-----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, H263Wy8VRwdEbNVADNKOt6eSv0E/KEpbeXQsT1tcO8MGJjNrMi5Ei2x8oEiAZb5I 8FkXDwUjS+UvLztIbk4Vxg== 0000935069-06-002612.txt : 20060908 0000935069-06-002612.hdr.sgml : 20060908 20060908150052 ACCESSION NUMBER: 0000935069-06-002612 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060630 FILED AS OF DATE: 20060908 DATE AS OF CHANGE: 20060908 EFFECTIVENESS DATE: 20060908 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: 061081617 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 0000034273 S000001384 PHOENIX WORLDWIDE STRATEGIES FUND C000003695 CLASS A NWWOX C000003696 CLASS B WWOBX C000003697 CLASS C WWOCX 0000034273 S000001385 PHOENIX MID-CAP VALUE FUND C000003698 CLASS A FMIVX C000003699 CLASS C FMICX 0000034273 S000001386 PHOENIX PATHFINDER FUND C000003700 CLASS A PPTAX C000003701 CLASS C PPTCX 0000034273 S000001387 PHOENIX RELATIVE VALUE FUND C000003702 CLASS A PVRAX C000003703 CLASS C PVRCX 0000034273 S000001388 PHOENIX TOTAL VALUE FUND C000003704 CLASS A PTVAX C000003705 CLASS C PTVCX N-CSR 1 g32138phx_equitytrust.txt PHOENIXFUNDS -- PHOENIX EQUITY TRUST 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) 101 Munson Street Greenfield, MA 01301-9668 ------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Kevin J. Carr, Esq. Vice President, Chief Legal Officer, John H. Beers, Esq. Counsel and Secretary for Registrant Vice President and Counsel Phoenix Life Insurance Company Phoenix Life Insurance Company One American Row One American Row Hartford, CT 06103-2899 Hartford, CT 06103-2899 - ------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (800) 243-1574 --------------- Date of fiscal year end: June 30 -------- Date of reporting period: June 30, 2006 -------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. - -------------------------------------------------------------------------------- JUNE 30, 2006 - -------------------------------------------------------------------------------- ANNUAL REPORT - -------------------------------------------------------------------------------- o PHOENIX MID-CAP VALUE FUND o PHOENIX PATHFINDER FUND o PHOENIX RELATIVE VALUE FUND o PHOENIX TOTAL VALUE FUND o PHOENIX WORLDWIDE STRATEGIES FUND TRUST NAME: PHOENIX EQUITY TRUST WOULDN'T YOU RATHER HAVE THIS DOCUMENT E-MAILED TO YOU? ? Eligible shareholders can sign up for E-delivery [LOGO] PHOENIXFUNDS(SM) at PhoenixFunds.com -------------------------------------------------------------------------- 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 Equity Trust unless preceded or accompanied by an effective prospectus which includes information concerning the sales charge, each Fund's record and other pertinent information. A MESSAGE FROM THE PRESIDENT DEAR PHOENIXFUNDS SHAREHOLDER: [PHOTO] The enclosed annual report addresses the performance of your Phoenix mutual fund for the fiscal year ended June 30, 2006. The report also provides a commentary from your fund's management team on how the fund performed, the investment strategies used, and how the fund's results compared to the broader market. At Phoenix, our focus is on investment performance and serving the best interests of our shareholders. We believe that mutual funds are among the most effective vehicles for individual investors to gain access to a variety of financial markets and for building diversified portfolios. I am especially proud of how we have expanded our fund family over the last year to offer access to even more money managers. Today, the PhoenixFunds draw from the vast expertise of 16 different management teams -- six Phoenix affiliates and 10 outside subadvisers chosen for their complementary investment capabilities. These fund teams operate independently, conducting their research, identifying opportunities in the markets they know best, and applying their disciplined strategies to the portfolios they manage. We are confident in their ability to navigate their funds through whatever market and economic changes lie ahead. When it comes to financial decisions, we recommend working with an experienced financial advisor. If you haven't reviewed or rebalanced your portfolio lately, this may be a good time to meet with your advisor and make sure that your investments are still aligned with your financial goals. Thank you for choosing PhoenixFunds to be part of your financial plan. Sincerely yours, /s/ Daniel T. Geraci Daniel T. Geraci President, PhoenixFunds JULY 2006 1 TABLE OF CONTENTS Glossary.................................................................. 3 Phoenix Mid-Cap Value Fund................................................ 5 Phoenix Pathfinder Fund................................................... 14 Phoenix Relative Value Fund............................................... 22 Phoenix Total Value Fund.................................................. 30 Phoenix Worldwide Strategies Fund......................................... 42 Notes to Financial Statements............................................. 61 Report of Independent Registered Public Accounting Firm................... 66 Fund Management Tables.................................................... 67 - -------------------------------------------------------------------------------- PROXY VOTING PROCEDURES (FORM N-PX) The Adviser and subadvisers vote proxies relating to portfolio securities in accordance with procedures that have been approved by the Trust's Board of Trustees. You may obtain a description of these procedures, along with information regarding how the Funds voted proxies during the most recent 12-month period ended June 30, 2005, free of charge, by calling toll-free 1-800-243-1574. This information is also available through the Securities and Exchange Commission's website at http://www.sec.gov. FORM N-Q INFORMATION The Trust files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the "SEC") for the first and third quarters of each fiscal year on Form N-Q. Form N-Q is available on the SEC's website at http://www.sec.gov. Form N-Q may be reviewed and copied at the SEC's Public Reference Room. Information on the operation of the SEC's Public Reference Room can be obtained by calling toll-free 1-800-SEC-0330. - -------------------------------------------------------------------------------- 2 GLOSSARY ADR (AMERICAN DEPOSITARY RECEIPT) Represents shares of foreign companies traded in U.S. dollars on U.S. exchanges that are held by a bank or a trust. Foreign companies use ADRs in order to make it easier for Americans to buy their shares. DOW JONES-AIG COMMODITY INDEX The Dow Jones-AIG Commodity Index is a broadly diversified index that tracks commodity futures. DOW JONES WILSHIRE REAL ESTATE SECURITIES INDEX The Dow Jones Wilshire Real Estate Securities Index (Full Cap) is a market capitalization-weighted index that measures publicly traded real estate securities such as Real Estate Investment Trusts and Real Estate Operating Companies. The index is calculated on a total return basis with dividends reinvested. EUROPEAN CENTRAL BANK (ECB) The central bank for Europe's single currency, the euro. The ECB's main task is to maintain the euro's purchasing power and thus price stability in the euro area. The euro area comprises the 12 European Union countries that have introduced the euro since 1999. EUROPEAN UNION (EU) A group of European countries, whose member states have set up common institutions to which they delegate some of their sovereignty so that decisions on specific matters of joint interest can be made democratically at a European level. Today, the EU embraces 25 countries and approximately 450 million people. FEDERAL FUNDS RATE The interest rate charged on overnight loans of reserves by one financial institution to another in the United States. The federal funds rate is the most sensitive indicator of the direction of interest rates since it is set daily by the market. FEDERAL OPEN MARKET COMMITTEE (FOMC) A key committee in the Federal Reserve System, responsible for setting short-term monetary policy for the Federal Reserve which causes interest rates to rise or fall. FEDERAL RESERVE (THE "FED") The central bank of the United States, responsible for controlling the money supply, interest rates and credit with the goal of keeping the U.S. economy and currency stable. Governed by a seven-member board, the system includes 12 regional Federal Reserve Banks, 25 branches and all national and state banks that are part of the system. INFLATION Rise in the prices of goods and services resulting from increased spending relative to the supply of goods on the market. MSCI JAPAN INDEX(SM) The MSCI Japan Index(SM) is an equity index of securities listed on Japanese stock exchanges. MSCI WORLD(SM) INDEX (NET) The MSCI World(SM) Index (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. NVDR (NON-VOTING DEPOSITORY RECEIPT) Trading instruments issued in place of stocks by the Stock Exchange of Thailand in order to simulate foreign investment in Thai companies. NVDR holders receive all financial benefits as a company's ordinary shareholders -- dividends, right issues, or warrants - except voting rights. 3 GLOSSARY (CONTINUED) REITS (REAL ESTATE INVESTMENT TRUSTS) Real estate investment trusts are typically publicly traded companies that own, develop and operate income-producing real estate such as apartments, office buildings, hotels, shopping centers and other commercial properties. ROIC (RETURN ON INVESTED CAPITAL) ROIC is a highly useful metric for assessing the quality of a company. It is expressed as a percentage and calculated by dividing a company's total capital into its earnings before interest, taxes and dividends. RUSSELL MIDCAP(R) INDEX The Russell Midcap(R) Index is a market capitalization-weighted index of medium-capitalization stocks of U.S. companies. The index is calculated on a total return basis with dividends reinvested. RUSSELL MIDCAP(R) VALUE INDEX Indexes are unmanaged and not available for direct investment; therefore their performance does not reflect the expenses associated with active management of an actual portfolio. RUSSELL 1000(R) GROWTH INDEX The Russell 1000(R) Growth Index is a market capitalization-weighted index of growth-oriented stocks of the 1,000 largest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. RUSSELL 1000(R) VALUE INDEX The Russell 1000(R) Value Index is a market capitalization-weighted index of value-oriented stocks of the 1,000 largest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. RUSSELL 2000(R) INDEX The Russell 2000(R) Index is a market capitalization-weighted index of the 2,000 smallest companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. S&P 500(R) INDEX The S&P 500 Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. SPONSORED ADR An ADR which is issued with the cooperation of the company whose stock will underlie the ADR. These shares carry all the rights of the common share such as voting rights. ADRs must be sponsored to be able to trade on the NYSE. YIELD CURVE A line chart that shows interest rates at a specific point in time for securities of equivalent quality but with different maturities. A "normal or positive" yield curve indicates that short-term securities have a lower interest rate than long-term securities; an "inverted or negative" yield curve indicates short-term rates are exceeding long-term rates; and a "flat yield curve" means short- and long-term rates are about the same. INDEXES ARE UNMANAGED AND NOT AVAILABLE FOR DIRECT INVESTMENT; THEREFORE THEIR PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH ACTIVE MANAGEMENT OF AN ACTUAL PORTFOLIO. 4 PHOENIX MID-CAP VALUE FUND A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, BRUCE BOTTOMLEY, MARK HELDERMAN AND DANIEL LEARY Q: HOW DID THE PHOENIX MID-CAP VALUE FUND PERFORM DURING THE FISCAL YEAR ENDED JUNE 30, 2006? A: For the fiscal year ended June 30, 2006, the Fund's Class A shares returned 11.07%, and Class C shares returned 10.26%. For the same period, the Russell MidCap(R) Index, a broad-based equity index, returned 13.66%; and Russell MidCap(R) Value Index, the Fund's style-speciFiC benchmark, returned 14.25%. All performance figures assume reinvestment of distributions and exclude the effect of sales charges. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE. Q: HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? A: The equity markets were fraught with many crosscurrents over the last 12 months. On the plus side, the worldwide economy was strong and companies continued to post positive quarterly earnings. On the negative side, rising oil prices and interest rates, together with a slowing housing market, put a damper on consumer spending and sentiment. Despite the negatives, strong earnings drove the market higher, and in early May most benchmarks posted record highs, prompted by the belief that an end to interest rate hikes was in sight. However, the euphoria was short lived and the market reversed course when the Federal Reserve's stance on fighting inflation reignited interest rate fears. Investors worldwide suddenly turned risk averse, with emerging markets and small-cap stocks declining the most. The market's main concern is that the Fed's vigilance in fighting inflation by raising interest rates might cause a recession. Coupled with the relentless rise in oil prices and mounting hostilities in the Middle East, the market did not have much to cheer about, leaving investors cautious at fiscal year end. While the fiscal year ended on a difficult quarter, most major benchmarks posted double digit returns for the one-year period, such as the S&P 500 Index, which gained 8.63% -- a good return considering all of the above. Q: WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE FISCAL YEAR? A: The Fund had a rough start to the fiscal year as the portfolio was adversely affected by what we dub "energy scissors" -- having too little exposure to high flying energy stocks while also holding too many consumer stocks which were negatively impacted by rising energy prices. As companies adjusted and restructurings took hold, however, the portfolio started to outperform and ended the fiscal year on a stronger note. Our disciplined investment style has consistently led us to invest in undervalued, restructuring candidates that often march to their own drummers. While external factors can have a short-term impact on the restructuring pace of the companies in the portfolio, our many years of experience investing in these types of companies has proved rewarding. 5 PHOENIX MID-CAP VALUE FUND (CONTINUED) Leading the Fund's performance for the fiscal year was a diverse group of companies, all reflecting positive restructuring efforts. Some of the best performance came from our capital goods holdings, such as ABB and Thomas & Betts. While many of our consumer stocks lagged, a number of them posted strong gains and helped overall performance, including J.C. Penney and Big Lots. Looking ahead, we are maintaining our long held view that in the choppy, range-bound market we envision, companies that can "show the earnings" will emerge as major winners, and stock pickers who do their homework will fare well. JULY 2006 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 WILL BE REALIZED. FOR DEFINITIONS OF INDEXES CITED AND CERTAIN INVESTMENT TERMS USED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 3. 6 PHOENIX MID-CAP VALUE FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS 1 PERIODS ENDING 6/30/06 - --------------------------------------------------------------------------------
INCEPTION INCEPTION 1 YEAR 5 YEARS TO 6/30/06 DATE ------- -------- ---------- --------- Class A Shares at NAV 2 11.07% 12.50% 10.43% 12/30/97 Class A Shares at POP 3 4.68 11.17 9.66 12/30/97 Class C Shares at NAV 2 10.26 -- 12.20 10/22/04 Class C Shares with CDSC 4 10.26 -- 12.20 10/22/04 Russell MidCap(R) Index 13.66 9.92 Note 5 Note 5 Russell MidCap(R) Value Index 14.25 13.01 Note 6 Note 6
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE ABOVE TABLE AND GRAPH BELOW DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. PLEASE VISIT PHOENIXFUNDS.COM FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END. 1 TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. 2 "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 CLASS C SHARES THAT DO NOT HAVE A SALES CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER. 5 INDEX PERFORMANCE IS 9.91% FOR CLASS A (SINCE 12/30/97) AND 19.37% CLASS C (SINCE 10/22/04). 6 INDEX PERFORMANCE IS 10.83% FOR CLASS A (SINCE 12/30/97) AND 20.95% CLASS C (SINCE 10/22/04). - -------------------------------------------------------------------------------- GROWTH OF $10,000 PERIODS ENDING 6/30/06 - -------------------------------------------------------------------------------- This Growth of $10,000 chart assumes an initial investment of $10,000 made on 12/30/97 (inception of the Fund) in Class A shares. The total return for Class A shares reflects the maximum sales charge of 5.75% on the initial investment. The performance of Class C will be greater or less than that shown based on differences in inception dates, fees and sales charges. Performance assumes dividends and capital gain distributions are reinvested. [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Phoenix Mid-Cap Value Fund Class A Russell Midcap(R) Value Index Russell Midcap(R) Index 12/30/1997 $ 9,425 $10,000 $10,000 06/30/1998 9,811 10,788 10,999 06/30/1999 9,293 11,395 12,243 06/30/2000 8,687 10,494 13,790 06/29/2001 12,159 13,005 13,922 06/28/2002 13,241 13,255 12,637 06/30/2003 12,208 13,170 12,970 06/30/2004 17,095 17,228 16,782 06/30/2005 19,726 20,983 19,654 06/30/2006 21,910 23,974 22,338
For information regarding the indexes, see the glossary on page 3. 7 PHOENIX MID-CAP VALUE FUND ABOUT YOUR FUND'S EXPENSES We believe it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder of the Mid-Cap Value Fund, you incur two types of costs: (1) transaction costs, including sales charges on purchases of Class A shares and contingent deferred sales charges on Class C shares; and (2) ongoing costs, including investment advisory fees; distribution and service fees; and other expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges or contingent deferred sales charges. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs could have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Beginning Ending Expenses Paid Mid-Cap Value Fund Account Value Account Value During Class A December 31, 2005 June 30, 2006 Period* - ------------------------ ----------------- ------------- ------------- Actual $1,000.00 $1,084.40 $6.46 Hypothetical (5% return before expenses) 1,000.00 1,018.53 6.27 * EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.25%, WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS A RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV FOR THE FISCAL YEAR WAS 11.07%. AN INVESTMENT OF $1,000.00 AT JUNE 30, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,110.70. Beginning Ending Expenses Paid Mid-Cap Value Fund Account Value Account Value During Class C December 31, 2005 June 30, 2006 Period* - ------------------------ ----------------- ------------- ------------- Actual $1,000.00 $1,080.80 $10.32 Hypothetical (5% return before expenses) 1,000.00 1,014.76 10.04 * EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.00%, WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365 TO REFLECT THE PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS C RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV FOR THE FISCAL YEAR WAS 10.26%. AN INVESTMENT OF $1,000.00 AT JUNE 30, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,102.60. YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING EXPENSES AND OTHER SHAREHOLDER COSTS REFER TO THE PROSPECTUS. 8 PHOENIX MID-CAP VALUE FUND - -------------------------------------------------------------------------------- SECTOR WEIGHTINGS 6/30/06 - -------------------------------------------------------------------------------- As a percentage of total investments [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Industrials 23% Consumer Discretionary 21 Utilities 19 Materials 17 Consumer Staples 14 Financials 1 Other 5 SCHEDULE OF INVESTMENTS JUNE 30, 2006
SHARES VALUE ------------- -------------- DOMESTIC COMMON STOCKS--85.2% AEROSPACE & DEFENSE--3.1% Raytheon Co. .......................................... 199,200 $ 8,878,344 APPAREL RETAIL--8.2% Foot Locker, Inc. ..................................... 515,600 12,627,044 Limited Brands, Inc. .................................. 429,400 10,988,346 -------------- 23,615,390 -------------- AUTO PARTS & EQUIPMENT--2.4% Lear Corp. ............................................ 308,400 6,849,564 BUILDING PRODUCTS--2.2% American Standard Cos., Inc. .......................... 145,800 6,308,766 DEPARTMENT STORES--4.3% Penney (JC) Co., Inc. ................................. 183,000 12,354,330 DIVERSIFIED CHEMICALS--4.2% Hercules, Inc.(b) ..................................... 784,400 11,969,944 ELECTRIC UTILITIES--1.8% Reliant Energy, Inc.(b) ............................... 442,400 5,299,952 ELECTRICAL COMPONENTS & EQUIPMENT--2.2% Thomas & Betts Corp.(b) ............................... 122,000 6,258,600 ENVIRONMENTAL & FACILITIES SERVICES--6.8% Allied Waste Industries, Inc.(b) ...................... 885,850 10,063,256 Waste Management, Inc. ................................ 260,800 9,357,504 -------------- 19,420,760 -------------- FOOD RETAIL--2.7% Safeway, Inc. ......................................... 301,100 7,828,600 GAS UTILITIES--3.5% ONEOK, Inc. ........................................... 295,900 10,072,436 GENERAL MERCHANDISE STORES--2.8% Big Lots, Inc.(b) ..................................... 462,100 7,892,668
SHARES VALUE ------------- -------------- HOUSEWARES & SPECIALTIES--3.2% Fortune Brands, Inc. .................................. 131,200 $ 9,316,512 INDEPENDENT POWER PRODUCERS & ENERGY TRADERS--6.8% Dynegy, Inc. Class A(b) ............................... 1,273,700 6,967,139 Mirant Corp.(b) ....................................... 279,200 7,482,560 NRG Energy, Inc.(b) ................................... 107,900 5,198,622 -------------- 19,648,321 -------------- LEISURE PRODUCTS--0.2% Brunswick Corp. ....................................... 20,000 665,000 METAL & GLASS CONTAINERS--8.3% Ball Corp. ............................................ 170,700 6,322,728 Crown Holdings, Inc.(b) ............................... 649,300 10,109,601 Pactiv Corp.(b) ....................................... 303,800 7,519,050 -------------- 23,951,379 -------------- MULTI-UTILITIES--6.3% Duke Energy Corp. ..................................... 617,384 18,132,568 OFFICE SERVICES & SUPPLIES--1.9% ACCO Brands Corp.(b) .................................. 253,232 5,545,781 PACKAGED FOODS & MEATS--6.8% Del Monte Foods Co. ................................... 866,500 9,730,795 Sara Lee Corp. ........................................ 620,400 9,938,808 -------------- 19,669,603 -------------- PAPER PACKAGING--2.9% Packaging Corporation of America ...................... 378,500 8,334,570 PROPERTY & CASUALTY INSURANCE--0.7% Alleghany Corp.(b) .................................... 6,996 1,933,362 TRUCKING--3.9% Laidlaw International, Inc. ........................... 441,900 11,135,880 - ---------------------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $221,498,181) 245,082,330 - ----------------------------------------------------------------------------------------
See Notes to Financial Statements 9 PHOENIX MID-CAP VALUE FUND
SHARES VALUE ------------- -------------- FOREIGN COMMON STOCKS(c)--9.3% COMMODITY CHEMICALS--2.0% NOVA Chemicals Corp. (United States) .................. 199,000 $ 5,729,210 FOOD RETAIL--4.5% Koninklijke Ahold NV Sponsored ADR (Netherlands)(b) ...................................... 1,499,800 12,973,270 HEAVY ELECTRICAL EQUIPMENT--2.8% ABB Ltd. Sponsored ADR (Switzerland) .................. 622,500 8,067,600 - ---------------------------------------------------------------------------------------- TOTAL FOREIGN COMMON STOCKS (IDENTIFIED COST $23,373,589) 26,770,080 - ---------------------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--94.5% (IDENTIFIED COST $244,871,770) 271,852,410 - ----------------------------------------------------------------------------------------
