is prohibited. Employees attending functions on behalf of the Company where alcohol is served are expected to use good judgment and avoid consuming excessive amounts of alcoholic beverages. VIOLENT CRIME CONTROL AND LAW ENFORCEMENT ACT OF 1994 Federal Law prohibits the employment of any person convicted of a felony involving dishonesty or breach of trust by an insurance company without the consent of the appropriate state insurance department. To assist the Company in fulfilling its responsibilities under this law, employees are required to disclose any felony conviction to the Company at the time of application for employment. Any employee who is subsequently convicted of a felony must report this fact to the Company immediately. EMPLOYEE OWNERSHIP OF PHOENIX STOCK Employees, officers and directors are subject to various requirements including federal securities laws, and New York Insurance law restrictions governing the ownership of Company stock. Please refer to the Insider Trading and Personal Trading section of this Code for more information. COMMITMENT TO ETHICS AND COMPLIANCE - ----------------------------------- A STRONG COMMITMENT TO BUSINESS ETHICS AND COMPLIANCE IS THE FOUNDATION OF A SUCCESSFUL ORGANIZATION. EVERY EMPLOYEE IS EXPECTED TO CARRY OUT THE COMPANY'S BUSINESS ACTIVITIES IN AN ETHICAL MANNER AND CONSISTENT WITH APPLICABLE LAWS, REGULATIONS, POLICIES AND GUIDELINES. ETHICAL DECISION MAKING Phoenix's success is dependent on each of us applying the highest ethical standards to whatever we do on behalf of the Company. Consider the following guidelines in making ethical decisions. o Is my action consistent with approved Company practices? o Is my action consistent with the Company's preeminent values? o Does my action give the appearance of impropriety? o Can I, in good conscience, defend my action to my supervisor, other employees or the general public? o Does my action meet my personal code of ethical behavior? o Does my action conform to the spirit of these guidelines? COMPLIANCE WITH LAWS AND REGULATIONS Phoenix values its corporate reputation for complying with all applicable laws and regulations in the conduct of its business. Every employee, officer and director shall comply with all applicable laws and regulations while acting on behalf of the Company. MONITORING CODE COMPLIANCE The Corporate Compliance and the Corporate Audit Departments are responsible for monitoring the compliance activities of all areas and ensuring that the Code is being followed. Compliance will be monitored by periodic audits where appropriate. OBTAINING GUIDANCE In any instance where you are uncertain of your obligations under the Code, you should seek guidance before taking any action. If you have a question concerning the Code or any of the Company's related policies or procedures, you should contact the Corporate Compliance Department or the Law Department. TOLL-FREE HELP LINE Phoenix maintains a confidential, 24-hour, toll-free telephone help line for the purpose of requesting assistance or reporting violations. Assistance is available during regular business hours. If you call outside of regular business hours, leave a confidential message and your call will be returned the following business day. Special security measures have been taken with this help line to ensure confidentiality. If you wish to remain anonymous, you may request a case identification number and refer to that number in subsequent phone calls. OBLIGATION TO REPORT Employees are obligated to report suspected violations of the Code to their department head, the Chief Compliance Officer or the Law Department. Failure to do so will result in disciplinary action, including potential termination of employment. WHISTLEBLOWER PROTECTION No retaliation or retribution of any kind will be taken against an employee who reports a suspected violation of the Code in good faith. INVESTIGATION All allegations of suspected violations will be promptly investigated and appropriate action will be taken. Investigations will be conducted in an objective, professional manner. The specifics of an investigation, including the identity of the individual reporting the information, will be kept confidential except as such disclosure is necessary to fully investigate the allegations, facilitate resolution and/or report the results to appropriate authorities. DISCLOSURE TO GOVERNMENT AUTHORITIES Certain actions and omissions prohibited by the Code may also violate criminal laws and may subject violators to criminal prosecution. The Law Department will review the results of investigations that indicate potential violations of criminal law and recommend to the appropriate senior officers whether disclosure to appropriate enforcement authorities is warranted. DISCIPLINARY ACTION FOR VIOLATIONS Failure to adhere to the Code as well as other Company policies and applicable laws may result in disciplinary action up to and including termination of employment. Situations in which disciplinary action may be appropriate include: o Authorization of or participation in activities that violate the law, the Code or other Company policies; o Retaliation, direct or indirect, or encouragement of others to retaliate against an employee who reports a suspected violation; o Failure to cooperate with an investigation of suspected violations, including interfering with or obstructing an investigation; and o Failure to report a violation of the law, the Code or other Company policies. EX-31 3 g11541_302cert.txt 302 CERTIFICATIONS CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Philip R. McLoughlin, certify that: 1. I have reviewed this report on Form N-CSR of Phoenix Equity Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [Omitted] (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent 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; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 3, 2004 /s/Philip R. McLoughlin ------------------- --------------------------------------- Philip R. McLoughlin, Chairman (principal executive officer) CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Nancy G. Curtiss, certify that: 1. I have reviewed this report on Form N-CSR of Phoenix Equity Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [Omitted] (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent 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; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 3, 2004 /s/Nancy G. Curtiss ------------------- --------------------------------------- Nancy G. Curtiss, Treasurer (principal financial officer) EX-32 4 g11541_906cert.txt 906 CERTIFICATIONS CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, Philip R. McLoughlin, Chairman of Phoenix Equity Trust (the "Fund"), certify that: 1. The Form N-CSR of the Registrant (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: September 3, 2004 /s/Philip R. McLoughlin ------------------- --------------------------------------- Philip R. McLoughlin, Chairman (principal executive officer) I, Nancy G. Curtiss, Treasurer of Phoenix Equity Trust (the "Fund"), certify that: 1. The Form N-CSR of the Registrant (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: September 3, 2004 /s/Nancy G. Curtiss ------------------- --------------------------------------- Nancy G. Curtiss, Treasurer (principal financial officer) -----END PRIVACY-ENHANCED MESSAGE-----