PAR VALUE (000) ------------- SHORT-TERM INVESTMENTS--5.1% COMMERCIAL PAPER(d)--5.1% Alpine Securitization Corp. 5.28%, 7/5/06 ............. $ 3,245 3,243,096 Alpine Securitization Corp. 5.25%, 7/12/06 ............ 1,645 1,642,361 Danaher Corp. 5.27%, 7/10/06 .......................... 4,035 4,029,684 Danske Corp. 5.25%, 7/5/06 ............................ 1,405 1,404,180 General Electric Capital Corp. 5.25%, 7/24/06 ......... 1,345 1,340,489 Ranger Funding Co. LLC 5.27%, 7/7/06 .................. 2,500 2,497,804 Target Corp. 5.12%, 7/3/06 ............................ 490 489,861 - ---------------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $14,647,475) 14,647,475 - ---------------------------------------------------------------------------------------- TOTAL INVESTMENTS--99.6% (IDENTIFIED COST $259,519,245) 286,499,885(a) Other assets and liabilities, net--0.4% 1,188,176 -------------- NET ASSETS--100.0% $ 287,688,061 ==============
(a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $34,923,743 and gross depreciation of $8,044,006 for federal income tax purposes. At June 30, 2006, the aggregate cost of securities for federal income tax purposes was $259,620,148. (b) Non-income producing. (c) A common stock is considered to be foreign if the security is issued in a foreign country. The country of risk, noted parenthetically, is determined based on criteria described in Note 2G "Foreign security country determination" in the Notes to Financial Statements. (d) The rate shown is the discount rate. 10 See Notes to Financial Statements PHOENIX MID-CAP VALUE FUND STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2006 ASSETS Investment securities at value (Identified cost $259,519,245) $ 286,499,885 Cash 2,283 Receivables Fund shares sold 1,980,496 Investment securities sold 1,948,494 Dividends 210,749 Prepaid expenses 28,596 -------------- Total assets 290,670,503 -------------- LIABILITIES Payables Investment securities purchased 2,069,732 Fund shares repurchased 562,490 Distribution and service fees 117,439 Transfer agent fee 81,687 Investment advisory fee 68,588 Financial agent fee 16,880 Trustees' fee 4,159 Other accrued expenses 61,467 -------------- Total liabilities 2,982,442 -------------- NET ASSETS $ 287,688,061 ============== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $ 259,356,596 Undistributed net investment income 237,042 Accumulated net realized gain 1,113,783 Net unrealized appreciation 26,980,640 -------------- NET ASSETS $ 287,688,061 ============== CLASS A Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $187,701,221) 8,640,210 Net asset value per share $21.72 Offering price per share $21.72/(1-5.75%) $23.05 CLASS C Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $99,986,840) 4,645,031 Net asset value and offering price per share $21.53 STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 2006 INVESTMENT INCOME Dividends $ 3,470,906 Interest 558,938 Foreign taxes withheld (11,709) -------------- Total investment income 4,018,135 -------------- EXPENSES Investment advisory fee 1,723,498 Service fees, Class A 380,931 Distribution and service fees, Class C 774,273 Financial agent fee 166,044 Transfer agent 486,079 Printing 121,542 Registration 66,990 Professional 35,449 Trustees 35,253 Custodian 23,868 Miscellaneous 27,444 -------------- Total expenses 3,841,371 Less expenses reimbursed by investment adviser (388,010) Custodian fees paid indirectly (160) -------------- Net expenses 3,453,201 -------------- NET INVESTMENT INCOME (LOSS) 564,934 -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments 1,458,273 Net change in unrealized appreciation (depreciation) on investments 23,007,018 -------------- NET GAIN (LOSS) ON INVESTMENTS 24,465,291 -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 25,030,225 ============== See Notes to Financial Statements 11 PHOENIX MID-CAP VALUE FUND STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended June 30, 2006 June 30, 2005 -------------- -------------- FROM OPERATIONS Net investment income (loss) $ 564,934 $ 153,913 Net realized gain (loss) 1,458,273 997,903 Net change in unrealized appreciation (depreciation) 23,007,018 2,676,643 -------------- -------------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 25,030,225 3,828,459 -------------- -------------- FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class A (415,642) (62,712) Net investment income, Class C -- (2,651) Net realized short-term gains, Class A (76,240) -- Net realized short-term gains, Class C (40,162) -- Net realized long-term gains, Class A (31,734) -- Net realized long-term gains, Class C (16,063) -- -------------- -------------- DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (579,841) (65,363) -------------- -------------- FROM SHARE TRANSACTIONS CLASS A Proceeds from sales of shares (6,998,576 and 5,675,016 shares, respectively) 141,436,426 108,216,121 Net asset value of shares issued from reinvestment of distributions (22,707 and 2,604 shares, respectively) 452,090 50,100 Cost of shares repurchased (3,362,794 and 1,071,683 shares, respectively) (68,023,003) (20,198,444) -------------- -------------- Total 73,865,513 88,067,777 -------------- -------------- CLASS C Proceeds from sales of shares (3,238,196 and 1,962,426 shares, respectively) 64,677,062 37,882,372 Net asset value of shares issued from reinvestment of distributions (1,826 and 90 shares, respectively) 36,147 1,724 Cost of shares repurchased (536,202 and 21,305 shares, respectively) (11,045,380) (414,196) -------------- -------------- Total 53,667,829 37,469,900 -------------- -------------- INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 127,533,342 125,537,677 -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS 151,983,726 129,300,773 NET ASSETS Beginning of period 135,704,335 6,403,562 -------------- -------------- END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $237,042 AND $87,750, RESPECTIVELY) $ 287,688,061 $ 135,704,335 ============== ==============
12 See Notes to Financial Statements PHOENIX MID-CAP VALUE FUND FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A(1) -------------------------------------------------------------------------- Year Ended June 30, -------------------------------------------------------------------------- 2006 2005 2004 2003 2002 Net asset value, beginning of period $ 19.63 $ 17.04 $ 12.18 $ 13.21 $ 12.15 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(2) 0.10 0.08 (0.01) 0.01 (0.01) Net realized and unrealized gain (loss) 2.05 2.55 4.88 (1.04) 1.09 ----------- ----------- ----------- ----------- ----------- TOTAL FROM INVESTMENT OPERATIONS 2.15 2.63 4.87 (1.03) 1.08 ----------- ----------- ----------- ----------- ----------- LESS DISTRIBUTIONS Dividends from net investment income (0.05) (0.04) (0.01) -- (0.02) Distributions from net realized gains (0.01) -- -- -- -- ----------- ----------- ----------- ----------- ----------- TOTAL DISTRIBUTIONS (0.06) (0.04) (0.01) -- (0.02) ----------- ----------- ----------- ----------- ----------- Change in net asset value 2.09 2.59 4.86 (1.03) 1.06 ----------- ----------- ----------- ----------- ----------- NET ASSET VALUE, END OF PERIOD $ 21.72 $ 19.63 $ 17.04 $ 12.18 $ 13.21 =========== =========== =========== =========== =========== Total return(3) 11.07% 15.39% 40.03 % (7.80)% 8.89 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 187,701 $ 97,771 $ 6,404 $ 3,800 $ 5,240 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.25% 1.25% 1.30 % 1.30 % 1.30 % Gross operating expenses 1.42% 1.65% 2.76 % 3.05 % 2.68 % Net investment income (loss) 0.50% 0.49% (0.06)% 0.09 % (0.05)% Portfolio turnover 16% 9% 53 % 23 % 49 %
CLASS C ----------------------------------- FROM INCEPTION YEAR ENDED OCTOBER 22, 2004 TO JUNE 30, 2006 JUNE 30, 2005 ----------------------------------- Net asset value, beginning of period $ 19.54 $ 17.77 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(2) (0.05) (0.04) Net realized and unrealized gain (loss) 2.05 1.84 ----------- ---------- TOTAL FROM INVESTMENT OPERATIONS 2.00 1.80 ----------- ---------- LESS DISTRIBUTIONS Dividends from net investment income -- (0.03) Distributions from net realized gains (0.01) -- ----------- ---------- TOTAL DISTRIBUTIONS (0.01) (0.03) ----------- ---------- Change in net asset value 1.99 1.77 ----------- ---------- NET ASSET VALUE, END OF PERIOD $ 21.53 $ 19.54 =========== ========== Total return(3) 10.26 % 10.13 %(5) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 99,987 $ 37,934 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.00 % 2.00 %(4) Gross operating expenses 2.17 % 2.29 %(4) Net investment income (loss) (0.25)% (0.28)%(4) Portfolio turnover 16 % 9 %(5)
(1) Due to a reorganization on October 22, 2004, the Mid-Cap Value Fund is the successor of the FMI Sasco Contrarian Value Fund. The Mid-Cap Value Fund Class A treats the past performance of the FMI Sasco Contrarian Value Fund as its own. (2) Computed using average shares outstanding. (3) Sales charges are not reflected in the total return calculation. (4) Annualized. (5) Not annualized. See Notes to Financial Statements 13 PHOENIX PATHFINDER FUND A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM Q: HOW DID THE PHOENIX PATHFINDER FUND PERFORM FOR ITS FISCAL YEAR ENDED JUNE 30, 2006? A: As the Fund's inception date was July 29, 2005, it did not achieve a full year of performance as of June 30, 2006. However, for the period of July 29, 2005 through June 30, 2006, the Fund's Class A shares returned 12.41%, and Class C shares returned 11.85%. For the same period, the S&P 500(R) Index, a broad-based equity index, returned 4.74%, and the Russell 1000(R) Index, the Fund's style-specific benchmark, returned 8.95%. All figures assume reinvestment of distributions and exclude the effect of sales charges. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND CURRENT RESULTS AND PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE. Q: HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? A: The U.S. stock market was one of the world's weaker asset classes over the period, generally trailing the equity returns of Asia and Europe. While returns were positive in an absolute sense, the equity market was clearly unsettled in the wake of the devastation wrought by Hurricane Katrina in the late summer of 2005. Concerns about energy prices and the potential softening of the U.S. housing market drove further caution and risk aversion among investors. The changeover in leadership at the Federal Reserve also troubled markets, especially as new Fed Chairman Ben Bernanke began his tenure with an aggressive anti-inflationary stance linked to a series of interest rate hikes. Continued bad news from Iraq, concerns about U.S. national debt, the U.S. dollar and the large current account deficit contributed to the cautious mood and helped precipitate a decline in the U.S. equity market in the final quarter of the Fund's fiscal year. Q: WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR? A: The Fund outperformed its benchmark by a significant margin over the period, largely as a result of stock selection. Stock selection was particularly strong in the materials sector, which benefited from record-high commodity prices and sustained global demand. Steel, mining and construction companies, including USG, Nucor and Phelps Dodge, were among the top-contributing holdings. The portfolio also benefited from strong stock selection in telecoms, services, health care and energy. The main sectors that underperformed in the portfolio were durables, technology and finance. A position in Allstate was not rewarded, and the portfolio also did not hold certain technology stocks that drove the benchmark index, such as Hewlett Packard. In terms of sector allocations, the portfolio's positions were the result of bottom-up stock selection. Overweightings in materials and telecoms stocks helped return, but these were offset by value lost from an overweighting in durables and an underweighting in consumer staples. Overall, sector weightings detracted a small amount of active return from the very strong, value-added stock selection. JULY 2006 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 WILL BE REALIZED. FOR DEFINITIONS OF INDEXES CITED AND CERTAIN INVESTMENT TERMS USED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 3. 14 PHOENIX PATHFINDER FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS 1 PERIOD ENDING 6/30/06 - -------------------------------------------------------------------------------- INCEPTION INCEPTION TO 6/30/06 DATE ---------- --------- Class A Shares at NAV 2 12.41% 7/29/05 Class A Shares at POP 3 5.94 7/29/05 Class C Shares at NAV 2 11.85 7/29/05 Class C Shares with CDSC 4 10.85 7/29/05 S&P 500(R) Index 4.74 7/29/05 Russell 1000(R) Value Index 8.95 7/29/05 ALL RETURNS REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE ABOVE TABLE AND GRAPH BELOW DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. PLEASE VISIT PHOENIXFUNDS.COM FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END. 1 TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. 2 "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 CLASS C SHARES THAT DO NOT HAVE A SALES CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER. - -------------------------------------------------------------------------------- GROWTH OF $10,000 PERIOD ENDING 6/30/06 - -------------------------------------------------------------------------------- This Growth of $10,000 chart assumes an initial investment of $10,000 made on 7/29/05 (inception of the Fund) in Class A shares. The total return for Class A shares reflects the maximum sales charge of 5.75% on the initial investment. The total return on Class C shares includes applicable CDSC charges since inception. Performance assumes dividends and capital gains are reinvested. [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Phoenix Pathfinder Phoenix Pathfinder S&P 500(R) Russell 1000(R) Fund Class A Fund Class C Index Value Index 07/29/2005 $ 9,425 $10,000 $10,000 $10,000 06/30/2006 10,594 11,085 10,474 10,895
For information regarding the indexes, see the glossary on page 3. 15 PHOENIX PATHFINDER FUND ABOUT YOUR FUND'S EXPENSES We believe it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder of the Pathfinder Fund, you incur two types of costs: (1) transaction costs, including sales charges on purchases of Class A shares and contingent deferred sales charges on Class C shares; and (2) ongoing costs, including investment advisory fees; distribution and service fees; and other expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The first two lines of these examples are based on an investment of $1,000 invested at the beginning of the period date and held to and held for the entire six-month period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second hypothetical example provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges or contingent deferred sales charges. Therefore, the hypothetical example of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If you have incurred transactional costs, your costs could have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Beginning Ending Expenses Paid Pathfinder Fund Account Value Account Value During Class A December 31, 2005 June 30, 2006 Period* - ----------------------- ----------------- ------------- ------------- Actual $1,000.00 $1,108.90 $7.31 Hypothetical (5% return before expenses) 1,000.00 1,017.78 7.02 * EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.40%, WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE. FOR THE ACTUAL AND HYPOTHETICAL EXAMPLE, THE EXPENSE RATIO IS MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED, THEN DIVIDED BY 365 TO REFLECT THE HALF-YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS A RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV SINCE INCEPTION WAS 12.41%. AN INVESTMENT OF $1,000.00 AT JULY 29, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,124.10. Beginning Ending Expenses Paid Pathfinder Fund Account Value Account Value During Class C December 31, 2005 June 30, 2006 Period* - ----------------------- ----------------- ------------- ------------- Actual $1,000.00 $1,106.90 $11.22 Hypothetical (5% return before expenses) 1,000.00 1,014.01 10.79 * EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.15%, WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE. FOR THE ACTUAL AND HYPOTHETICAL EXAMPLE, THE EXPENSE RATIO IS MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED, THEN DIVIDED BY 365 TO REFLECT THE HALF-YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS C RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV SINCE INCEPTION WAS 11.85%. AN INVESTMENT OF $1,000.00 AT JULY 29, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,118.50. YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING EXPENSES AND OTHER SHAREHOLDER COSTS REFER TO THE PROSPECTUS. 16 PHOENIX PATHFINDER FUND - -------------------------------------------------------------------------------- SECTOR WEIGHTINGS 6/30/06 - -------------------------------------------------------------------------------- As a percentage of total investments [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Financials 34% Energy 17 Industrials 11 Telecommunication Services 9 Consumer Discretionary 8 Information Technology 5 Materials 4 Other 12 SCHEDULE OF INVESTMENTS JUNE 30, 2006
SHARES VALUE ------------- -------------- DOMESTIC COMMON STOCKS--97.1% AEROSPACE & DEFENSE--2.4% Northrop Grumman Corp. ................................ 1,300 $ 83,278 AIRLINES--0.4% Continental Airlines, Inc. Class B(b) ................. 500 14,900 ASSET MANAGEMENT & CUSTODY BANKS--1.5% Franklin Resources, Inc. .............................. 600 52,086 BIOTECHNOLOGY--0.2% Gilead Sciences, Inc.(b) .............................. 62 3,668 ImClone Systems, Inc.(b) .............................. 100 3,864 -------------- 7,532 -------------- BROADCASTING & CABLE TV--2.6% DIRECTV Group, Inc. (The)(b) .......................... 5,500 90,750 COMPUTER STORAGE & PERIPHERALS--2.9% Lexmark International, Inc. Class A(b) ................ 1,800 100,494 CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS--5.0% Cummins, Inc. ......................................... 800 97,800 FreightCar America, Inc. .............................. 100 5,551 PACCAR, Inc. .......................................... 800 65,904 Terex Corp.(b) ........................................ 47 4,639 -------------- 173,894 -------------- CONSTRUCTION MATERIALS--0.7% Eagle Materials, Inc. ................................. 500 23,750 DEPARTMENT STORES--2.0% Dillard's, Inc. Class A ............................... 2,200 70,070 DISTRIBUTORS--0.8% Building Materials Holding Corp. ...................... 1,000 27,870 DIVERSIFIED BANKS--0.6% Wells Fargo & Co. ..................................... 300 20,124
SHARES VALUE ------------- -------------- DIVERSIFIED COMMERCIAL & PROFESSIONAL SERVICES--0.1% PHH Corp.(b) .......................................... 100 $ 2,754 DIVERSIFIED METALS & MINING--2.5% Phelps Dodge Corp. .................................... 1,080 88,733 ELECTRIC UTILITIES--2.5% Edison International .................................. 100 3,900 FirstEnergy Corp. ..................................... 1,547 83,863 -------------- 87,763 -------------- HEALTH CARE DISTRIBUTORS--1.8% AmerisourceBergen Corp. ............................... 1,500 62,880 HOME IMPROVEMENT RETAIL--1.3% Home Depot, Inc. (The) ................................ 100 3,579 Lowe's Cos., Inc. ..................................... 447 27,119 Sherwin-Williams Co. (The) ............................ 323 15,336 -------------- 46,034 -------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS--1.4% TXU Corp. ............................................. 818 48,908 INTEGRATED OIL & GAS--15.3% Chevron Corp. ......................................... 1,170 72,610 ConocoPhillips ........................................ 2,200 144,166 Exxon Mobil Corp. ..................................... 3,560 218,406 Hess Corp. ............................................ 600 31,710 Marathon Oil Corp. .................................... 800 66,640 -------------- 533,532 -------------- INTEGRATED TELECOMMUNICATION SERVICES--9.4% AT&T, Inc. ............................................ 4,000 111,560 BellSouth Corp. ....................................... 2,400 86,880 Qwest Communications International, Inc.(b) ........... 15,200 122,968 Talk America Holdings, Inc.(b) ........................ 600 3,714 -------------- 325,122 --------------
See Notes to Financial Statements 17 PHOENIX PATHFINDER FUND
SHARES VALUE ------------- -------------- INVESTMENT BANKING & BROKERAGE--6.9% Bear Stearns Cos., Inc. (The) ......................... 800 $ 112,064 Morgan Stanley ........................................ 2,000 126,420 -------------- 238,484 -------------- LIFE & HEALTH INSURANCE--3.3% Lincoln National Corp. ................................ 200 11,288 MetLife, Inc. ......................................... 1,572 80,502 Prudential Financial, Inc. ............................ 200 15,540 Torchmark Corp. ....................................... 125 7,590 -------------- 114,920 -------------- MULTI-LINE INSURANCE--5.7% Assurant, Inc. ........................................ 1,800 87,120 Genworth Financial, Inc. Class A ...................... 100 3,484 Hartford Financial Services Group, Inc. (The) ......... 1,254 106,089 -------------- 196,693 -------------- OIL & GAS DRILLING--0.8% Patterson-UTI Energy, Inc. ............................ 1,000 28,310 OIL & GAS REFINING & MARKETING--1.1% Valero Energy Corp. ................................... 569 37,850 OTHER DIVERSIFIED FINANCIAL SERVICES--3.7% Bank of America Corp. ................................. 2,657 127,802 PACKAGED FOODS & MEATS--0.1% Gold Kist, Inc.(b) .................................... 163 2,179 PHARMACEUTICALS--1.0% Alpharma, Inc. Class A ................................ 800 19,232 King Pharmaceuticals, Inc.(b) ......................... 900 15,300 -------------- 34,532 -------------- PROPERTY & CASUALTY INSURANCE--8.6% Allstate Corp. (The) .................................. 400 21,892 Berkley (W.R.) Corp. .................................. 100 3,413 Chubb Corp. (The) ..................................... 2,200 109,780 CNA Financial Corp.(b) ................................ 1,500 49,440 First American Corp. .................................. 200 8,454 Progressive Corp. (The) ............................... 68 1,748 St. Paul Travelers Cos., Inc. (The) ................... 2,300 102,534 -------------- 297,261 -------------- RAILROADS--2.8% CSX Corp. ............................................. 1,400 98,616 REGIONAL BANKS--4.0% PNC Financial Services Group, Inc. (The) .............. 1,200 84,204 SunTrust Banks, Inc. .................................. 700 53,382 -------------- 137,586 --------------
SHARES VALUE ------------- -------------- SEMICONDUCTORS--1.7% Texas Instruments, Inc. ............................... 2,000 $ 60,580 SPECIALIZED CONSUMER SERVICES--0.9% Jackson Hewitt Tax Service, Inc. ...................... 1,000 31,350 STEEL--1.1% Nucor Corp. ........................................... 45 2,441 Reliance Steel & Aluminum Co. ......................... 200 16,590 United States Steel Corp. ............................. 300 21,036 -------------- 40,067 -------------- TOBACCO--2.0% Reynolds American, Inc. ............................... 600 69,180 - ---------------------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $3,121,973) 3,375,884 - ---------------------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--97.1% (IDENTIFIED COST $3,121,973) 3,375,884 - ----------------------------------------------------------------------------------------
PAR VALUE (000) ------------- SHORT-TERM INVESTMENTS--3.2% COMMERCIAL PAPER(c)--3.2% Merrill Lynch & Co., Inc. 5.32%, 7/3/06 ............... $ 110 109,967 - ---------------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $109,967) 109,967 - ---------------------------------------------------------------------------------------- TOTAL INVESTMENTS--100.3% (IDENTIFIED COST $3,231,940) 3,485,851(a) Other assets and liabilities, net--(0.3)% (10,613) -------------- NET ASSETS--100.0% $ 3,475,238 ==============
(a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $283,078 and gross depreciation of $29,167 for federal income tax purposes. At June 30, 2006, the aggregate cost of securities for federal income tax purposes was $3,231,940. (b) Non-income producing. (c) The rate shown is the discount rate. 18 See Notes to Financial Statements PHOENIX PATHFINDER FUND STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2006 ASSETS Investment securities at value (Identified cost $3,231,940) $ 3,485,851 Cash 965 Receivables Dividends 3,242 Receivable from adviser 2,864 Prepaid expenses 8,776 -------------- Total assets 3,501,698 -------------- LIABILITIES Payables Professional fee 18,341 Transfer agent fee 5,981 Financial agent fee 709 Distribution and service fees 782 Trustees' fee 27 Other accrued expenses 620 -------------- Total liabilities 26,460 -------------- NET ASSETS $ 3,475,238 ============== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $ 3,143,153 Undistributed net investment income 8,244 Accumulated net realized gain 69,930 Net unrealized appreciation 253,911 -------------- NET ASSETS $ 3,475,238 ============== CLASS A Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $3,291,934) 293,846 Net asset value per share $11.20 Offering price per share $11.20/(1-5.75%) $11.88 CLASS C Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $183,304) 16,395 Net asset value and offering price per share $11.18 STATEMENT OF OPERATIONS FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 INVESTMENT INCOME Dividends $ 49,073 Interest 1,858 -------------- Total investment income 50,931 -------------- EXPENSES Investment advisory fee 19,190 Service fees, Class A 5,700 Distribution and service fees, Class C 1,189 Financial agent fee 28,233 Transfer agent 34,415 Registration 28,062 Professional 24,093 Trustees 22,864 Custodian 4,328 Printing 3,535 Miscellaneous 9,190 -------------- Total expenses 180,799 Less expenses reimbursed by investment adviser (145,079) Custodian fees paid indirectly (1,245) -------------- Net expenses 34,475 -------------- NET INVESTMENT INCOME (LOSS) 16,456 -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments 69,930 Net change in unrealized appreciation (depreciation) on investments 253,911 -------------- NET GAIN (LOSS) ON INVESTMENTS 323,841 -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 340,297 ============== See Notes to Financial Statements 19 PHOENIX PATHFINDER FUND STATEMENT OF CHANGES IN NET ASSETS
From Inception July 29, 2005 to June 30, 2006 ---------------- FROM OPERATIONS Net investment income (loss) $ 16,456 Net realized gain (loss) 69,930 Net change in unrealized appreciation (depreciation) 253,911 ------------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 340,297 ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class A (8,152) Net investment income, Class C (60) ------------- DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (8,212) ------------- FROM SHARE TRANSACTIONS CLASS A Proceeds from sales of shares (293,055 shares) 2,966,358 Net asset value of shares issued from reinvestment of distributions (797 shares) 8,152 Cost of shares repurchased (6 shares) (66) ------------- Total 2,974,444 ------------- CLASS C Proceeds from sales of shares (16,395 shares) 168,719 Net asset value of shares issued from reinvestment of distributions (6 shares) 60 Cost of shares repurchased (6 shares) (70) ------------- Total 168,709 ------------- INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 3,143,153 ------------- NET INCREASE (DECREASE) IN NET ASSETS 3,475,238 NET ASSETS Beginning of period -- ------------- END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $8,244) $ 3,475,238 =============
20 See Notes to Financial Statements PHOENIX PATHFINDER FUND FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A ----------------- FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 ----------------- Net asset value, beginning of period $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(2) 0.07 Net realized and unrealized gain (loss) 1.17 ---------- TOTAL FROM INVESTMENT OPERATIONS 1.24 ---------- LESS DISTRIBUTIONS Dividends from net investment income (0.04) ---------- TOTAL DISTRIBUTIONS (0.04) ---------- Change in net asset value 1.20 ---------- NET ASSET VALUE, END OF PERIOD $ 11.20 ========== Total return(1) 12.41%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 3,292 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.40%(3)(6) Gross operating expenses 7.45%(3) Net investment income (loss) 0.72%(3) Portfolio turnover 136%(4)
CLASS C ----------------- FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 ----------------- Net asset value, beginning of period $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(2) --(5) Net realized and unrealized gain (loss) 1.19 ---------- TOTAL FROM INVESTMENT OPERATIONS 1.19 ---------- LESS DISTRIBUTIONS Dividends from net investment income (0.01) ---------- TOTAL DISTRIBUTIONS (0.01) ---------- Change in net asset value 1.18 ---------- NET ASSET VALUE, END OF PERIOD $ 11.18 ========== Total return(1) 11.85 %(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 183 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.15 %(3)(6) Gross operating expenses 8.19 %(3) Net investment income (loss) (0.05)%(3) Portfolio turnover 136 %(4)
(1) Sales charges are not reflected in the total return calculation. (2) Computed using average shares outstanding. (3) Annualized. (4) Not annualized. (5) Amount is less than $0.01. (6) The ratio of net operating expenses to average net assets excludes the effect of expense offsets for custodian fees; if expense offsets were included, the ratio would have been 0.05% lower than the ratio shown in the table. See Notes to Financial Statements 21 PHOENIX RELATIVE VALUE FUND A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, GREG W. GOLDEN, CFA AND JEFF C. MOSER, CFA Q: HOW DID THE PHOENIX RELATIVE VALUE FUND PERFORM FOR ITS FISCAL YEAR ENDED JUNE 30, 2006? A: As the Fund's inception date was July 29, 2005, it did not achieve a full year of performance as of June 30, 2006. However, for the period of July 29, 2005 through June 30, 2006, the Fund's Class A shares returned 1.70%, and Class C shares returned 1.00%. For the same period, the S&P 500(R) Index, a broad-based equity index, returned 4.74%. All figures assume reinvestment of distributions and exclude the effect of sales charges. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND CURRENT RESULTS AND PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE. Q: HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? A: The economy and corporate earnings showed steady growth through the year. However, these positive fundamentals had to compete against an uncertain geopolitical climate, higher energy prices, and the Federal Reserve's decisions to raise rates to protect against inflation. While returns from the broad equity market were positive for the period, there were definitely differences within the various sectors that comprise the U.S. marketplace. Sectors considered more `value and defensive,' such as materials, industrials, energy and financials, delivered the highest returns. Growth related sectors, such as technology and health care, did not perform as well. Q: WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR? A: Within the Fund, we increased our exposure to certain technology companies we feel represent good value with improving earnings potential. However, since returns for the technology group lagged the overall market, our increased exposure hurt overall performance. Conversely, our lower exposure to energy, one of the best performing groups during the period, which was not as high as the overall market, detracted from performance. Several of the better performing securities during the period came from the industrials sector. Cooper Industries, United Technologies, and Eaton Corp. each showed strong gains as investors remained upbeat on "heavy cyclicals." On the other hand, technology holdings National Semiconductor and Intel were among the worst performers as investors favored current growth over projected growth. JULY 2006 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 WILL BE REALIZED. FOR DEFINITIONS OF INDEXES CITED AND CERTAIN INVESTMENT TERMS USED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 3. 22 PHOENIX RELATIVE VALUE FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS 1 PERIOD ENDING 6/30/06 - -------------------------------------------------------------------------------- INCEPTION INCEPTION TO 6/30/06 DATE ---------- --------- Class A Shares at NAV 2 1.70% 7/29/05 Class A Shares at POP 3 (4.15) 7/29/05 Class C Shares at NAV 2 1.00 7/29/05 Class C Shares with CDSC 4 0.00 7/29/05 S&P 500(R) Index 4.74 7/29/05 ALL RETURNS REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE ABOVE TABLE AND GRAPH BELOW DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. PLEASE VISIT PHOENIXFUNDS.COM FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END. 1 TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. 2 "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 CLASS C SHARES THAT DO NOT HAVE A SALES CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER. - -------------------------------------------------------------------------------- GROWTH OF $10,000 PERIOD ENDING 6/30/06 - -------------------------------------------------------------------------------- This Growth of $10,000 chart assumes an initial investment of $10,000 made on 7/29/05 (inception of the Fund) in Class A shares. The total return for Class A shares reflects the maximum sales charge of 5.75% on the initial investment. The total return on Class C shares includes applicable CDSC charges since inception. Performance assumes dividends and capital gain distributions are reinvested. [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Phoenix Relative Value Fund Class A Phoenix Relative Value Fund Class C S&P 500(R) Index 07/29/2005 $9,425 $10,000 $10,000 06/30/2006 9,585 10,000 10,474
For information regarding the indexes, see the glossary on page 3. 23 PHOENIX RELATIVE VALUE FUND ABOUT YOUR FUND'S EXPENSES We believe it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder of the Relative Value Fund, you incur two types of costs: (1) transaction costs, including sales charges on purchases of Class A shares and contingent deferred sales charges on Class C shares; and (2) ongoing costs, including investment advisory fees; distribution and service fees; and other expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The first two lines of these examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second hypothetical example provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges or contingent deferred sales charges. Therefore, the hypothetical example of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If you have incurred transactional costs, your costs could have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Beginning Ending Expenses Paid Relative Value Fund Account Value Account Value During Class A December 31, 2005 June 30, 2006 Period* - ----------------------- ----------------- ------------- ------------- Actual $1,000.00 $1,010.90 $6.98 Hypothetical (5% return before expenses) 1,000.00 1,017.77 7.03 * EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.40%, WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED, THEN DIVIDED BY 365 TO REFLECT THE HALF-YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS A RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV SINCE INCEPTION WAS 1.70%. AN INVESTMENT OF $1,000.00 AT JULY 29, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,017.00. Beginning Ending Expenses Paid Relative Value Fund Account Value Account Value During Class C December 31, 2005 June 30, 2006 Period* - ----------------------- ----------------- ------------- ------------- Actual $1,000.00 $1,006.00 $10.70 Hypothetical (5% return before expenses) 1,000.00 1,014.00 10.80 * EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.15%, WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED, THEN DIVIDED BY 365 TO REFLECT THE HALF-YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS C RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV SINCE INCEPTION WAS 1.00%. AN INVESTMENT OF $1,000.00 AT JULY 29, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,010.00. YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING EXPENSES AND OTHER SHAREHOLDER COSTS REFER TO THE PROSPECTUS. 24 PHOENIX RELATIVE VALUE FUND - -------------------------------------------------------------------------------- SECTOR WEIGHTINGS 6/30/06 - -------------------------------------------------------------------------------- As a percentage of total investments [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Financials 25% Information Technology 18 Industrials 13 Energy 10 Health Care 10 Consumer Discretionary 10 Consumer Staples 6 Other 8 SCHEDULE OF INVESTMENTS JUNE 30, 2006
SHARES VALUE ------------- -------------- DOMESTIC COMMON STOCKS--95.1% AEROSPACE & DEFENSE--2.2% United Technologies Corp. ............................. 840 $ 53,273 AIR FREIGHT & LOGISTICS--2.2% FedEx Corp. ........................................... 450 52,587 ASSET MANAGEMENT & CUSTODY BANKS--3.9% Mellon Financial Corp. ................................ 1,320 45,448 Northern Trust Corp. .................................. 850 47,005 -------------- 92,453 -------------- COMMUNICATIONS EQUIPMENT--1.8% Motorola, Inc. ........................................ 2,190 44,128 COMPUTER HARDWARE--4.0% Hewlett-Packard Co. ................................... 1,570 49,738 International Business Machines Corp. ................. 600 46,092 -------------- 95,830 -------------- DATA PROCESSING & OUTSOURCED SERVICES--1.8% Computer Sciences Corp.(b) ............................ 870 42,143 DEPARTMENT STORES--1.9% Nordstrom, Inc. ....................................... 1,230 44,895 DIVERSIFIED BANKS--1.8% Comerica, Inc. ........................................ 830 43,152 ELECTRICAL COMPONENTS & EQUIPMENT--2.1% Cooper Industries Ltd. Class A ........................ 540 50,177 FOOTWEAR--1.9% Nike, Inc. Class B .................................... 560 45,360 HEALTH CARE EQUIPMENT--2.0% Becton, Dickinson & Co. ............................... 800 48,904 HOUSEHOLD APPLIANCES--1.9% Black & Decker Corp. (The) ............................ 550 46,453
SHARES VALUE ------------- -------------- HOUSEHOLD PRODUCTS--4.0% Clorox Co. (The) ...................................... 750 $ 45,727 Procter & Gamble Co. (The) ............................ 880 48,928 -------------- 94,655 -------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS--2.0% AES Corp. (The)(b) .................................... 2,590 47,785 INDUSTRIAL CONGLOMERATES--2.0% 3M Co. ................................................ 580 46,847 INDUSTRIAL GASES--2.0% Praxair, Inc. ......................................... 890 48,060 INDUSTRIAL MACHINERY--4.3% Eaton Corp. ........................................... 740 55,796 Illinois Tool Works, Inc. ............................. 1,000 47,500 -------------- 103,296 -------------- INSURANCE BROKERS--1.9% AON Corp. ............................................. 1,330 46,311 INTEGRATED OIL & GAS--6.2% ConocoPhillips ........................................ 730 47,837 Exxon Mobil Corp. ..................................... 780 47,853 Occidental Petroleum Corp. ............................ 510 52,300 -------------- 147,990 -------------- INVESTMENT BANKING & BROKERAGE--5.8% Goldman Sachs Group, Inc. (The) ....................... 330 49,642 Lehman Brothers Holdings, Inc. ........................ 640 41,696 Merrill Lynch & Co., Inc. ............................. 670 46,605 -------------- 137,943 -------------- LIFE & HEALTH INSURANCE--3.8% Lincoln National Corp. ................................ 840 47,409 MetLife, Inc. ......................................... 870 44,553 -------------- 91,962 --------------
See Notes to Financial Statements 25 PHOENIX RELATIVE VALUE FUND
SHARES VALUE ------------- -------------- MANAGED HEALTH CARE--4.0% Aetna, Inc. ........................................... 1,170 $ 46,718 UnitedHealth Group, Inc. .............................. 1,070 47,915 -------------- 94,633 -------------- MOTORCYCLE MANUFACTURERS--2.2% Harley-Davidson, Inc. ................................. 950 52,145 OIL & GAS EQUIPMENT & SERVICES--4.0% BJ Services Co. ....................................... 1,320 49,183 Tidewater, Inc. ....................................... 925 45,510 -------------- 94,693 -------------- OTHER DIVERSIFIED FINANCIAL SERVICES--4.0% Bank of America Corp. ................................. 990 47,619 JPMorgan Chase & Co. .................................. 1,150 48,300 -------------- 95,919 -------------- PACKAGED FOODS & MEATS--1.9% Kellogg Co. ........................................... 940 45,524 PHARMACEUTICALS--4.0% Johnson & Johnson ..................................... 830 49,734 Wyeth ................................................. 1,040 46,186 -------------- 95,920 -------------- PROPERTY & CASUALTY INSURANCE--2.2% Allstate Corp. (The) .................................. 950 51,993 SEMICONDUCTORS--5.5% Intel Corp. ........................................... 2,510 47,564 National Semiconductor Corp. .......................... 1,650 39,353 Texas Instruments, Inc. ............................... 1,440 43,618 -------------- 130,535 -------------- SPECIALTY STORES--2.0% Office Depot, Inc.(b) ................................. 1,270 48,260 STEEL--1.9% Nucor Corp. ........................................... 840 45,570 SYSTEMS SOFTWARE--2.0% Microsoft Corp. ....................................... 2,100 48,930 WIRELESS TELECOMMUNICATION SERVICES--1.9% Sprint Nextel Corp. ................................... 2,232 44,618 - ---------------------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $2,213,038) 2,272,944 - ----------------------------------------------------------------------------------------
SHARES VALUE ------------- -------------- FOREIGN COMMON STOCKS(c)--4.2% APPLICATION SOFTWARE--2.4% Amdocs Ltd. (United States)(b) ........................ 1,550 $ 56,730 PROPERTY & CASUALTY INSURANCE--1.8% ACE Ltd. (United States) .............................. 850 43,001 - ---------------------------------------------------------------------------------------- TOTAL FOREIGN COMMON STOCKS (IDENTIFIED COST $85,081) 99,731 - ---------------------------------------------------------------------------------------- TOTAL INVESTMENTS--99.3% (IDENTIFIED COST $2,298,119) 2,372,675(a) Other assets and liabilities, net--0.7% 17,351 -------------- NET ASSETS--100.0% $ 2,390,026 ==============
(a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $154,263 and gross depreciation of $80,152 for federal income tax purposes. At June 30, 2006, the aggregate cost of securities for federal income tax purposes was $2,298,564. (b) Non-income producing. (c) A common stock is considered to be foreign if the security is issued in a foreign country. The country of risk, noted parenthetically, is determined based on criteria described in Note 2G "Foreign security country determination" in the Notes to Financial Statements. 26 See Notes to Financial Statements PHOENIX RELATIVE VALUE FUND STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2006 ASSETS Investment securities at value (Identified cost $2,298,119) $ 2,372,675 Cash 35,534 Receivables Investment securities sold 86,733 Dividends 3,047 Receivable from adviser 2,394 Prepaid expenses 9,059 -------------- Total assets 2,509,442 -------------- LIABILITIES Payables Investment securities purchased 93,637 Professional fee 18,340 Transfer agent fee 6,041 Financial agent fee 667 Distribution and service fees 647 Trustees' fee 19 Other accrued expenses 65 -------------- Total liabilities 119,416 -------------- NET ASSETS $ 2,390,026 ============== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $ 2,354,097 Undistributed net investment income 64 Accumulated net realized loss (38,691) Net unrealized appreciation 74,556 -------------- NET ASSETS $ 2,390,026 ============== CLASS A Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $2,124,045) 209,098 Net asset value per share $10.16 Offering price per share $10.16/(1-5.75%) $10.78 CLASS C Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $265,981) 26,334 Net asset value and offering price per share $10.10 STATEMENT OF OPERATIONS FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 INVESTMENT INCOME Dividends $ 32,783 Interest 587 -------------- Total investment income 33,370 -------------- EXPENSES Investment advisory fee 16,890 Service fees, Class A 4,707 Distribution and service fees, Class C 2,284 Financial agent fee 28,063 Transfer agent 34,551 Registration 27,859 Professional 24,091 Trustees 22,855 Printing 3,458 Custodian 3,183 Miscellaneous 8,383 -------------- Total expenses 176,324 Less expenses reimbursed by investment adviser (144,421) Custodian fees paid indirectly (631) -------------- Net expenses 31,272 -------------- NET INVESTMENT INCOME (LOSS) 2,098 -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments (38,691) Net change in unrealized appreciation (depreciation) on investments 74,556 -------------- NET GAIN (LOSS) ON INVESTMENTS 35,865 -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 37,963 ============== See Notes to Financial Statements 27 PHOENIX RELATIVE VALUE FUND STATEMENT OF CHANGES IN NET ASSETS
From Inception July 29, 2005 to June 30, 2006 ---------------- FROM OPERATIONS Net investment income (loss) $ 2,098 Net realized gain (loss) (38,691) Net change in unrealized appreciation (depreciation) 74,556 ------------ INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 37,963 ------------ FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class A (2,034) Net investment income, Class C -- ------------ DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (2,034) ------------ FROM SHARE TRANSACTIONS CLASS A Proceeds from sales of shares (211,254 shares) 2,113,113 Net asset value of shares issued from reinvestment of distributions (196 shares) 1,990 Cost of shares repurchased (2,352 shares) (23,823) ------------ TOTAL 2,091,280 ------------ CLASS C Proceeds from sales of shares (32,774 shares) 327,444 Net asset value of shares issued from reinvestment of distributions (0 shares) -- Cost of shares repurchased (6,440 shares) (64,627) ------------ Total 262,817 ------------ INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 2,354,097 ------------ NET INCREASE (DECREASE) IN NET ASSETS 2,390,026 NET ASSETS Beginning of period -- ------------ END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $64) $ 2,390,026 ============
28 See Notes to Financial Statements PHOENIX RELATIVE VALUE FUND FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A ---------------- FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 ---------------- Net asset value, beginning of period $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(2) 0.02 Net realized and unrealized gain (loss) 0.15 ---------- TOTAL FROM INVESTMENT OPERATIONS 0.17 ---------- LESS DISTRIBUTIONS Dividends from net investment income (0.01) ---------- TOTAL DISTRIBUTIONS (0.01) ---------- Change in net asset value 0.16 ---------- NET ASSET VALUE, END OF PERIOD $ 10.16 ========== Total return(1) 1.70%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 2,124 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.40%(3)(5) Gross operating expenses 8.25%(3) Net investment income (loss) 0.18%(3) Portfolio turnover 34%(4)
CLASS C --------------- FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 --------------- Net asset value, beginning of period $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(2) (0.05) Net realized and unrealized gain (loss) 0.15 ---------- TOTAL FROM INVESTMENT OPERATIONS 0.10 ---------- LESS DISTRIBUTIONS Dividends from net investment income -- ---------- TOTAL DISTRIBUTIONS -- ---------- Change in net asset value 0.10 ---------- NET ASSET VALUE, END OF PERIOD $ 10.10 ========== Total return(1) 1.00 %(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 266 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.15 %(3)(5) Gross operating expenses 8.92 %(3) Net investment income (loss) (0.59)%(3) Portfolio turnover 34 %(4)
(1) Sales charges are not reflected in the total return calculation. (2) Computed using average shares outstanding. (3) Annualized. (4) Not annualized. (5) The ratio of net operating expenses to average net assets excludes the effect of expense offsets for custodian fees; if expense offsets were included, the ratio would have been 0.03% lower than the ratio shown in the table. See Notes to Financial Statements 29 PHOENIX TOTAL VALUE FUND THE FOLLOWING COMMENTARY PROVIDES THE VIEWS OF THE FUND'S THREE SUBADVISERS, ACADIAN, GOLDEN AND HARRIS, ON THE PERFORMANCE OF THE MARKET AND THE THIRD OF THE PORTFOLIO EACH MANAGES. Q: HOW DID THE PHOENIX TOTAL VALUE FUND PERFORM FOR ITS FISCAL YEAR ENDED JUNE 30, 2006? A: As the Fund's inception date was July 29, 2005, it did not achieve a full year of performance as of June 30, 2006. However, for the period of July 29, 2005 through June 30, 2006, the Fund's Class A shares returned 8.60%, and Class C shares returned 7.90%. For the same period, the S&P 500(R) Index, a broad-based equity index, returned 4.74%, and the Russell 1000(R) Value Index, the Fund's style-specific benchmark, returned 8.95%. All figures assume reinvestment of distributions and exclude the effect of sales charges. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE PERFORMANCE AND CURRENT RESULTS AND PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE. Q: ACADIAN, HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? A: The U.S. stock market was one of the world's weaker asset classes over the period, generally trailing the equity returns of Asia and Europe. While returns were positive in an absolute sense, the equity market was clearly unsettled in the wake of the devastation wrought by Hurricane Katrina in the late summer of 2005. Concerns about energy prices and the potential softening of the U.S. housing market drove further caution and risk aversion among investors. The changeover in leadership at the Federal Reserve also troubled markets, especially as new Fed Chairman Ben Bernanke began his tenure with an aggressive anti-inflationary stance linked to a series of interest rate hikes. Continued bad news from Iraq, concerns about U.S. national debt, the U.S. dollar and the large current account deficit contributed to the cautious mood and helped precipitate a decline in the U.S. equity market in the final quarter of the Fund's fiscal year. Q: GOLDEN, WHAT IS YOUR VIEW OF EQUITY MARKET PERFORMANCE FOR THE REPORTING PERIOD? A: The economy and corporate earnings showed steady growth through the year. However, these positive fundamentals had to compete against an uncertain geopolitical climate, higher energy prices, and the Federal Reserve's decisions to raise rates to protect against inflation. While returns from the broad equity market were positive for the period, there were definitely differences within the various sectors that comprise the U.S. marketplace. Sectors considered more `value and defensive,' such as materials, industrials, energy and financials, delivered the highest returns. Growth related sectors, such as technology and health care, did not perform as well. Q: HARRIS, HOW DO YOU ASSESS PERFORMANCE OF THE EQUITY MARKETS FOR THE FISCAL YEAR? A: During the Fund's fiscal year, the markets absorbed higher interest rates, a disagreeable mixture of hurricanes, energy price increases and a flattening yield curve. Overall, the markets, as measured by the Russell 1000 Value benchmark, did manage to generate positive returns for the period due to corporate profits and a resilient U.S. consumer. However, confusion about the economic outlook for the U.S. remained as investors coped with concerns about a global economic slowdown and continued central bank tightening around the world. In addition, geopolitical tensions in the Middle East, growing consumption by emerging market economies and increased speculative buying of commodities sent commodity prices soaring to near-term record levels during the latter part of the period only to weaken as the period closed. The U.S. Federal Reserve continued to raise interest rates (17 consecutive rate hikes) as concerns over inflation continued. Signs 30 PHOENIX TOTAL VALUE FUND (CONTINUED) that interest rate hikes are having an impact began to emerge and the economy showed signs of fatigue as the booming housing market softened and higher energy costs reduced consumer spending. Business investments picked up, in aggregate, making up for some of the slack from a retrenching consumer. Corporate operating earnings, as measured by the S&P 500 Index, averaged in the mid-teens for the period, in aggregate, modestly beating expectations. Even with positive economic growth and inflation under control, many companies were challenged to bring these favorable conditions to their bottom lines, except for the energy sector which experienced outsized growth. Overall, the U.S. and global economic growth remained firmly in positive territory for the year. Q: ACADIAN, WHAT FACTORS AFFECTED YOUR PERFORMANCE DURING THE FUND'S FISCAL YEAR? A: The Fund outperformed the benchmark S&P 500 Index by a significant margin over the period, largely as a result of stock selection. In the portion of the portfolio we manage, stock selection was particularly strong in the materials sector, which benefited from record-high commodity prices and sustained global demand. Steel, mining and construction companies, including USG, Nucor and Phelps Dodge, were among the top-contributing holdings. The portfolio also benefited from strong stock selection in telecoms, services, capital equipment, utilities and energy. The main sectors that underperformed in the portfolio were durables, technology and finance. A position in Allstate was not rewarded, and the portfolio also did not hold certain technology stocks that drove the benchmark index, such as Hewlett Packard. In terms of sector allocations, the portfolio's positions were the result of bottom-up stock selection. Overweightings in materials and telecoms stocks helped return, but these were offset by value lost from the overweighting in energy. Overall, sector weightings detracted a small amount of active return from the very strong, value-added stock selection. Q: GOLDEN, WHAT FACTORS AFFECTED YOUR PERFORMANCE DURING THE FUND'S FISCAL YEAR? A: In our portion of the portfolio, we increased our exposure to certain technology companies we felt represented good value with improving earnings potential. However, since returns for the technology group lagged the overall market, the increased exposure hurt overall performance. Conversely, our lower exposure to energy, one of the best performing groups during the period, which was not as high as the overall market, detracted from performance. Several of the better performing securities during the period came from the industrials sector. Cooper Industries, United Technologies, and Eaton Corp. each showed strong gains as investors remained upbeat on "heavy cyclicals." On the other hand, technology holdings National Semiconductor and Intel were among the worst performers as investors favored current growth over projected growth. Q: HARRIS, WHAT FACTORS AFFECTED YOUR PERFORMANCE DURING THE FUND'S FISCAL YEAR? A: After generating promising performance during the period, equity performance weakened as the period ended, and value style benchmarks continued to outperform growth style benchmarks. The portfolio's performance can be attributed to a combination of strong individual stock selection and, to a lesser extent, sector allocation, which modestly detracted from results. 31 PHOENIX TOTAL VALUE FUND (CONTINUED) Sectors that added the most to our performance were energy, materials, utilities, consumer staples and financials. Stocks that contributed the most to performance were Marathon Oil, W.R. Berkley, Valero Energy, Western Digital and Hewlett Packard. Sectors that detracted the most from our performance were health care, telecommunications and industrials. Stocks that detracted from performance included Sprint Nextel, Moody's, Cendant, NiSource and ServiceMaster. JULY 2006 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 WILL BE REALIZED. FOR DEFINITIONS OF INDEXES CITED AND CERTAIN INVESTMENT TERMS USED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 3. 32 PHOENIX TOTAL VALUE FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS 1 PERIOD ENDING 6/30/06 - -------------------------------------------------------------------------------- INCEPTION INCEPTION TO 6/30/06 DATE ---------- --------- Class A Shares at NAV 2 8.60% 7/29/05 Class A Shares at POP 3 2.36 7/29/05 Class C Shares at NAV 2 7.90 7/29/05 Class C Shares with CDSC 4 6.90 7/29/05 S&P 500(R) Index 4.74 7/29/05 Russell 1000(R) Value Index 8.95 7/29/05 ALL RETURNS REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE ABOVE TABLE AND GRAPH BELOW DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. PLEASE VISIT PHOENIXFUNDS.COM FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END. 1 TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. 2 "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 CLASS C SHARES THAT DO NOT HAVE A SALES CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER. - -------------------------------------------------------------------------------- GROWTH OF $10,000 PERIOD ENDING 6/30/06 - -------------------------------------------------------------------------------- This Growth of $10,000 chart assumes an initial investment of $10,000 made on 7/29/05 (inception of the Fund) in Class A shares. The total return for Class A shares reflects the maximum sales charge of 5.75% on the initial investment. The total return on Class C shares includes applicable CDSC charges since inception. Performance assumes dividends and capital gain distributions are reinvested. [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Phoenix Total Value Phoenix Total Value Russell 1000(R) S&P 500(R) Index Fund Class A Fund Class C Value Index Index 07/29/2005 $9,425 $10,000 $10,000 $10,000 06/30/2006 10,236 10,690 10,895 10,474
For information regarding the indexes, see the glossary on page 3. 33 PHOENIX TOTAL VALUE FUND ABOUT YOUR FUND'S EXPENSES We believe it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder of the Total Value Fund, you incur two types of costs: (1) transaction costs, including sales charges on purchases of Class A shares and contingent deferred sales charges on Class C shares; and (2) ongoing costs, including investment advisory fees; distribution and service fees; and other expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The first two lines of these examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second hypothetical example provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges or contingent deferred sales charges. Therefore, the hypothetical example of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If you have incurred transactional costs, your costs could have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Beginning Ending Expenses Paid Total Value Fund Account Value Account Value During Class A December 31, 2005 June 30, 2006 Period* - ----------------------- ----------------- ------------- ------------- Actual $1,000.00 $1,053.50 $7.12 Hypothetical (5% return before expenses) 1,000.00 1,017.78 7.02 * EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.40%, WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED, THEN DIVIDED BY 365 TO REFLECT THE HALF-YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS A RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV SINCE INCEPTION WAS 8.60%. AN INVESTMENT OF $1,000.00 AT JULY 29, 2005, WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,086.00. Beginning Ending Expenses Paid Total Value Fund Account Value Account Value During Class C December 31, 2005 June 30, 2006 Period* - ----------------------- ----------------- ------------- ------------- Actual $1,000.00 $1,049.60 $10.92 Hypothetical (5% return before expenses) 1,000.00 1,014.01 10.79 * EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.15%, WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED, THEN DIVIDED BY 365 TO REFLECT THE HALF-YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS C RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV SINCE INCEPTION WAS 7.90%. AN INVESTMENT OF $1,000.00 AT JULY 29, 2005, WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,079.00. YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING EXPENSES AND OTHER SHAREHOLDER COSTS REFER TO THE PROSPECTUS. 34 PHOENIX TOTAL VALUE FUND - -------------------------------------------------------------------------------- SECTOR WEIGHTINGS 6/30/06 - -------------------------------------------------------------------------------- As a percentage of total investments [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Financials 33% Energy 15 Industrials 10 Information Technology 10 Consumer Discretionary 7 Health Care 6 Materials 5 Other 14 SCHEDULE OF INVESTMENTS JUNE 30, 2006
SHARES VALUE ------------- -------------- DOMESTIC COMMON STOCKS--96.4% AEROSPACE & DEFENSE--1.2% General Dynamics Corp. ................................ 600 $ 39,276 Northrop Grumman Corp. ................................ 1,414 90,581 United Technologies Corp. ............................. 3,090 195,968 -------------- 325,825 -------------- AGRICULTURAL PRODUCTS--0.2% Archer-Daniels-Midland Co. ............................ 1,300 53,664 AIR FREIGHT & LOGISTICS--0.7% FedEx Corp. ........................................... 1,760 205,674 ASSET MANAGEMENT & CUSTODY BANKS--2.2% Franklin Resources, Inc. .............................. 1,100 95,491 Mellon Financial Corp. ................................ 5,080 174,904 Northern Trust Corp. .................................. 6,130 338,989 -------------- 609,384 -------------- AUTOMOTIVE RETAIL--0.2% AutoNation, Inc.(b) ................................... 2,800 60,032 BIOTECHNOLOGY--0.1% Amgen, Inc.(b) ........................................ 400 26,092 BROADCASTING & CABLE TV--1.0% CBS Corp. Class B ..................................... 1,500 40,575 DIRECTV Group, Inc. (The)(b) .......................... 15,100 249,150 -------------- 289,725 -------------- COAL & CONSUMABLE FUELS--0.2% Peabody Energy Corp. .................................. 1,200 66,900 COMMODITY CHEMICALS--0.3% Celanese Corp. Series A ............................... 4,500 91,890 COMMUNICATIONS EQUIPMENT--0.6% Motorola, Inc. ........................................ 8,230 165,834
SHARES VALUE ------------- -------------- COMPUTER HARDWARE--2.3% Hewlett-Packard Co. ................................... 15,090 $ 478,051 International Business Machines Corp. ................. 2,180 167,468 -------------- 645,519 -------------- COMPUTER STORAGE & PERIPHERALS--1.2% Komag, Inc.(b) ........................................ 1,100 50,798 Lexmark International, Inc. Class A(b) ................ 5,300 295,899 -------------- 346,697 -------------- CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS--2.0% Cummins, Inc. ......................................... 2,700 330,075 FreightCar America, Inc. .............................. 900 49,959 PACCAR, Inc. .......................................... 1,100 90,618 Terex Corp.(b) ........................................ 1,100 108,570 -------------- 579,222 -------------- CONSTRUCTION MATERIALS--0.1% Eagle Materials, Inc. ................................. 500 23,750 CONSUMER FINANCE--0.5% Capital One Financial Corp. ........................... 1,600 136,720 DATA PROCESSING & OUTSOURCED SERVICES--0.9% Computer Sciences Corp.(b) ............................ 5,450 263,998 DEPARTMENT STORES--0.9% Dillard's, Inc. Class A ............................... 2,900 92,365 Nordstrom, Inc. ....................................... 4,600 167,900 -------------- 260,265 -------------- DIVERSIFIED BANKS--2.6% Comerica, Inc. ........................................ 2,830 147,132 U.S. Bancorp .......................................... 9,900 305,712 Wachovia Corp. ........................................ 5,000 270,400 -------------- 723,244 --------------
See Notes to Financial Statements 35 PHOENIX TOTAL VALUE FUND
SHARES VALUE ------------- -------------- DIVERSIFIED COMMERCIAL & PROFESSIONAL SERVICES--0.3% Dun & Bradstreet Corp.(b) ............................. 850 $ 59,228 PHH Corp.(b) .......................................... 709 19,526 -------------- 78,754 -------------- DIVERSIFIED METALS & MINING--1.7% Freeport-McMoRan Copper & Gold, Inc. Class B (Indonesia) ................................... 1,400 77,574 Phelps Dodge Corp. .................................... 5,012 411,786 -------------- 489,360 -------------- ELECTRIC UTILITIES--0.8% FirstEnergy Corp. ..................................... 4,000 216,840 ELECTRICAL COMPONENTS & EQUIPMENT--0.7% Cooper Industries Ltd. Class A ........................ 2,100 195,132 ELECTRONIC MANUFACTURING SERVICES--0.3% Jabil Circuit, Inc. ................................... 3,100 79,360 ENVIRONMENTAL & FACILITIES SERVICES--1.0% Republic Services, Inc. ............................... 6,850 276,329 FOOD RETAIL--0.2% Safeway, Inc. ......................................... 2,100 54,600 FOOTWEAR--0.6% Nike, Inc. Class B .................................... 2,080 168,480 GAS UTILITIES--0.4% ONEOK, Inc. ........................................... 3,200 108,928 HEALTH CARE DISTRIBUTORS--0.7% AmerisourceBergen Corp. ............................... 4,800 201,216 HEALTH CARE EQUIPMENT--0.6% Becton, Dickinson & Co. ............................... 2,730 166,885 HEALTH CARE SERVICES--0.2% Caremark Rx, Inc. ..................................... 1,050 52,363 HOME IMPROVEMENT RETAIL--0.2% Sherwin-Williams Co. (The) ............................ 1,200 56,976 HOUSEHOLD APPLIANCES--0.6% Black & Decker Corp. (The) ............................ 2,010 169,765 HOUSEHOLD PRODUCTS--1.6% Clorox Co. (The) ...................................... 2,880 175,594 Colgate-Palmolive Co. ................................. 1,900 113,810 Procter & Gamble Co. (The) ............................ 2,930 162,908 -------------- 452,312 -------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS--1.9% AES Corp. (The)(b) .................................... 9,580 176,751 Mirant Corp.(b) ....................................... 5,000 134,000 TXU Corp. ............................................. 3,900 233,181 -------------- 543,932 --------------
SHARES VALUE ------------- -------------- INDUSTRIAL CONGLOMERATES--1.2% 3M Co. ................................................ 2,410 $ 194,656 General Electric Co. .................................. 4,150 136,784 -------------- 331,440 -------------- INDUSTRIAL GASES--0.7% Praxair, Inc. ......................................... 3,410 184,140 INDUSTRIAL MACHINERY--1.8% Eaton Corp. ........................................... 2,640 199,056 Illinois Tool Works, Inc. ............................. 3,600 171,000 Parker-Hannifin Corp. ................................. 1,900 147,440 -------------- 517,496 -------------- INSURANCE BROKERS--0.6% AON Corp. ............................................. 4,700 163,654 INTEGRATED OIL & GAS--11.7% Chevron Corp. ......................................... 4,661 289,262 ConocoPhillips ........................................ 16,032 1,050,577 Exxon Mobil Corp. ..................................... 17,217 1,056,263 Hess Corp. ............................................ 1,800 95,130 Marathon Oil Corp. .................................... 7,341 611,505 Occidental Petroleum Corp. ............................ 1,980 203,049 -------------- 3,305,786 -------------- INTEGRATED TELECOMMUNICATION SERVICES--3.4% AT&T, Inc. ............................................ 21,900 610,791 BellSouth Corp. ....................................... 3,400 123,080 Embarq Corp.(b) ....................................... 237 9,715 Qwest Communications International, Inc.(b) ........... 27,300 220,857 Talk America Holdings, Inc.(b) ........................ 600 3,714 -------------- 968,157 -------------- INVESTMENT BANKING & BROKERAGE--6.6% Bear Stearns Cos., Inc. (The) ......................... 2,300 322,184 Goldman Sachs Group, Inc. (The) ....................... 2,640 397,135 James (Raymond) Financial, Inc. ....................... 1,600 48,432 Lehman Brothers Holdings, Inc. ........................ 4,740 308,811 Merrill Lynch & Co., Inc. ............................. 2,390 166,248 Morgan Stanley ........................................ 6,100 385,581 Schwab (Charles) Corp. (The) .......................... 15,500 247,690 -------------- 1,876,081 -------------- LEISURE PRODUCTS--0.0% Mattel, Inc. .......................................... 300 4,953 LIFE & HEALTH INSURANCE--4.4% Conseco, Inc.(b) ...................................... 5,600 129,360 Lincoln National Corp. ................................ 3,250 183,430 MetLife, Inc. ......................................... 13,882 710,897 Principal Financial Group, Inc. (The) ................. 2,600 144,690 Prudential Financial, Inc. ............................ 900 69,930 -------------- 1,238,307 --------------
36 See Notes to Financial Statements PHOENIX TOTAL VALUE FUND
SHARES VALUE ------------- -------------- MANAGED HEALTH CARE--1.9% Aetna, Inc. ........................................... 3,720 $ 148,540 CIGNA Corp. ........................................... 750 73,882 Health Net, Inc.(b) ................................... 2,500 112,925 Humana, Inc.(b) ....................................... 1,000 53,700 UnitedHealth Group, Inc. .............................. 3,010 134,788 -------------- 523,835 -------------- MOTORCYCLE MANUFACTURERS--0.7% Harley-Davidson, Inc. ................................. 3,390 186,077 MOVIES & ENTERTAINMENT--0.2% Time Warner, Inc. ..................................... 2,700 46,710 MULTI-LINE INSURANCE--2.9% Assurant, Inc. ........................................ 7,500 363,000 Genworth Financial, Inc. Class A ...................... 3,550 123,682 Hartford Financial Services Group, Inc. (The) ......... 4,025 340,515 -------------- 827,197 -------------- MULTI-UTILITIES--1.3% Duke Energy Corp. ..................................... 2,500 73,425 PG&E Corp. ............................................ 3,850 151,228 Sempra Energy ......................................... 1,950 88,686 Xcel Energy, Inc. ..................................... 3,400 65,212 -------------- 378,551 -------------- OIL & GAS DRILLING--0.3% Patterson-UTI Energy, Inc. ............................ 2,900 82,099 OIL & GAS EQUIPMENT & SERVICES--1.2% BJ Services Co. ....................................... 4,890 182,201 Tidewater, Inc. ....................................... 3,330 163,836 -------------- 346,037 -------------- OIL & GAS REFINING & MARKETING--1.4% Sunoco, Inc. .......................................... 600 41,574 Tesoro Corp. .......................................... 1,700 126,412 Valero Energy Corp. ................................... 3,600 239,472 -------------- 407,458 -------------- OTHER DIVERSIFIED FINANCIAL SERVICES--5.0% Bank of America Corp. ................................. 19,806 952,669 Citigroup, Inc. ....................................... 3,700 178,488 JPMorgan Chase & Co. .................................. 6,800 285,600 -------------- 1,416,757 -------------- PACKAGED FOODS & MEATS--1.5% Campbell Soup Co. ..................................... 5,800 215,238 Kellogg Co. ........................................... 4,070 197,110 -------------- 412,348 -------------- PHARMACEUTICALS--2.6% Alpharma, Inc. Class A ................................ 100 2,404 Johnson & Johnson ..................................... 2,960 177,363
SHARES VALUE ------------- -------------- PHARMACEUTICALS--CONTINUED King Pharmaceuticals, Inc.(b) ......................... 9,290 $ 157,930 Pfizer, Inc. .......................................... 8,750 205,362 Wyeth ................................................. 4,450 197,625 -------------- 740,684 -------------- PROPERTY & CASUALTY INSURANCE--4.5% Allstate Corp. (The) .................................. 3,260 178,420 Axis Capital Holdings Ltd. ............................ 4,050 115,870 Berkley (W.R.) Corp. .................................. 7,125 243,176 Chubb Corp. (The) ..................................... 8,000 399,200 First American Corp. .................................. 2,300 97,221 St. Paul Travelers Cos., Inc. (The) ................... 5,679 253,170 -------------- 1,287,057 -------------- PUBLISHING & PRINTING--0.1% Donnelley (R.H.) Corp.(b) ............................. 700 37,849 RAILROADS--1.5% Burlington Northern Santa Fe Corp. .................... 1,500 118,875 CSX Corp. ............................................. 2,865 201,811 Norfolk Southern Corp. ................................ 1,100 58,542 Union Pacific Corp. ................................... 400 37,184 -------------- 416,412 -------------- REAL ESTATE MANAGEMENT & DEVELOPMENT--0.4% CB Richard Ellis Group, Inc. Class A(b) ............... 4,650 115,785 REGIONAL BANKS--1.9% AmSouth Bancorp ....................................... 1,200 31,740 Colonial BancGroup, Inc. (The) ........................ 4,500 115,560 KeyCorp ............................................... 700 24,976 PNC Financial Services Group, Inc. (The) .............. 3,800 266,646 Zions Bancorp ......................................... 1,400 109,116 -------------- 548,038 -------------- RESTAURANTS--0.8% Darden Restaurants, Inc. .............................. 4,950 195,030 Yum! Brands, Inc. ..................................... 850 42,729 -------------- 237,759 -------------- SEMICONDUCTORS--2.1% Intel Corp. ........................................... 8,310 157,474 National Semiconductor Corp. .......................... 6,290 150,017 Texas Instruments, Inc. ............................... 9,640 291,996 -------------- 599,487 -------------- SPECIALIZED CONSUMER SERVICES--0.2% Jackson Hewitt Tax Service, Inc. ...................... 1,500 47,025 SPECIALIZED FINANCE--0.2% Moody's Corp. ......................................... 1,300 70,798 SPECIALTY STORES--0.7% Office Depot, Inc.(b) ................................. 5,040 191,520
See Notes to Financial Statements 37 PHOENIX TOTAL VALUE FUND
SHARES VALUE ------------- -------------- STEEL--2.4% Nucor Corp. ........................................... 7,486 $ 406,115 Quanex Corp. .......................................... 750 32,303 Reliance Steel & Aluminum Co. ......................... 800 66,360 United States Steel Corp. ............................. 2,400 168,288 -------------- 673,066 -------------- SYSTEMS SOFTWARE--0.5% Microsoft Corp. ....................................... 6,530 152,149 TECHNOLOGY DISTRIBUTORS--0.8% Arrow Electronics, Inc.(b) ............................ 2,900 93,380 Ingram Micro, Inc. Class A(b) ......................... 7,700 139,601 -------------- 232,981 -------------- THRIFTS & MORTGAGE FINANCE--0.1% Corus Bankshares, Inc. ................................ 600 15,708 Radian Group, Inc. .................................... 300 18,534 -------------- 34,242 -------------- TOBACCO--0.8% Reynolds American, Inc. ............................... 2,000 230,600 TRUCKING--0.1% YRC Worldwide, Inc.(b) ................................ 800 33,688 WIRELESS TELECOMMUNICATION SERVICES--0.9% Sprint Nextel Corp. ................................... 12,360 247,076 - ---------------------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $25,646,290) 27,298,966 - ---------------------------------------------------------------------------------------- FOREIGN COMMON STOCKS(c)--2.4% APPLICATION SOFTWARE--0.7% Amdocs Ltd. (United States)(b) ........................ 5,320 194,712 AUTOMOBILE MANUFACTURERS--0.4% Honda Motor Co. Ltd. Sponsored ADR (Japan) ............ 3,700 117,734 CONSTRUCTION MATERIALS--0.2% CEMEX SA de CV (Mexico)(b) ............................ 823 46,867 IT CONSULTING & OTHER SERVICES--0.5% Accenture Ltd. Class A (United States) ................ 5,400 152,928 PROPERTY & CASUALTY INSURANCE--0.6% ACE Ltd. (United States) .............................. 3,320 167,959 - ---------------------------------------------------------------------------------------- TOTAL FOREIGN COMMON STOCKS (IDENTIFIED COST $632,482) 680,200 - ----------------------------------------------------------------------------------------
SHARES VALUE ------------- -------------- EXCHANGE TRADED FUNDS--0.1% iShares S&P 500 Index Fund ............................ 200 $ 25,510 - ---------------------------------------------------------------------------------------- TOTAL EXCHANGE TRADED FUNDS (IDENTIFIED COST $25,582) 25,510 - ---------------------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--98.9% (IDENTIFIED COST $26,304,354) 28,004,676 - ----------------------------------------------------------------------------------------
PAR VALUE (000) ------------- SHORT-TERM INVESTMENTS--1.2% COMMERCIAL PAPER(d)--1.2% Merrill Lynch & Co., Inc. 5.26%, 7/6/06 ............... $ 215 214,843 UBS Finance Delaware LLC 5.275%, 7/6/06 ............... 120 119,912 - ---------------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $334,755) 334,755 - ---------------------------------------------------------------------------------------- TOTAL INVESTMENTS--100.1% (IDENTIFIED COST $26,639,109) 28,339,431(a) Other assets and liabilities, net--(0.1)% (33,315) -------------- NET ASSETS--100.0% $ 28,306,116 ==============
(a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $2,287,606 and gross depreciation of $603,318 for federal income tax purposes. At June 30, 2006, the aggregate cost of securities for federal income tax purposes was $26,655,143. (b) Non-income producing. (c) A common stock is considered to be foreign if the security is issued in a foreign country. The country of risk, noted parenthetically, is determined based on criteria described in Note 2G "Foreign security country determination" in the Notes to Financial Statements. (d) The rate shown is the discount rate. 38 See Notes to Financial Statements PHOENIX TOTAL VALUE FUND STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2006 ASSETS Investment securities at value (Identified cost $26,639,109) $ 28,339,431 Receivables Investment securities sold 350,126 Fund shares sold 38,194 Dividends 34,909 Trustee retainer 5,186 Prepaid expenses 9,608 -------------- Total assets 28,777,454 -------------- LIABILITIES Cash overdraft 43,982 Payables Investment securities purchased 346,615 Fund shares repurchased 8,799 Investment advisory fee 24,283 Financial agent fee 7,170 Transfer agent fee 6,026 Distribution and service fees 5,913 Other accrued expenses 28,550 -------------- Total liabilities 471,338 -------------- NET ASSETS $ 28,306,116 ============== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $ 26,094,032 Undistributed net investment income 68,956 Accumulated net realized gain 442,806 Net unrealized appreciation 1,700,322 -------------- NET ASSETS $ 28,306,116 ============== CLASS A Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $27,923,655) 2,577,479 Net asset value per share $10.83 Offering price per share $10.83/(1-5.75%) $11.49 CLASS C Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $382,461) 35,443 Net asset value and offering price per share $10.79 STATEMENT OF OPERATIONS FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 INVESTMENT INCOME Dividends $ 473,813 Interest 20,281 -------------- Total investment income 494,094 -------------- EXPENSES Investment advisory fee 198,341 Service fees, Class A 61,198 Distribution and service fees, Class C 3,132 Financial agent fee 61,114 Transfer agent 34,660 Registration 30,512 Professional 28,034 Trustees 17,656 Custodian 14,522 Printing 6,523 Miscellaneous 11,697 -------------- Total expenses 467,389 Less expenses reimbursed by investment adviser (116,539) Custodian fees paid indirectly (1,404) -------------- Net expenses 349,446 -------------- NET INVESTMENT INCOME (LOSS) 144,648 -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments 442,806 Net change in unrealized appreciation (depreciation) on investments 1,700,322 -------------- NET GAIN (LOSS) ON INVESTMENTS 2,143,128 -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 2,287,776 ============== See Notes to Financial Statements 39 PHOENIX TOTAL VALUE FUND STATEMENT OF CHANGES IN NET ASSETS From Inception July 29, 2005 to June 30, 2006 ---------------- FROM OPERATIONS Net investment income (loss) $ 144,648 Net realized gain (loss) 442,806 Net change in unrealized appreciation (depreciation) 1,700,322 ------------ INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 2,287,776 ------------ FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class A (75,883) Net investment income, Class C -- ------------ DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (75,883) ------------ FROM SHARE TRANSACTIONS CLASS A Proceeds from sales of shares (2,902,312 shares) 29,100,309 Net asset value of shares issued from reinvestment of distributions (7,325 shares) 75,883 Cost of shares repurchased (332,158 shares) (3,439,374) ------------ Total 25,736,818 ------------ CLASS C Proceeds from sales of shares (35,757 shares) 360,698 Cost of shares repurchased (314 shares) (3,293) ------------ Total 357,405 ------------ INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 26,094,223 ------------ NET INCREASE (DECREASE) IN NET ASSETS 28,306,116 NET ASSETS Beginning of period -- ------------ END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $68,956) $ 28,306,116 ============ 40 See Notes to Financial Statements PHOENIX TOTAL VALUE FUND FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A --------------- FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 --------------- Net asset value, beginning of period $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(2) 0.06 Net realized and unrealized gain (loss) 0.80 ---------- TOTAL FROM INVESTMENT OPERATIONS 0.86 ---------- LESS DISTRIBUTIONS Dividends from net investment income (0.03) ---------- TOTAL DISTRIBUTIONS (0.03) ---------- Change in net asset value 0.83 ---------- NET ASSET VALUE, END OF PERIOD $ 10.83 ========== Total return(1) 8.60%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 27,924 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.40%(3)(5) Gross operating expenses 1.87%(3) Net investment income (loss) 0.59%(3) Portfolio turnover 76%(4)
CLASS C --------------- FROM INCEPTION JULY 29, 2005 TO JUNE 30, 2006 --------------- Net asset value, beginning of period $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(2) (0.01) Net realized and unrealized gain (loss) 0.80 ---------- TOTAL FROM INVESTMENT OPERATIONS 0.79 ---------- LESS DISTRIBUTIONS Dividends from net investment income -- ---------- TOTAL DISTRIBUTIONS -- ---------- Change in net asset value 0.79 ---------- NET ASSET VALUE, END OF PERIOD $ 10.79 ========== Total return(1) 7.90 %(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 382 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.15 %(3)(5) Gross operating expenses 2.62 %(3) Net investment income (loss) (0.15)%(3) Portfolio turnover 76 %(4)
(1) Sales charges are not reflected in the total return calculation. (2) Computed using average shares outstanding. (3) Annualized. (4) Not annualized. (5) The ratio of net operating expenses to average net assets excludes the effect of expense offsets for custodian fees; if expense offsets were included, the ratio would have been 0.04% lower than the ratio shown in the table. See Notes to Financial Statements 41 PHOENIX WORLDWIDE STRATEGIES FUND THE FOLLOWING COMMENTARY PROVIDES THE VIEWS OF THE FUND'S THREE SUBADVISERS ON THE PERFORMANCE OF THE MARKET AND THE THIRD OF THE PORTFOLIO EACH MANAGES. ACADIAN ASSET MANAGEMENT AND NEW STAR INSTITUTIONAL MANAGERS EACH DISCUSS INTERNATIONAL PERFORMANCE, WHILE ENGEMANN ASSET MANAGEMENT FOCUSES ON THE U.S. Q: HOW DID THE PHOENIX WORLDWIDE STRATEGIES FUND PERFORM DURING THE FISCAL YEAR ENDED JUNE 30, 2006? A: For the fiscal year ended June 30, 2006, the Fund's Class A shares returned 18.90%, Class B shares returned 17.92%, and Class C shares returned 17.99%. For the same period, the S&P 500(R) Index, a broad-based equity index, returned 8.63%; and MSCI World(SM) Index (Net), thE Fund's style-specific benchmark, returned 16.93%. All performance figures assume reinvestment of distributions and exclude the effect of sales charges. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE. Q: ACADIAN, HOW DID THE INTERNATIONAL EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? A: World markets showed notable strength during most of the fiscal year, yet suffered a setback in May and June as investors reacted to rising interest rates and other global concerns. European markets were up solidly through April as this region's growth outlook was largely positive during the period, despite political friction caused by the French and Dutch rejections of the European Union constitution and the less-than-decisive results of the German chancellor election. The encouraging economic outlook, coupled with continuing pressures on core inflation, prompted the European Central Bank to pursue a series of interest rates increases. Concerns about rates and inflation, along with speculation that much of the rosy outlook had already been factored into equity market returns, led to a sell-off of European equities in the spring. The Asia-Pacific region was the strongest in the developed world for much of the fiscal year. This result was fueled by Japan, which powered ahead as its economic recovery appeared to continue steadily, although it faltered in April and May as the pace of its recovery moderated to more sustainable levels. Also, Australia gained on the strength of its materials sector, the benefits of higher commodity prices, controlled inflation and healthy domestic demand. Based on economic fundamentals and despite recent market turmoil, the non-U.S. outlook continues to call for moderate growth, which should be supportive of equity market returns. Q: NEW STAR, HOW DID THE INTERNATIONAL EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? A: Markets rallied strongly during the period, climbing about 24% in local currency terms, or 27% in U.S. dollars. With abundant liquidity and a synchronized global economic upswing, analysts continued to revise their outlooks upwards for the second year running and riskier assets such as emerging markets and commodities performed well. With India and China also booming, industrials and mining stocks joined the party. Meanwhile, Japan has started to recover after over a decade in the doldrums. With such signs of recovery, the banking sector led the stock market soaring higher, and the MSCI Japan Index was the best performing of the developed markets. 42 PHOENIX WORLDWIDE STRATEGIES FUND (CONTINUED) Q: ENGEMANN, HOW DID THE U.S. EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? A: In the U.S. equities market, large capitalization stocks had positive, but not spectacular returns over the fiscal year. The S&P 500 Index posted an 8.63% total return. Value stocks continued their dominance over growth stocks, with the Russell 1000 Value Index returning 12.10% compared to 6.12% for the Russell 1000 Growth Index. Small company stocks beat large caps, with the Russell 2000 Index up by 14.58%. Commodities and real estate were strong performers: the Dow Jones Wilshire REIT Index was up 22.06% and the Dow Jones-AIG Commodity Index increased by 18.09%. Rising interest rates, oil prices and inflation were on the minds of U.S. investors. The Federal Open Market Committee raised the target federal funds rate to 5% over the course of the fiscal year ended June 30. Fed officials also commented that core inflation had risen slightly above their comfort zone. Energy prices rose, causing concern that high gasoline prices would cause a slowdown in consumer spending. Q: ACADIAN, WHAT FACTORS AFFECTED PERFORMANCE OF YOUR INTERNATIONAL PORTION OF THE FUND DURING ITS FISCAL YEAR? A: Our portion of the portfolio outperformed by a significant margin, largely as a result of stock selection. Stock selection was particularly strong in the United Kingdom, Australia and Germany, but also added value in the Netherlands, Singapore, Hong Kong and France. Health care, banking, materials, energy and finance stocks were among the top performers, which included such holdings as ING, AstraZeneca, Rinker Group, Standard Chartered Bank, and the German steel company Salzgitter. The main markets to see stock selection underperformance were Japan and Spain. Japanese stock selection trailed the index as the portfolio avoided holdings of some of the stronger benchmark stocks such as Toyota. Spain saw underperformance in its banking and energy holdings. In terms of country allocations, there was some value added from the allocation to Canada and certain emerging markets including Russia and China. However, this was offset by the negative return from the underweighting to Japan, a decision driven mainly by bottom-up stock selection. The allocation to Taiwan and overweighting in Spain also detracted some value. On a net basis country allocations were slightly negative for portfolio return, but stock selection was significantly strong and more than compensated. Q: NEW STAR, WHAT FACTORS AFFECTED PERFORMANCE OF YOUR INTERNATIONAL PORTION OF THE FUND DURING ITS FISCAL YEAR? A: We experienced a disappointing relative return that was a result of continuing underperformance of high quality, highly profitable, large capitalization companies which are favored in our strategy. This pattern of performance was fairly consistent across geographical regions, and stock selection was negative in Europe, the U.K. and especially Japan, with a positive contribution from Asia excluding Japan. The very modest exposure to select emerging markets was neutral to performance. Our bias to high return on invested capital (ROIC) companies was reflected in the sector overweightings to health care, information technology and selected financials and the underweighting of more cyclically sensitive sectors like materials, industrials and consumer discretionary. The underweighting in these cyclical areas, particularly materials, and the bias towards large cap stocks have been the principal drivers of the disappointing relative returns. 43 PHOENIX WORLDWIDE STRATEGIES FUND (CONTINUED) The large cap high ROIC stocks that we overweighted generally delivered good operating performances and equaled or beat analysts' earnings expectations. They were overshadowed, however, by continued strong operating performances from cyclical sectors such as energy. Among the cyclical sectors, we had an overweighting to energy where companies continued to deliver improving returns on capital and where we have more confidence in the pricing outlook. Our energy overweighting was a positive contributor to performance as was the overweighting in health care. At the same time, information technology and financials were detractors. Q: ENGEMANN, WHAT FACTORS AFFECTED YOUR PERFORMANCE OF THE U.S. PORTION OF THE PORTFOLIO YOU MANAGE DURING THE FUND'S FISCAL YEAR? A: The top contributors for the U.S. allocation of the portfolio were Manpower, Express Scripts and Alliance Data Systems. Manpower stock benefited from positive employment trends due to economic growth in Europe. Express Scripts, a pharmacy benefits manager, had strong results due to a wave of use of generic drugs. Alliance Data Systems, which provides transaction and credit services, performed well due to a high level of credit quality and a low level of delinquencies. The U.S. portfolio was most adversely affected by holdings in Spectrum Brands, Dell Computer and Intel. Spectrum Brands was hurt by a complex integration strategy, weak core businesses and tight debt covenant limitations. Dell Computer has suffered from aggressive promotional pricing and rebates, as well as losing market share to Hewlett Packard. Intel was pressured from declining earnings estimates due to weak pricing and overcapacity concerns. JULY 2006 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 WILL BE REALIZED. FOR DEFINITIONS OF INDEXES CITED AND CERTAIN INVESTMENT TERMS USED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 3. 44 PHOENIX WORLDWIDE STRATEGIES FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS 1 PERIODS ENDING 6/30/06 - --------------------------------------------------------------------------------
INCEPTION INCEPTION 1 YEAR 5 YEARS 10 YEARS TO 6/30/06 DATE ------- -------- -------- ---------- --------- Class A Shares at NAV 2 18.90% 5.40% 7.21% -- -- Class A Shares at POP 3 12.06 4.16 6.57 -- -- Class B Shares at NAV 2 17.92 4.63 6.40 -- -- Class B Shares with CDSC 4 13.92 4.63 6.40 -- -- Class C Shares at NAV 2 17.99 4.59 -- 3.62% 12/15/98 Class C Shares with CDSC 4 17.99 4.59 -- 3.62 12/15/98 S&P 500(R) Index 8.63 2.50 8.35 Note 5 Note 5 MSCI World(SM) Index (Net) 16.93 5.72 6.93 Note 6 Note 6
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE ABOVE TABLE AND GRAPH BELOW DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. PLEASE VISIT PHOENIXFUNDS.COM FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END. 1 TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. 2 "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 2.77% FOR CLASS C (SINCE 12/15/98). 6 INDEX PERFORMANCE IS 3.36% FOR CLASS C (SINCE 12/31/98). - -------------------------------------------------------------------------------- GROWTH OF $10,000 PERIODS ENDING 6/30/06 - -------------------------------------------------------------------------------- This Growth of $10,000 chart assumes an initial investment of $10,000 made on 6/30/96 in Class A shares and Class B shares. The total return for Class A shares reflects the maximum sales charge of 5.75% on the initial investment. The total return for Class B shares includes applicable CDSC charges which decline from 5% to 0% over a five year period. The performance of the other share class will be greater or less than that shown based on differences in inception dates, fees and sales charges. Performance assumes dividends and capital gain distributions are reinvested. [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.] Phoenix Phoenix Worldwide Worldwide MSCI Strategies Strategies World S&P Fund Fund Index(SM) 500(R) Class A Class B (Net) Index ---------- ---------- --------- ------- 06/28/1996 $ 9,425 $10,000 $10,000 $10,000 06/30/1997 10,688 11,246 12,227 13,475 06/30/1998 14,050 14,688 14,309 17,558 06/30/1999 15,300 15,862 16,551 21,545 06/30/2000 17,058 17,559 18,569 23,143 06/29/2001 14,531 14,823 14,801 19,709 06/28/2002 13,027 13,207 12,548 16,165 06/30/2003 11,804 11,860 12,251 16,207 06/30/2004 14,478 14,442 15,191 19,305 06/30/2005 15,897 15,763 16,718 20,523 06/30/2006 18,902 18,587 19,549 22,294 For information regarding the indexes, see the glossary on page 3. 45 PHOENIX WORLDWIDE STRATEGIES FUND ABOUT YOUR FUND'S EXPENSES We believe it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder of the Worldwide Strategies Fund, you incur two types of costs: (1) transaction costs, including sales charges on purchases of Class A shares and contingent deferred sales charges on Class B and Class C shares; and (2) ongoing costs, including investment advisory fees; distribution and service fees; and other expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period. ACTUAL EXPENSES The first line of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not your Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the accompanying tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges or contingent deferred sales charges. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs could have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Worldwide Beginning Ending Expenses Paid Strategies Fund Account Value Account Value During Class A December 31, 2005 June 30, 2006 Period* - ------------------------ ----------------- ------------- ------------- Actual $ 1,000.00 $1,074.10 $8.23 Hypothetical (5% return before expenses) 1,000.00 1,016.77 8.03 * EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.60%, WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS A RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV FOR THE FISCAL YEAR WAS 18.90%. AN INVESTMENT OF $1,000.00 AT JUNE 30, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006, OF $1,189.00. Worldwide Beginning Ending Expenses Paid Strategies Fund Account Value Account Value During Class B December 31, 2005 June 30, 2006 Period* - ------------------------ ----------------- ------------- ------------- Actual $1,000.00 $1,070.30 $12.06 Hypothetical (5% return before expenses) 1,000.00 1,013.00 11.80 * EXPENSES ARE EQUAL TO THE FUND'S CLASS B ANNUALIZED EXPENSE RATIO OF 2.35%, WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS B RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV FOR THE FISCAL YEAR WAS 17.92%. AN INVESTMENT OF $1,000.00 AT JUNE 30, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,179.20. Worldwide Beginning Ending Expenses Paid Strategies Fund Account Value Account Value During Class C December 31, 2005 June 30, 2006 Period* - ------------------------ ----------------- ------------- ------------- Actual $1,000.00 $1,070.60 $12.06 Hypothetical (5% return before expenses) 1,000.00 1,013.00 11.80 * EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.35%, WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS (181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD. ACTUAL RETURN AS CALCULATED IN THE ABOVE TABLE IS BASED ON THE FUND'S CLASS C RETURN FOR THE PAST SIX MONTHS. WHILE REQUIRED TO BE PRESENTED IN THIS FORMAT, IT IS NOT THE CLASS' ACTUAL RETURN FOR THE YEAR ENDED JUNE 30, 2006. THE CLASS' ACTUAL RETURN AT NAV FOR THE FISCAL YEAR WAS 17.99%. AN INVESTMENT OF $1,000.00 AT JUNE 30, 2005 WOULD HAVE YIELDED AN ACCOUNT VALUE AT JUNE 30, 2006 OF $1,179.90. YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING EXPENSES AND OTHER SHAREHOLDER COSTS REFER TO THE PROSPECTUS. 46 PHOENIX WORLDWIDE STRATEGIES FUND - -------------------------------------------------------------------------------- COUNTRY WEIGHTINGS 6/30/06 - -------------------------------------------------------------------------------- As a percentage of total investments [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] United States 34% Japan 12 United Kingdom 11 France 6 Germany 4 Switzerland 3 Australia 3 Other 27 SCHEDULE OF INVESTMENTS JUNE 30, 2006
SHARES VALUE ------------- -------------- DOMESTIC COMMON STOCKS--36.2% UNITED STATES--36.2% 3M Co. (Industrial Conglomerates) ..................... 800 $ 64,616 Abbott Laboratories (Pharmaceuticals) ................. 7,700 335,797 Advanced Micro Devices, Inc. (Semiconductors)(b)(d) ................................ 3,600 87,912 Aetna, Inc. (Managed Health Care) ..................... 5,800 231,594 AFLAC, Inc. (Life & Health Insurance) ................. 3,800 176,130 Allstate Corp. (The) (Property & Casualty Insurance) ............................................ 10,200 558,246 American Express Co. (Consumer Finance) ............... 6,100 324,642 American Home Mortgage Investment Corp. (Mortgage REIT's)(d) .................................. 1,900 70,034 Amkor Technology, Inc. (Semiconductor Equipment)(b) ......................................... 3,200 30,272 AON Corp. (Insurance Brokers)(d) ...................... 2,200 76,604 Applera Corp. - Applied Biosystems Group (Life Sciences Tools & Services) ...................... 2,500 80,875 Arrow Electronics, Inc. (Technology Distributors)(b) .. 2,200 70,840 AT&T, Inc. (Integrated Telecommunication Services) ............................................. 22,700 633,103 Autodesk, Inc. (Application Software)(b) .............. 1,000 34,460 Bank of America Corp. (Other Diversified Financial Services) ............................................. 30,000 1,443,000 Bank of Hawaii Corp. (Regional Banks) ................. 1,700 84,320 Bank of New York Co., Inc. (The) (Asset Management & Custody Banks) ........................... 5,100 164,220
SHARES VALUE ------------- -------------- UNITED STATES--CONTINUED Barnes & Noble, Inc. (Specialty Stores) ............... 800 $ 29,200 Barr Pharmaceuticals, Inc. (Pharmaceuticals)(b) ....... 1,800 85,842 Bausch & Lomb, Inc. (Health Care Supplies)(d) ......... 2,700 132,408 Baxter International, Inc. (Health Care Equipment) .... 4,900 180,124 Becton, Dickinson & Co. (Health Care Equipment) ....... 5,000 305,650 BellSouth Corp. (Integrated Telecommunication Services) ............................................. 9,200 333,040 Black & Decker Corp. (The) (Household Appliances) ........................................... 3,000 253,380 BMC Software, Inc. (Systems Software)(b)(d) ........... 2,800 66,920 Boeing Co. (The) (Aerospace & Defense) ................ 2,400 196,584 Boston Properties, Inc. (Office REIT's) ............... 1,000 90,400 Burlington Northern Santa Fe Corp. (Railroads) ........ 900 71,325 Campbell Soup Co. (Packaged Foods & Meats) ............ 3,200 118,752 Capital One Financial Corp. (Consumer Finance) ........ 2,000 170,900 Cardinal Health, Inc. (Health Care Distributors) ...... 3,000 192,990 Caremark Rx, Inc. (Health Care Services) .............. 2,400 119,688 CBS Corp. Class B (Broadcasting & Cable TV) ........... 3,900 105,495 CheckFree Corp. (Data Processing & Outsourced Services)(b) .......................................... 600 29,736 Chevron Corp. (Integrated Oil & Gas) .................. 10,300 639,218 CIGNA Corp. (Managed Health Care) ..................... 1,300 128,063 Cincinnati Financial Corp. (Property & Casualty Insurance) ............................................ 700 32,907 Cisco Systems, Inc. (Communications Equipment)(b) ......................................... 32,600 636,678 Citigroup, Inc. (Other Diversified Financial Services) ............................................. 13,300 641,592 Citizens Communications Co. (Integrated Telecommunication Services) ........................... 14,800 193,140
See Notes to Financial Statements 47 PHOENIX WORLDWIDE STRATEGIES FUND
SHARES VALUE ------------- -------------- UNITED STATES--CONTINUED Coca-Cola Co. (The) (Soft Drinks) ..................... 4,800 $ 206,496 Colgate-Palmolive Co. (Household Products) ............ 5,000 299,500 Comerica, Inc. (Diversified Banks) .................... 2,000 103,980 Computer Sciences Corp. (Data Processing & Outsourced Services)(b)(d) ............................ 700 33,908 ConocoPhillips (Integrated Oil & Gas) ................. 5,900 386,627 Constellation Energy Group, Inc. (Independent Power Producers & Energy Traders) ..................... 3,000 163,560 Crown Holdings, Inc. (Metal & Glass Containers)(b) .... 5,000 77,850 Danaher Corp. (Industrial Machinery) .................. 900 57,888 Dell, Inc. (Computer Hardware)(b) ..................... 11,800 288,038 Devon Energy Corp. (Oil & Gas Exploration & Production) ........................................... 2,200 132,902 Dollar General Corp. (General Merchandise Stores) ............................................... 2,500 34,950 Donnelley (R.R.) & Sons Co. (Commercial Printing) ............................................. 4,000 127,800 Dover Corp. (Industrial Machinery) .................... 1,100 54,373 Dow Chemical Co. (The) (Diversified Chemicals) ........ 4,000 156,120 Dun & Bradstreet Corp. (Diversified Commercial & Professional Services)(b) ............................. 1,500 104,520 Eaton Corp. (Industrial Machinery) .................... 4,300 324,220 Embarq Corp. (Integrated Telecommunication Services)(b) .......................................... 655 26,849 Emerson Electric Co. (Electrical Components & Equipment) ............................................ 4,500 377,145 Emulex Corp. (Computer Storage & Peripherals)(b) ...... 5,000 81,350 Endo Pharmaceuticals Holdings, Inc. (Pharmaceuticals)(b) .................................. 2,700 89,046 Exxon Mobil Corp. (Integrated Oil & Gas) .............. 29,500 1,809,825 Federated Department Stores, Inc. (Department Stores) ............................................... 8,400 307,440 Federated Investors, Inc. Class B (Asset Management & Custody Banks) ........................... 2,700 85,050 Fiserv, Inc. (Data Processing & Outsourced Services)(b) .......................................... 4,300 195,048 Fisher Scientific International, Inc. (Life Sciences Tools & Services)(b) .................................. 2,500 182,625 Ford Motor Co. (Automobile Manufacturers)(d) .......... 9,700 67,221 Foundation Coal Holdings, Inc. (Coal & Consumable Fuels) ..................................... 800 37,544
SHARES VALUE ------------- -------------- UNITED STATES--CONTINUED Franklin Resources, Inc. (Asset Management & Custody Banks) ........................................ 1,700 $ 147,577 Freeport-McMoRan Copper & Gold, Inc. Class B (Indonesia) (Diversified Metals & Mining)(d) .......... 3,000 166,230 Freescale Semiconductor, Inc. Class B (Semiconductors)(b) ................................... 4,200 123,480 Gap, Inc. (The) (Apparel Retail) ...................... 8,800 153,120 General Electric Co. (Industrial Conglomerates) ...... 20,900 688,864 General Mills, Inc. (Packaged Foods & Meats) .......... 3,800 196,308 Grey Wolf, Inc. (Oil & Gas Drilling)(b)(d) ............ 15,900 122,430 Harley-Davidson, Inc. (Motorcycle Manufacturers) ...... 700 38,423 Harris Corp. (Communications Equipment) ............... 1,700 70,567 Hartford Financial Services Group, Inc. (The) (Multi-line Insurance) ................................ 500 42,300 Hewlett-Packard Co. (Computer Hardware) ............... 14,100 446,688 Highwoods Properties, Inc. (Office REIT's) ............ 4,100 148,338 Home Depot, Inc. (The) (Home Improvement Retail) ............................................... 9,400 336,426 Honeywell International, Inc. (Aerospace & Defense) .............................................. 5,400 217,620 IAC/InterActiveCorp. (Internet Retail)(b)(d) .......... 3,100 82,119 Illinois Tool Works, Inc. (Industrial Machinery) ...... 6,400 304,000 Intel Corp. (Semiconductors) .......................... 25,900 490,805 International Business Machines Corp. (Computer Hardware) ............................................. 9,600 737,472 Intuit, Inc. (Application Software)(b) ................ 1,900 114,741 IPSCO, Inc. (Steel) ................................... 506 48,442 Johnson & Johnson (Pharmaceuticals) ................... 17,100 1,024,632 JPMorgan Chase & Co. (Other Diversified Financial Services) ................................... 21,200 890,400 Kellogg Co. (Packaged Foods & Meats) .................. 11,000 532,730 KeyCorp (Regional Banks) .............................. 3,900 139,152 Kimberly-Clark Corp. (Household Products) ............. 5,900 364,030 Kinetic Concepts, Inc. (Health Care Equipment)(b) ..... 900 39,735 Kroger Co. (The) (Food Retail) ........................ 4,000 87,440 Labor Ready, Inc. (Human Resources & Employment Services)(b) ............................... 1,200 27,180 Lam Research Corp. (Semiconductor Equipment)(b) ....... 1,500 69,930 Lilly (Eli) & Co. (Pharmaceuticals) ................... 2,500 138,175 Lincoln National Corp. (Life & Health Insurance) ...... 4,900 276,556 Lockheed Martin Corp. (Aerospace & Defense) ........... 3,700 265,438 Loews Corp. - Carolina Group (Tobacco)(d) ............ 4,600 236,302 LSI Logic Corp. (Semiconductors)(b)(d) ................ 8,000 71,600 Marathon Oil Corp. (Integrated Oil & Gas) ............. 900 74,970
48 See Notes to Financial Statements PHOENIX WORLDWIDE STRATEGIES FUND
SHARES VALUE ------------- -------------- UNITED STATES--CONTINUED Masco Corp. (Building Products) ....................... 5,100 $ 151,164 McDonald's Corp. (Restaurants) ........................ 11,500 386,400 McKesson Corp. (Health Care Distributors) ............. 5,100 241,128 Merck & Co., Inc. (Pharmaceuticals) ................... 5,900 214,937 Merrill Lynch & Co., Inc. (Investment Banking & Brokerage) ............................................ 7,500 521,700 MetLife, Inc. (Life & Health Insurance) ............... 10,600 542,826 Microsoft Corp. (Systems Software) .................... 32,500 757,250 Morgan Stanley (Investment Banking & Brokerage) ............................................ 3,000 189,630 Motorola, Inc. (Communications Equipment) ............. 21,300 429,195 National City Corp. (Regional Banks)(d) ............... 1,000 36,190 National Semiconductor Corp. (Semiconductors) ......... 3,100 73,935 NCR Corp. (Computer Hardware)(b) ...................... 1,100 40,304 New Plan Excel Realty Trust (Retail REIT's)(d) ........ 2,200 54,318 Newell Rubbermaid, Inc. (Housewares & Specialties)(d) ....................................... 7,300 188,559 Nike, Inc. Class B (Footwear) ......................... 2,400 194,400 Nordstrom, Inc. (Department Stores)(d) ................ 6,900 251,850 Norfolk Southern Corp. (Railroads) .................... 2,300 122,406 Northern Trust Corp. (Asset Management & Custody Banks) ........................................ 4,000 221,200 Northrop Grumman Corp. (Aerospace & Defense) .......... 2,600 166,556 NVIDIA Corp. (Semiconductors)(b) ...................... 2,600 55,354 Occidental Petroleum Corp. (Integrated Oil & Gas) ..... 7,900 810,145 OmniVision Technologies, Inc. (Semiconductors)(b)(d) ................................ 3,000 63,360 ON Semiconductor Corp. (Semiconductors)(b)(d) ......... 9,000 52,920 Oracle Corp. (Systems Software)(b) .................... 22,400 324,576 PACCAR, Inc. (Construction & Farm Machinery & Heavy Trucks)(d) ...................................... 1,600 131,808 Pacer International, Inc. (Air Freight & Logistics)(d) 1,100 35,838 Parker-Hannifin Corp. (Industrial Machinery) .......... 1,100 85,360 Penney (JC) Co., Inc. (Department Stores) ............. 4,800 324,048 Pepsi Bottling Group, Inc. (The) (Soft Drinks)(d) ..... 8,700 279,705 PepsiAmericas, Inc. (Soft Drinks) ..................... 1,300 28,743 PerkinElmer, Inc. (Life Sciences Tools & Services) .... 7,000 146,300 Pfizer, Inc. (Pharmaceuticals) ........................ 37,100 870,737 Philadelphia Consolidated Holding Co. (Property & Casualty Insurance)(b) ................................ 800 24,288 PPG Industries, Inc. (Diversified Chemicals) .......... 600 39,600 PPL Corp. (Electric Utilities) ........................ 3,600 116,280 Principal Financial Group, Inc. (The) (Life & Health Insurance)(d) .................................. 3,900 217,035
SHARES VALUE ------------- -------------- UNITED STATES--CONTINUED Progressive Corp. (The) (Property & Casualty Insurance) ............................................ 4,800 $ 123,408 Protective Life Corp. (Life & Health Insurance) ...... 600 27,972 Prudential Financial, Inc. (Life & Health Insurance) .. 3,200 248,640 Qwest Communications International, Inc. (Integrated Telecommunication Services)(b)(d) ......... 7,200 58,248 Raytheon Co. (Aerospace & Defense) .................... 2,800 124,796 Reynolds American, Inc. (Tobacco)(d) .................. 3,800 438,140 Rohm and Haas Co. (Specialty Chemicals) ............... 1,200 60,144 Sanmina-SCI Corp. (Electronic Manufacturing Services)(b) .......................................... 13,400 61,640 Sherwin-Williams Co. (The) (Home Improvement Retail)(d) ............................................ 5,400 256,392 Silgan Holdings, Inc. (Metal & Glass Containers) ...... 900 33,309 Sprint Nextel Corp. (Wireless Telecommunication Services) ............................................. 13,100 261,869 St. Paul Travelers Cos., Inc. (The) (Property & Casualty Insurance) ................................... 8,800 392,304 StanCorp Financial Group, Inc. (Life & Health Insurance) ............................................ 600 30,546 Staples, Inc. (Specialty Stores) ...................... 1,100 26,752 State Street Corp. (Asset Management & Custody Banks) ................................................ 2,900 168,461 Sunoco, Inc. (Oil & Gas Refining & Marketing) ......... 1,100 76,219 SunTrust Banks, Inc. (Regional Banks) ................. 700 53,382 Symantec Corp. (Systems Software)(b) .................. 1,900 29,526 Synovus Financial Corp. (Regional Banks) .............. 2,000 53,560 Tellabs, Inc. (Communications Equipment)(b)(d) ........ 4,300 57,233 Texas Instruments, Inc. (Semiconductors) .............. 9,400 284,726 Textron, Inc. (Industrial Conglomerates) .............. 1,100 101,398 Time Warner, Inc. (Movies & Entertainment) ............ 40,100 693,730 TODCO Class A (Oil & Gas Drilling)(d) ................. 2,600 106,210 Toro Co. (The) (Construction & Farm Machinery & Heavy Trucks) ......................................... 2,100 98,070 U.S. Bancorp (Diversified Banks) ...................... 4,500 138,960 United Parcel Service, Inc. Class B (Air Freight & Logistics) ............................................ 800 65,864 United Technologies Corp. (Aerospace & Defense) ...... 9,900 627,858 UnitedHealth Group, Inc. (Managed Health Care) ........ 4,600 205,988 Unitrin, Inc. (Multi-line Insurance) .................. 500 21,795 USG Corp. (Building Products)(b)(d) .................. 500 36,465 VeriSign, Inc. (Internet Software & Services)(b)(d) ... 5,600 129,752
See Notes to Financial Statements 49 PHOENIX WORLDWIDE STRATEGIES FUND
SHARES VALUE ------------- -------------- UNITED STATES--CONTINUED Verizon Communications, Inc. (Integrated Telecommunication Services) ........................... 16,500 $ 552,585 VF Corp. (Apparel, Accessories & Luxury Goods) ........ 1,700 115,464 Viacom, Inc. Class B (Movies & Entertainment)(b) ...... 3,900 139,776 Wachovia Corp. (Diversified Banks) .................... 14,400 778,752 Walt Disney Co. (The) (Movies & Entertainment) ........ 4,900 147,000 Watson Pharmaceuticals, Inc. (Pharmaceuticals)(b)(d) ............................... 1,000 23,280 WellPoint, Inc. (Managed Health Care)(b) .............. 3,800 276,526 Wells Fargo & Co. (Diversified Banks) ................. 3,400 228,072 Whirlpool Corp. (Household Appliances) ................ 700 57,855 Wyeth (Pharmaceuticals) ............................... 3,100 137,671 Yum! Brands, Inc. (Restaurants)(d) .................... 3,600 180,972 Zoran Corp. (Semiconductors)(b) ....................... 1,800 43,812 - ---------------------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $39,181,300) 40,111,959 - ---------------------------------------------------------------------------------------- FOREIGN COMMON STOCKS(c)--61.7% AUSTRALIA--3.2% AXA Asia Pacific Holdings Ltd. (Life & Health Insurance) ............................................ 5,519 25,715 Leighton Holdings Ltd. (Construction & Engineering) .......................................... 10,521 135,645 Orica Ltd. (Diversified Chemicals)(d) ................. 11,390 202,203 Oxiana Ltd. (Diversified Metals & Mining)(d) .......... 257,086 603,690 Publishing & Broadcasting Ltd. (Broadcasting & Cable TV) ............................................. 23,539 318,527 QBE Insurance Group Ltd. (Property & Casualty Insurance)(d) ......................................... 1,543 23,506 Rio Tinto Ltd. (Diversified Metals & Mining)(d) ....... 15,263 882,405 Santos Ltd. (Oil & Gas Exploration & Production) ...... 78,959 709,963 Westfield Group (Real Estate Management & Development)(d) ....................................... 20,000 257,559 Zinifex Ltd. (Diversified Metals & Mining) ............ 48,580 361,721 -------------- 3,520,934 -------------- AUSTRIA--0.1% Voestalpine AG (Steel) ................................ 1,032 156,814 BELGIUM--0.8% Dexia (Diversified Banks) ............................. 16,994 408,640 Fortis BB (Other Diversified Financial Services)(d) ... 7,600 258,767 KBC Groep N.V. (Diversified Banks) .................... 1,655 177,602 Omega Pharma SA (Health Care Distributors) ............ 522 36,455 -------------- 881,464 --------------
SHARES VALUE ------------- -------------- CANADA--0.9% EnCana Corp. (Oil & Gas Exploration & Production) ........................................... 6,800 $ 359,402 Methanex Corp. (Commodity Chemicals) .................. 1,700 35,833 Teck Cominco Ltd. Class B (Gold) ...................... 9,188 551,296 TELUS Corp. (Integrated Telecommunication Services) ............................................. 900 36,321 -------------- 982,852 -------------- CHINA--1.1% ASM Pacific Technology Ltd. (Semiconductor Equipment) ............................................ 11,500 56,047 China Petroleum & Chemical Corp. Class H (Integrated Oil & Gas) ................................ 439,000 251,542 PetroChina Co. Ltd. Class H (Integrated Oil & Gas) .................................................. 774,000 827,189 Yanzhou Coal Mining Co. Ltd. (Coal & Consumable Fuels) ..................................... 202,000 149,556 -------------- 1,284,334 -------------- DENMARK--0.4% Danske Bank A/S (Diversified Banks) ................... 10,500 399,702 FINLAND--0.0% Metso Oyj (Industrial Machinery) ...................... 700 25,401 FRANCE--7.1% Air France - KLM (Airlines)(d) ........................ 14,702 345,628 Alcatel SA (Communications Equipment)(b)(d) ........... 34,300 435,205 Alstom (Heavy Electrical Equipment)(b) ................ 4,000 365,553 Arkema (Diversified Chemicals)(b) ..................... 330 12,878 AXA SA (Multi-line Insurance)(d) ...................... 14,889 488,645 BNP Paribas SA (Diversified Banks) .................... 4,800 459,537 Bouygues SA (Wireless Telecommunication Services)(d) .......................................... 7,300 375,350 Capgemini SA (IT Consulting & Other Services) ......... 6,800 388,171 Carrefour SA (Hypermarkets & Super Centers)(d) ........ 5,300 310,748 Lafarge SA (Construction Materials)(d) ................ 2,700 338,955 LVMH Moet Hennessy Louis Vuitton SA (Apparel, Accessories & Luxury Goods) ........................... 920 91,314 Sanofi-aventis (Pharmaceuticals)(d) ................... 6,500 634,345 Societe Generale (Diversified Banks)(d) ............... 5,200 764,872 Suez SA (Multi-Utilities)(d) .......................... 10,000 415,691 Technip SA (Oil & Gas Equipment & Services)(d) ........ 4,870 269,715 Total SA (Integrated Oil & Gas)(d) .................... 20,288 1,335,095 Vallourec SA (Industrial Machinery)(d) ................ 398 478,518 Vivendi Universal SA (Movies & Entertainment) ......... 11,045 387,083 -------------- 7,897,303 --------------
50 See Notes to Financial Statements PHOENIX WORLDWIDE STRATEGIES FUND
SHARES VALUE ------------- -------------- GERMANY--4.6% Allianz AG Registered Shares (Multi-line Insurance) ............................................ 4,680 $ 739,385 BASF AG (Diversified Chemicals) ....................... 2,308 185,330 Bayerische Motoren Werke AG (Automobile Manufacturers) ........................................ 3,700 184,851 Commerzbank AG (Diversified Banks) .................... 22,392 814,536 Continental AG (Tires & Rubber) ....................... 191 19,524 Deutsche Bank AG (Diversified Capital Markets) ........ 1,167 131,353 Deutsche Lufthansa AG Registered Shares (Airlines) ............................................ 41,132 757,583 E.ON AG (Electric Utilities) .......................... 4,500 518,015 Fresenius Medical Care AG (Health Sare Services) ...... 2,200 252,914 MAN AG (Industrial Machinery) ......................... 3,161 228,919 Metro AG (Hypermarkets & Super Centers) ............... 5,900 334,456 Puma AG Rudolf Dassler Sport (Footwear) ............... 528 205,256 Salzgitter AG (Steel)(d) .............................. 4,873 413,672 SAP AG (Application Software) ......................... 1,300 274,356 ThyssenKrupp AG (Steel) ............................... 1,827 62,557 -------------- 5,122,707 -------------- GREECE--0.4% Alpha Bank A.E. (Diversified Banks) ................... 16,940 422,075 HONG KONG--2.0% Bank of East Asia, Ltd. (Diversified Banks) ........... 27,200 111,899 Cheung Kong Holdings Ltd. (Real Estate Management & Development) ............................. 32,000 346,729 China Mobile Ltd. (Wireless Telecommunication Services) ............................................. 51,000 291,567 China Netcom Group Corp. (Integrated Telecommunication Services) ........................... 86,000 150,599 Guangdong Investments Ltd. (Industrial Conglomerates) ........................................ 592,000 226,775 Jiangxi Copper Co. Ltd. (Diversified Metals & Mining) ............................................... 147,000 136,281 Solomon Systech International Ltd. (Semiconductors) ...................................... 752,000 189,784 Sun Hung Kai Properties Ltd. (Real Estate Management & Development) ............................. 29,000 295,739 Television Broadcasts Ltd. (Broadcasting & Cable TV) ............................................. 39,000 241,041 VTech Holdings Ltd. (Communications Equipment) ........ 46,907 244,613 -------------- 2,235,027 --------------
SHARES VALUE ------------- -------------- ITALY--1.6% ENI S.p.A. (Integrated Oil & Gas)(d) .................. 36,614 $ 1,078,521 Fondiaria - Sai S.p.A. (Property & Casualty Insurance) ............................................ 5,500 224,832 UniCredito Italiano S.p.A. (Diversified Banks) ........ 56,900 445,401 -------------- 1,748,754 -------------- JAPAN--13.1% ABILIT Corp. (Leisure Products) ....................... 4,500 44,119 AEON Co. Ltd. (Hypermarkets & Super Centers) .......... 37,100 813,710 Canon, Inc. (Office Electronics)(d) ................... 15,300 750,026 Central Japan Railway Co. (Railroads) ................. 8 79,692 Daiwa House Industry Co. Ltd. (Homebuilding)(d) ....... 16,000 255,855 Diamond Lease Co. Ltd. (Consumer Finance) ............. 1,100 54,692 Fujikura Ltd. (Electrical Components & Equipment)(d) ......................................... 7,000 77,254 Kaneka Corp. (Commodity Chemicals) .................... 9,000 81,790 Kanto Auto Works Ltd. (Auto Parts & Equipment) ........ 1,700 20,901 Kao Corp. (Household Products) ........................ 13,000 340,222 KDDI Corp. (Wireless Telecommunication Services) ............................................. 50 307,148 Keyence Corp. (Electronic Equipment Manufacturers) ........................................ 1,100 280,863 Makita Corp. (Household Appliances)(d) ................ 4,100 129,692 Mazda Motor Corp. (Automobile Manufacturers)(d) ....... 45,000 281,938 Millea Holdings, Inc. (Property & Casualty Insurance) ............................................ 30 558,371 Mitsui Sumitomo Insurance Co. Ltd. (Property & Casualty Insurance) ................................... 26,000 326,477 Mitsui Trust Holdings, Inc. (Diversified Banks) ...... 26,000 312,391 Mizuho Financial Group, Inc. (Diversified Banks) ...... 127 1,075,350 Momiji Holdings, Inc. (Regional Banks)(b) ............ 17 41,594 Murata Manufacturing Co. Ltd. (Electronic Equipment Manufacturers) .............................. 7,800 506,414 Nikko Cordial Corp. (Investment Banking & Brokerage)(d) ......................................... 24,000 307,026 Nippon Oil Corp. (Oil & Gas Refining & Marketing) ..... 59,000 431,003 Nissan Diesel Motor Co. Ltd. (Construction & Farm Machinery & Heavy Trucks) ........................ 16,000 81,370 Nissin Kogyo Co. Ltd (Auto Parts & Equipment)(d) ...... 19,200 354,002 Nomura Holdings, Inc. (Investment Banking & Brokerage)(d) ......................................... 16,700 313,016 NTT DoCoMo, Inc. (Wireless Telecommunication Services) ............................................. 214 314,156
See Notes to Financial Statements 51 PHOENIX WORLDWIDE STRATEGIES FUND
SHARES VALUE ------------- -------------- JAPAN--CONTINUED OMRON Corp. (Electronic Equipment Manufacturers) ........................................ 16,100 $ 410,097 ORIX Corp. (Consumer Finance) ......................... 3,600 879,238 SBI Holdings, Inc. (Asset Management & Custody Banks)(d) ............................................. 343 151,359 Secom Co. Ltd. (Specialized Consumer Services) ........ 8,500 401,826 Sega Sammy Holdings, Inc. (Leisure Products) .......... 3,100 114,855 Sekisui House Ltd. (Homebuilding) ..................... 32,000 439,287 Sharp Corp. (Consumer Electronics) .................... 20,000 315,973 Shinsei Bank Ltd. (Regional Banks) .................... 55,000 348,436 Sumitomo Metal Mining Co. Ltd (Diversified Metals & Mining) ...................................... 35,000 456,309 Sumitomo Trust & Banking Co. Ltd. (The) (Diversified Banks) ................................... 60,000 655,365 Suzuki Motor Corp. (Automobile Manufacturers) ......... 16,000 346,033 Tokyo Electric Power Co., Inc. (The) (Electric Utilities) ............................................ 11,500 317,546 Tokyo Electron Ltd. (Semiconductor Equipment) ......... 9,000 629,151 West Japan Railway Co. (Railroads) .................... 1 4,151 Yamaha Motor Co. Ltd. (Motorcycle Manufacturers)(d) ..................................... 32,400 846,522 Yamato Kogyo Co. Ltd. (Steel) ......................... 4,700 105,138 -------------- 14,560,358 -------------- MALAYSIA--0.2% British American Tobacco Malaysia Berhad (Tobacco) ............................................. 1,200 12,900 DiGi.Com Berhad (Integrated Telecommunication Services)(b) .......................................... 58,700 174,127 Shell Refining Co. (Oil & Gas Refining & Marketing) ............................................ 4,700 12,919 Telekom Malaysia Berhad (Integrated Telecommunication Services) ........................... 15,600 38,421 -------------- 238,367 -------------- NETHERLANDS--2.9% ABN AMRO Holding N.V. (Diversified Banks) ............. 130 3,557 Akzo Nobel N.V. (Diversified Chemicals) ............... 6,196 334,118 ASML Holding N.V. (Semiconductor Equipment)(b) ........ 15,700 318,084 ING Groep N.V. (Other Diversified Financial Services) ............................................. 55,979 2,200,267 Unilever N.V. - CVA (Packaged Foods & Meats)(d) ....... 244 5,533 Wolters Kluwer N.V. (Publishing & Printing) ........... 15,800 373,260 -------------- 3,234,819 --------------
SHARES VALUE ------------- -------------- NORWAY--0.3% Orkla ASA (Industrial Conglomerates) .................. 420 $ 19,465 Statoil ASA (Integrated Oil & Gas) .................... 10,800 306,222 -------------- 325,687 -------------- RUSSIA--0.4% LUKOIL Sponsored ADR (Integrated Oil & Gas) ........... 3,800 317,680 Mobile TeleSystems OJSC Sponsored ADR (Wireless Telecommunication Services) ................. 6,400 188,416 -------------- 506,096 -------------- SINGAPORE--0.4% SembCorp Industries Ltd. (Industrial Conglomerates) ........................................ 32,000 65,502 Singapore Airlines Ltd. (Airlines) .................... 12,000 96,282 StarHub Ltd. (Wireless Telecommunication Services) ............................................. 44,000 63,380 United Overseas Bank Ltd. (Diversified Banks) ......... 22,000 216,824 -------------- 441,988 -------------- SOUTH KOREA--0.3% LG Telecom Ltd. (Communications Equipment)(b) ......... 23,190 303,089 SPAIN--2.1% Actividades de Construccion y Servicios SA (Construction & Engineering)(d) ....................... 5,699 237,705 Banco Bilbao Vizcaya Argentaria SA (Diversified Banks)(d) ............................................. 27,623 568,126 Banco Santander Central Hispano SA (Diversified Banks) ................................................ 96,919 1,415,672 Corporacion Mapfre SA (Multi-line Insurance) .......... 3,528 65,115 -------------- 2,286,618 -------------- SWEDEN--1.3% JM AB (Construction & Engineering) .................... 3,200 50,912 Lindex AB (Apparel Retail)(d) ......................... 800 11,394 Nordea Bank AB (Diversified Banks) .................... 98,000 1,171,084 Securitas AB Class B (Diversified Commercial & Professional Services) ................................ 14,100 270,372 -------------- 1,503,762 -------------- SWITZERLAND--3.3% Actelion Ltd. Registered Shares (Biotechnology)(b) .... 576 58,045 Credit Suisse Group Registered Shares (Diversified Capital Markets) ......................... 20,030 1,120,651 Novartis AG Registered Shares (Pharmaceuticals) ...... 12,500 676,864 Roche Holding AG Registered Shares (Pharmaceuticals) ..................................... 5,500 909,206
52 See Notes to Financial Statements PHOENIX WORLDWIDE STRATEGIES FUND
SHARES VALUE ------------- -------------- SWITZERLAND--CONTINUED UBS AG Registered Shares (Diversified Capital Markets) .............................................. 3,800 $ 416,507 Zurich Financial Services AG Registered Shares (Multi-line Insurance)(d) ............................. 2,100 460,349 -------------- 3,641,622 -------------- TAIWAN--0.6% Chunghwa Telecom Co., Ltd. (Integrated Telecommunication Services) ........................... 71,000 128,284 Taiwan Semiconductor Manufacturing Co. Ltd. Sponsored ADR (Semiconductors) ........................ 55,426 508,812 -------------- 637,096 -------------- THAILAND--0.4% Advanced Info Service PCL NVDR (Wireless Telecommunication Services) ........................... 86,000 203,043 Bangkok Bank PCL NVDR (Regional Banks) ................ 81,200 217,272 -------------- 420,315 -------------- TURKEY--0.0% KOC Holding AS (Automobile Manufacturers)(b) .......... 4,287 12,786 UNITED KINGDOM--12.4% Antofagasta plc (Diversified Metals & Mining) ......... 108,185 836,240 Ashtead Group plc (Trading Companies & Distributors) ......................................... 34,864 107,989 AstraZeneca plc (Pharmaceuticals) ..................... 31,684 1,912,395 Aviva plc (Multi-line Insurance) ...................... 29,500 417,594 BAE Systems plc (Aerospace & Defense) ................. 41,000 280,336 Barclays plc (Diversified Banks) ...................... 28,600 324,994 British American Tobacco plc (Tobacco) ................ 60,000 1,511,179 British Sky Broadcasting plc (Broadcasting & Cable TV) ............................................. 35,000 371,184 Drax Group plc (Electric Utilities)(b) ................ 16,218 246,523 Emap plc (Publishing & Printing) ...................... 97,178 1,530,171 GlaxoSmithKline plc (Pharmaceuticals) ................. 38,400 1,072,959 HSBC Holdings plc (Diversified Banks) ................. 45,248 796,151 Legal & General Group plc (Life & Health Insurance) ............................................ 172,300 408,630 Marks & Spencer Group plc (Department Stores) ......... 63,098 684,922 Michael Page International plc (Human Resources & Employment Services) ................................ 23,656 153,326 National Grid plc (Multi-Utilities) ................... 28,212 305,195 NETeller plc (Other Diversified Financial Services)(b) 15,300 168,626 Next plc (Department Stores) .......................... 11,050 333,480
SHARES VALUE ------------- -------------- UNITED KINGDOM--CONTINUED Rolls-Royce Group plc (Aerospace & Defense)(b) ........ 45,562 $ 348,811 Rolls-Royce Group plc Class B (Aerospace & Defense) .............................................. 3,258,236 6,176 Scottish & Newcastle plc (Brewers) .................... 38,100 359,145 Smiths Group plc (Industrial Conglomerates) ........... 20,000 329,530 Sportingbet plc (Casinos & Gaming) .................... 9,921 72,192 Standard Chartered plc (Diversified Banks) ............ 17,692 431,855 Vodafone Group plc (Wireless Telecommunication Services) ............................................. 369,000 786,420 -------------- 13,796,023 -------------- UNITED STATES--1.7% AEGON N.V. (Life & Health Insurance) .................. 25,505 436,156 Ingersoll-Rand Co. Ltd. Class A (Industrial Machinery) ............................................ 13,100 560,418 Royal Dutch Shell plc Class A (Integrated Oil & Gas)(g) ............................................... 19,000 639,459 Royal Dutch Shell plc Class A (Integrated Oil & Gas)(f) ............................................... 3,065 103,104 Tyco International Ltd. (Industrial Conglomerates) .... 5,100 140,250 -------------- 1,879,387 -------------- VENEZUELA--0.1% Compania Anonima Nacional Telefonos de Venezuela ADR (Integrated Telecommunication Services) ............................................. 4,600 90,390 - ---------------------------------------------------------------------------------------- TOTAL FOREIGN COMMON STOCKS (IDENTIFIED COST $57,188,049) 68,555,770 - ---------------------------------------------------------------------------------------- EXCHANGE TRADED FUNDS--0.6% SPDR Trust Series I(d) ................................ 5,200 661,856 - ---------------------------------------------------------------------------------------- TOTAL EXCHANGE TRADED FUNDS (IDENTIFIED COST $646,771) 661,856 - ---------------------------------------------------------------------------------------- FOREIGN PREFERRED STOCKS (c) -- 0.3% GERMANY--0.3% Porsche AG Pfd 0.67% (Automobile Manufacturers) ........................................ 348 336,400 - ---------------------------------------------------------------------------------------- TOTAL FOREIGN PREFERRED STOCKS (IDENTIFIED COST $268,398) 336,400 - ---------------------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--98.8% (IDENTIFIED COST $97,284,518) 109,665,985 - ----------------------------------------------------------------------------------------
See Notes to Financial Statements 53 PHOENIX WORLDWIDE STRATEGIES FUND
SHARES VALUE ------------- -------------- SHORT-TERM INVESTMENTS--14.0% MONEY MARKET MUTUAL FUNDS(e)--13.1% State Street Navigator Prime Plus (5.06% seven day effective yield) .................................. 14,528,306 $ 14,528,306
PAR VALUE (000) ------------- COMMERCIAL PAPER(h)--0.9% Clipper Receivables Co. LLC 5.30%, 7/3/06 ............. $ 835 834,754 Goldman Sachs Group, Inc. (The) 5.26%, 7/3/06 ................................................ 203 202,941 -------------- 1,037,695 -------------- - ---------------------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $15,566,001) ......................... 15,566,001 - ---------------------------------------------------------------------------------------- TOTAL INVESTMENTS--112.8% (IDENTIFIED COST $112,850,519) ........................ 125,231,986(a) Other assets and liabilities, net--(12.8)% ............ (14,227,741) -------------- NET ASSETS--100.0% .................................... $ 111,004,245 ==============
(a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $14,272,486 and gross depreciation of $2,311,831 for federal income tax purposes. At June 30, 2006, the aggregate cost of securities for federal income tax purposes was $113,271,331. (b) Non-income producing. (c) A common stock and a preferred stock are considered to be foreign if the security is issued in a foreign country. The country of risk, noted in the header, is determined based on criteria described in Note 2G "Foreign security country determination" in the Notes to Financial Statements. (d) All or a portion of security is on loan. (e) Represents security purchased with cash collateral received for securities on loan. (f) Shares traded on Amsterdam Exchange. (g) Shares traded on London Exchange. (h) The rate shown is the discount rate. 54 See Notes to Financial Statements PHOENIX WORLDWIDE STRATEGIES FUND INDUSTRY DIVERSIFICATION AS A PERCENTAGE OF TOTAL VALUE OF TOTAL LONG-TERM INVESTMENTS (UNAUDITED) Aerospace & Defense................................................. 2.0% Air Freight & Logistics............................................. 0.1 Airlines............................................................ 1.1 Apparel Retail...................................................... 0.2 Apparel, Accessories & Luxury Goods................................. 0.2 Application Software................................................ 0.4 Asset Management & Custody Banks.................................... 0.9 Auto Parts & Equipment.............................................. 0.3 Automobile Manufacturers............................................ 1.1 Biotechnology....................................................... 0.1 Brewers............................................................. 0.3 Broadcasting & Cable TV............................................. 0.9 Building Products................................................... 0.2 Casinos & Gaming.................................................... 0.1 Coal & Consumable Fuels............................................. 0.2 Commercial Printing................................................. 0.1 Commodity Chemicals................................................. 0.1 Communications Equipment............................................ 2.0 Computer Hardware................................................... 1.4 Computer Storage & Peripherals...................................... 0.1 Construction & Engineering.......................................... 0.4 Construction & Farm Machinery & Heavy Trucks........................ 0.3 Construction Materials.............................................. 0.3 Consumer Electronics................................................ 0.3 Consumer Finance.................................................... 1.3 Data Processing & Outsourced Services............................... 0.2 Department Stores................................................... 1.7 Diversified Banks................................................... 11.2 Diversified Capital Markets......................................... 1.5 Diversified Chemicals............................................... 0.8 Diversified Commercial & Professional Services...................... 0.3 Diversified Metals & Mining......................................... 3.1 Electric Utilities.................................................. 1.1 Electrical Components & Equipment................................... 0.4 Electronic Equipment Manufacturers.................................. 1.1 Electronic Manufacturing Services................................... 0.1 Exchange Traded Funds............................................... 0.6 Food Retail......................................................... 0.1 Footwear............................................................ 0.4 General Merchandise Stores.......................................... 0.0(1) Gold................................................................ 0.5 Health Care Distributors............................................ 0.4% Health Care Equipment............................................... 0.5 Health Care Services................................................ 0.3 Health Care Supplies................................................ 0.1 Heavy Electrical Equipment.......................................... 0.3 Home Improvement Retail............................................. 0.5 Homebuilding........................................................ 0.6 Household Appliances................................................ 0.4 Household Products.................................................. 0.9 Housewares & Specialties............................................ 0.2 Human Resources & Employment Services............................... 0.2 Hypermarkets & Super Centers........................................ 1.3 IT Consulting & Other Services...................................... 0.4 Independent Power Producers & Energy Traders........................ 0.1 Industrial Conglomerates............................................ 1.5 Industrial Machinery................................................ 1.9 Insurance Brokers................................................... 0.1 Integrated Oil & Gas................................................ 7.8 Integrated Telecommunication Services............................... 2.2 Internet Retail..................................................... 0.1 Internet Software & Services........................................ 0.1 Investment Banking & Brokerage...................................... 1.2 Leisure Products.................................................... 0.1 Life & Health Insurance............................................. 2.2 Life Sciences Tools & Services...................................... 0.4 Managed Health Care................................................. 0.8 Metal & Glass Containers............................................ 0.1 Mortgage REIT's..................................................... 0.1 Motorcycle Manufacturers............................................ 0.8 Movies & Entertainment.............................................. 1.2 Multi-Utilities..................................................... 0.7 Multi-line Insurance................................................ 2.0 Office Electronics.................................................. 0.7 Office REIT's....................................................... 0.2 Oil & Gas Drilling.................................................. 0.2 Oil & Gas Equipment & Services...................................... 0.2 Oil & Gas Exploration & Production.................................. 1.1 Oil & Gas Refining & Marketing...................................... 0.5 Other Diversified Financial Services................................ 5.1 Packaged Foods & Meats.............................................. 0.8 Pharmaceuticals..................................................... 7.4 See Notes to Financial Statements 55 PHOENIX WORLDWIDE STRATEGIES FUND INDUSTRY DIVERSIFICATION AS A PERCENTAGE OF TOTAL VALUE OF TOTAL LONG-TERM INVESTMENTS (UNAUDITED) Property & Casualty Insurance....................................... 2.1% Publishing & Printing............................................... 1.7 Railroads........................................................... 0.3 Real Estate Management & Development................................ 0.8 Regional Banks...................................................... 0.9 Restaurants......................................................... 0.5 Retail REIT's....................................................... 0.0(1) Semiconductor Equipment............................................. 1.0 Semiconductors...................................................... 1.9 Soft Drinks......................................................... 0.5 Specialized Consumer Services....................................... 0.4 Specialty Chemicals................................................. 0.1 Specialty Stores.................................................... 0.1 Steel............................................................... 0.7 Systems Software.................................................... 1.1 Technology Distributors............................................. 0.1 Tires & Rubber...................................................... 0.0(1) Tobacco............................................................. 2.0 Trading Companies & Distributors.................................... 0.1 Wireless Telecommunication Services................................. 2.5 ----- 100.0% ===== (1) Amount is less than 0.05%. 56 See Notes to Financial Statements PHOENIX WORLDWIDE STRATEGIES FUND STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2006 ASSETS Investment securities at value, including $13,915,088 of securities on loan (Identified cost $112,850,519) $ 125,231,986 Foreign currency at value (Identified cost $15,369) 15,769 Cash 46,291 Receivables Investment securities sold 1,887,563 Dividends 393,590 Tax reclaims 52,595 Fund shares sold 10,454 Trustee retainer 1,747 Prepaid expenses 19,764 -------------- Total assets 127,659,759 -------------- LIABILITIES Payables Investment securities purchased 1,868,854 Fund shares repurchased 62,772 Upon return of securities loaned 14,528,306 Investment advisory fee 66,691 Transfer agent fee 43,312 Distribution and service fees 27,182 Financial agent fee 11,634 Other accrued expenses 46,763 -------------- Total liabilities 16,655,514 -------------- NET ASSETS $ 111,004,245 ============== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $ 103,828,139 Undistributed net investment income 729,981 Accumulated net realized loss (5,938,255) Net unrealized appreciation 12,384,380 -------------- NET ASSETS $ 111,004,245 ============== CLASS A Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $102,782,749) 10,428,029 Net asset value per share $ 9.86 Offering price per share $9.86/(1-5.75%) $10.46 CLASS B Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $5,395,384) 600,977 Net asset value and offering price per share $ 8.98 CLASS C Shares of beneficial interest outstanding, no par value, unlimited authorization (Net Assets $2,826,112) 315,856 Net asset value and offering price per share $ 8.95 STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 2006 INVESTMENT INCOME Dividends $ 2,663,752 Interest 92,108 Security lending 18,784 Foreign taxes withheld (155,221) -------------- Total investment income 2,619,423 -------------- EXPENSES Investment advisory fee 941,846 Service fees, Class A 256,034 Distribution and service fees, Class B 53,605 Distribution and service fees, Class C 30,311 Financial agent fee 116,377 Transfer agent 256,274 Custodian 87,971 Printing 51,067 Registration 45,146 Professional 37,739 Trustees 29,316 Miscellaneous 43,736 -------------- Total expenses 1,949,422 Less advisory fees waived (110,805) Custodian fees paid indirectly (800) -------------- Net expenses 1,837,817 -------------- NET INVESTMENT INCOME (LOSS) 781,606 -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments 20,678,330 Net realized gain (loss) on foreign currency transactions 17,641 Net change in unrealized appreciation (depreciation) on investments (2,602,687) Net change in unrealized appreciation (depreciation) on foreign currency transactions and translation 8,075 -------------- NET GAIN (LOSS) ON INVESTMENTS 18,101,359 -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 18,882,965 ============== See Notes to Financial Statements 57 PHOENIX WORLDWIDE STRATEGIES FUND STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended June 30, 2006 June 30, 2005 -------------- -------------- FROM OPERATIONS Net investment income (loss) $ 781,606 $ 1,036,568 Net realized gain (loss) 20,695,971 7,786,341 Net change in unrealized appreciation (depreciation) (2,594,612) 1,868,312 -------------- -------------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 18,882,965 10,691,221 -------------- -------------- FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class A (1,060,641) (1,259,036) Net investment income, Class B (24,338) (32,323) Net investment income, Class C (14,105) (18,474) -------------- -------------- DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (1,099,084) (1,309,833) -------------- -------------- FROM SHARE TRANSACTIONS CLASS A Proceeds from sales of shares (281,495 and 451,797 shares, respectively) 2,664,621 3,693,803 Net asset value of shares issued from reinvestment of distributions (104,432 and 133,507 shares, respectively) 961,829 1,122,793 Cost of shares repurchased (1,940,792 and 2,538,875 shares, respectively) (17,756,568) (20,564,708) -------------- -------------- Total (14,130,118) (15,748,112) -------------- -------------- CLASS B Proceeds from sales of shares (96,403 and 114,451 shares, respectively) 825,530 863,208 Net asset value of shares issued from reinvestment of distributions (2,804 and 3,950 shares, respectively) 23,607 30,419 Cost of shares repurchased (164,735 and 301,329 shares, respectively) (1,405,383) (2,225,452) -------------- -------------- Total (556,246) (1,331,825) -------------- -------------- CLASS C Proceeds from sales of shares (37,167 and 40,869 shares, respectively) 296,486 304,320 Net asset value of shares issued from reinvestment of distributions (1,425 and 1,921 shares, respectively) 11,952 14,756 Cost of shares repurchased (100,035 and 135,956 shares, respectively) (842,147) (992,548) -------------- -------------- Total (533,709) (673,472) -------------- -------------- INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (15,220,073) (17,753,409) -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS 2,563,808 (8,372,021) NET ASSETS Beginning of period 108,440,437 116,812,458 -------------- -------------- END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $729,981 AND $547,673, RESPECTIVELY) $ 111,004,245 $ 108,440,437 ============== ==============
58 See Notes to Financial Statements PHOENIX WORLDWIDE STRATEGIES FUND FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A -------------------------------------------------------------------------- YEAR ENDED JUNE 30, -------------------------------------------------------------------------- 2006 2005 2004 2003 2002 Net asset value, beginning of period $ 8.38 $ 7.72 $ 6.37 $ 7.03 $ 7.87 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) 0.07 0.08 0.03 0.05 0.03 Net realized and unrealized gain (loss) 1.51 0.68 1.41 (0.71) (0.84) ----------- ----------- ----------- ----------- ----------- TOTAL FROM INVESTMENT OPERATIONS 1.58 0.76 1.44 (0.66) (0.81) ----------- ----------- ----------- ----------- ----------- LESS DISTRIBUTIONS Dividends from net investment income (0.10) (0.10) (0.09) -- -- Distributions from net realized gains -- -- -- -- (0.03) ----------- ----------- ----------- ----------- ----------- TOTAL DISTRIBUTIONS (0.10) (0.10) (0.09) -- (0.03) ----------- ----------- ----------- ----------- ----------- Change in net asset value 1.48 0.66 1.35 (0.66) (0.84) ----------- ----------- ----------- ----------- ----------- NET ASSET VALUE, END OF PERIOD $ 9.86 $ 8.38 $ 7.72 $ 6.37 $ 7.03 =========== =========== =========== =========== =========== Total return(2) 18.90% 9.80% 22.65% (9.39)% (10.35)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 102,783 $ 100,469 $ 107,520 $ 98,135 $ 125,216 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.60% 1.57% 1.62% 1.73 % 1.56 % Gross operating expenses 1.70% 1.57% 1.62% 1.73 % 1.56 % Net investment income (loss) 0.76% 0.97% 0.46% 0.81 % 0.39 % Portfolio turnover 124% 49% 122% 160 % 99 %
CLASS B -------------------------------------------------------------------------- YEAR ENDED JUNE 30, -------------------------------------------------------------------------- 2006 2005 2004 2003 2002 Net asset value, beginning of period $ 7.65 $ 7.05 $ 5.81 $ 6.46 $ 7.29 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) --(3) 0.02 (0.02) --(3) (0.03) Net realized and unrealized gain (loss) 1.37 0.63 1.28 (0.65) (0.77) ----------- ----------- ----------- ----------- ----------- TOTAL FROM INVESTMENT OPERATIONS 1.37 0.65 1.26 (0.65) (0.80) ----------- ----------- ----------- ----------- ----------- LESS DISTRIBUTIONS Dividends from net investment income (0.04) (0.05) (0.02) -- -- Distributions from net realized gains -- -- -- -- (0.03) ----------- ----------- ----------- ----------- ----------- TOTAL DISTRIBUTIONS (0.04) (0.05) (0.02) -- (0.03) ----------- ----------- ----------- ----------- ----------- Change in net asset value 1.33 0.60 1.24 (0.65) (0.83) ----------- ----------- ----------- ----------- ----------- NET ASSET VALUE, END OF PERIOD $ 8.98 $ 7.65 $ 7.05 $ 5.81 $ 6.46 =========== =========== =========== =========== =========== Total return(2) 17.92% 9.14% 21.78 % (10.20)% (10.90)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 5,395 $ 5,096 $ 5,987 $ 6,730 $ 9,119 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.35% 2.32% 2.37 % 2.48 % 2.31 % Gross operating expenses 2.45% 2.32% 2.37 % 2.48 % 2.31 % Net investment income (loss) 0.01% 0.23% (0.34)% 0.04 % (0.38)% Portfolio turnover 124% 49% 122 % 160 % 99 %
(1) Computed using average shares outstanding. (2) Sales charges are not reflected in the total return calculation. (3) Amount is less than $0.01. See Notes to Financial Statements 59 PHOENIX WORLDWIDE STRATEGIES FUND FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C -------------------------------------------------------------------------- YEAR ENDED JUNE 30, -------------------------------------------------------------------------- 2006 2005 2004 2003 2002 Net asset value, beginning of period $ 7.62 $ 7.03 $ 5.80 $ 6.45 $ 7.28 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) --(3) 0.02 (0.01) (0.01) (0.03) Net realized and unrealized gain (loss) 1.37 0.62 1.27 (0.64) (0.77) ----------- ----------- ----------- ----------- ----------- TOTAL FROM INVESTMENT OPERATIONS 1.37 0.64 1.26 (0.65) (0.80) ----------- ----------- ----------- ----------- ----------- LESS DISTRIBUTIONS Dividends from net investment income (0.04) (0.05) (0.03) -- -- Distributions from net realized gains -- -- -- -- (0.03) ----------- ----------- ----------- ----------- ----------- TOTAL DISTRIBUTIONS (0.04) (0.05) (0.03) -- (0.03) ----------- ----------- ----------- ----------- ----------- Change in net asset value 1.33 0.59 1.23 (0.65) (0.83) ----------- ----------- ----------- ----------- ----------- NET ASSET VALUE, END OF PERIOD $ 8.95 $ 7.62 $ 7.03 $ 5.80 $ 6.45 =========== =========== =========== =========== =========== Total return(2) 17.99 % 9.03% 21.66 % (10.08)% (11.06)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $ 2,826 $ 2,876 $ 3,306 $ 2,407 $ 3,811 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.35 % 2.32% 2.37 % 2.48 % 2.31 % Gross operating expenses 2.45 % 2.32% 2.37 % 2.48 % 2.31 % Net investment income (loss) (0.03)% 0.22% (0.18)% (0.10)% (0.39)% Portfolio turnover 124 % 49% 122 % 160 % 99 %
(1) Computed using average shares outstanding. (2) Sales charges are not reflected in the total return calculation. (3) Amount is less than $0.01. 60 See Notes to Financial Statements PHOENIX EQUITY TRUST NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 1. ORGANIZATION Phoenix Equity Trust (the "Trust") is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Currently five funds are offered for sale (each a "Fund"). The Phoenix Mid-Cap Value Fund ("Mid-Cap Value Fund") is diversified and has an investment objective of long-term growth of capital. The Phoenix Pathfinder Fund ("Pathfinder Fund") is diversified and has an investment objective of long-term capital appreciation. The Phoenix Relative Value Fund ("Relative Value Fund") is diversified and has an investment objective of long-term capital appreciation. The Phoenix Total Value Fund ("Total Value Fund") is diversified and has an investment objective of long-term capital appreciation. The Phoenix Worldwide Strategies Fund ("Worldwide Strategies Fund") is diversified and has an investment objective of capital appreciation. The Funds offer the following classes of shares for sale: Class A Class B Class C ------- ------- ------- Mid-Cap Value Fund............ X -- X Pathfinder Fund............... X -- X Relative Value Fund........... X -- X Total Value Fund.............. X -- X Worldwide Strategies Fund..... X X X Class A shares are sold with a front-end sales charge of up to 5.75%. Generally, Class A shares are not subject to any charges by the funds when redeemed; however, a 1% contingent deferred sales charge may be imposed on certain redemptions within one year on purchases on which a finder's fee has been paid. Class B shares are sold with a contingent deferred sales charge, which declines from 5% to zero depending on the period of time the shares are held. Class C shares are sold with a 1% contingent deferred sales charge if redeemed within one year of purchase. Each class of shares has identical voting, dividend, liquidation and other rights and the same terms and conditions, except that each class bears different distribution and/or service expenses and has exclusive voting rights with respect to its distribution plan. Income and expenses and realized and unrealized gains and losses of each Fund are borne pro rata by the holders of each class of shares. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. A. SECURITY VALUATION: Equity securities are valued at the official closing price (typically last sale) on the exchange on which the securities are primarily traded, or if no closing price is available, at the last bid price. Debt securities are valued on the basis of broker quotations or valuations provided by a pricing service, which utilizes information with respect to recent sales, market transactions in comparable securities, quotations from dealers, and various relationships between securities in determining value. As required, some securities and assets may be valued at fair value as determined in good faith by or under the direction of the Trustees. Certain foreign common stocks may be fair valued in cases where closing prices are not readily available or are deemed not reflective of readily available market prices. For example, significant events (such as movement in the U.S. securities market, or other regional and local developments) may occur between the time that foreign markets close (where the security is principally traded) and the time that the Fund calculates its net asset value (generally, the close of the NYSE) that may impact the value of securities traded in these foreign markets. In these cases, information from an external vendor may be utilized to adjust closing market prices of certain foreign common stocks to reflect their fair value. Because the frequency of significant events is not predictable, fair valuation of certain foreign common stocks may occur on a frequent basis. Short-term investments having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market. B. SECURITY TRANSACTIONS AND RELATED INCOME: Security transactions are recorded on the trade date. Dividend income is recorded on the ex-dividend date, or in the case of certain foreign securities, as soon as the Fund is notified. Interest income is recorded on the accrual basis. Each Fund amortizes premiums and accretes discounts using the effective interest method. Realized gains and losses are determined on the identified cost basis. C. INCOME TAXES: Each Fund is treated as a separate taxable entity. It is the policy of each Fund in the Trust to comply with the requirements of the Internal Revenue Code and to distribute substantially all of its taxable income to its sharehol ders. Therefore, no provision for federal income taxes or excise taxes has been made. The Trust may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Each Fund will accrue such taxes and recoveries as applicable based upon current interpretations of the tax rules and regulations that exist in the markets in which they invest. In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes." This standard defines the threshold for recognizing See Notes to Financial Statements 61 PHOENIX EQUITY TRUST NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 (CONTINUED) the benefits of tax-return positions in the financial statements as "more-likely-than-not" to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50 percent likely to be realized. FIN 48 is effective as of the beginning of the first fiscal year beginning after December 15, 2006 (January 1, 2007 for calendar-year companies), with early application permitted if no interim financial statements have been issued. At adoption, companies must adjust their financial statements to reflect only those tax positions that are more likely- than-not to be sustained as of the adoption date. As of June 30, 2006, the Funds have not completed their evaluation of the impact that will result from adopting FIN 48. D. DISTRIBUTIONS TO SHAREHOLDERS: Distributions are recorded by each Fund on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences may include the treatment of non-taxable dividends, market premium and discount, non-deductible expenses, expiring capital loss carryovers, foreign currency gain or loss, gain or loss on futures contracts, partnerships, operating losses and losses deferred due to wash sales. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to capital paid in on shares of beneficial interest. E. EXPENSES: Expenses incurred by the Trust with respect to more than one Fund are allocated in proportion to the net assets of each Fund, except where allocation of direct expense to each Fund or an alternative allocation method can be more appropriately made. F. FOREIGN CURRENCY TRANSLATION: Foreign securities and other assets and liabilities are valued using the foreign currency exchange rate effective at the end of the reporting period. Cost of investments is translated at the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement date of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise, the gain or loss resulting from a change in currency exchange rates between the date income is accrued and paid is treated as a gain or loss on foreign currency. The Trust does not isolate that portion of the results of operations arising from either changes in exchange rates or in the market prices of securities. G. FOREIGN SECURITY COUNTRY DETERMINATION: A combination of the following criteria is used to assign the countries of risk listed in the schedules of investments: country of incorporation, actual building address, primary exchange on which the security is traded and country in which the greatest percentage of company revenue is generated. H. SECURITIES LENDING: Certain Funds may loan securities to qualified brokers through an agreement with State Street Bank and Trust (the "Custodian"). Under the terms of the agreement, the Fund receives collateral with a market value not less than 100% of the market value of loaned securities. Collateral is adjusted daily in connection with changes in the market value of securities on loan. Collateral may consist of cash, securities issued or guaranteed by the U.S. Government or its agencies and the sovereign debt of foreign countries. Cash collateral has been invested in a short-term money market fund. Dividends earned on the collateral and premiums paid by the borrower are recorded as income by the Fund net of fees and rebates charged by the Custodian for its services in connection with this securities lending program. Lending portfolio securities involves a risk of delay in the recovery of the loaned securities or in the foreclosure on collateral. I. REIT INVESTMENTS: Dividend income is recorded using management's estimate of the income included in distributions received from the REIT investments. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts. 3. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS As compensation for its services to the Trust, the Adviser, Phoenix Investment Counsel, Inc. ("PIC") (the "Adviser"), 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 for the Mid-Cap Value Fund; and for the Pathfinder Fund, Relative Value Fund, and Total Value Fund PIC is entitled to a fee at an annual rate of 0.80% of each fund's average daily net assets. For the Worldwide Strategies Fund, PIC is entitled to a fee based on the following percentages of the fund's average daily net assets: 1st $1 $1-2 $2+ Billion Billion Billion --------- --------- --------- 0.85% 0.80% 0.75% For the Worldwide Strategies Fund, PIC has contractually agreed to waive investment advisory fees in the amount of 0.10% through September 30, 2006. The Adviser has contractually agreed to limit each Fund's operating expenses (excluding interest, taxes and extraordinary expenses) through October 31, 2006, so that such expenses do not exceed the following percentages of average annual net assets. 62 PHOENIX EQUITY TRUST NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 (CONTINUED) Class A Class C --------- --------- Mid-Cap Value Fund...................... 1.25% 2.00% Pathfinder Fund......................... 1.40% 2.15% Relative Value Fund..................... 1.40% 2.15% Total Value Fund........................ 1.40% 2.15% The Adviser will not seek to recapture any prior years' operating expenses reimbursed or waived investment advisory fees. Sasco Capital, Inc. ("Sasco") is the subadviser to the Mid-Cap Value Fund. For its services, PIC pays Sasco a fee which is calculated at the annual rate of 47.5% of the gross investment management fee. Acadian Asset Management, Inc. ("Acadian") is the subadviser to the Pathfinder Fund. For its services, PIC pays Acadian a fee which is calculated at a rate equal to 50% of the gross investment management fee. Golden Capital Management, LLC ("Golden") is the subadviser to the Relative Value Fund. For its services, PIC pays Golden a fee based on the assets managed by Golden as follows: 1st $50 Greater than Million $50 Million --------- -------------- Subadvisory Fee......................... 0.45% 0.40% Acadian is one of three subadvisers to the Total Value Fund. For its services, PIC pays Acadian a fee on the assets managed by Acadian which is calculated at a rate equal to 50% of the gross investment management fee. Golden is one of three subadvisers to the Total Value Fund. For its services, PIC pays Golden a fee on the assets managed by Golden as follows: 1st $50 Greater than Million $50 Million --------- -------------- Subadvisory Fee......................... 0.45% 0.40% Harris Investment Management, Inc. ("Harris" ) is one of three subadvisers to the Total Value Fund. For its services, PIC pays Harris a fee on the assets managed by Harris as follows: 1st $25 Greater than Million $25 Million --------- -------------- Subadvisory Fee......................... 0.50% 0.40% Acadian and New Star Institutional Managers Limited ("New Star") are subadvisers to the international portion of the Worldwide Strategies Fund. For its services, PIC pays Acadian a fee on the aggregated international assets managed by Acadian across all Phoenix Funds subadvised by Acadian as follows: 1st $200 $200-500 Greater than Million Million $500 Million ---------- ---------- -------------- Subadvisory Fee................... 0.50% 0.40% 0.35% For its services, PIC pays New Star a fee on the aggregated international assets managed by New Star across all Phoenix Funds subadvised by New Star as follows: 1st $100 Greater than Million $100 Million ---------- -------------- Subadvisory Fee........................ 0.50% 0.40% Engemann Asset Management ("Engemann") is the subadviser for the domestic portion of the Worldwide Strategies Fund. For its services, PIC pays Engemann a fee on the assets managed by Engemann calculated at a rate equal to 50% of the gross investment management fee. As distributor of each Fund's shares, Phoenix Equity Planning Corporation ("PEPCO") an indirect wholly-owned subsidiary of PNX, has advised the Funds that it retained net selling commissions and deferred sales charges for the fiscal year (the "period") ended June 30, 2006, as follows:
Class A Class A Class B Class C Net Selling Deferred Deferred Deferred Commissions Sales Charges Sales Charges Sales Charges ----------- ------------- ------------- ------------- Mid-Cap Value Fund ...... $ 115,075 $ 36 $ -- $ 50,782 Pathfinder Fund ......... 12 3 -- 49 Relative Value Fund ..... 287 -- -- 241 Total Value Fund ........ 313 -- -- 1 Worldwide Strategies Fund 3,529 -- 6,070 213
In addition, each Fund pays PEPCO distribution and/or service fees at an annual rate of 0.25% for Class A shares, 1.00% for Class B shares and 1.00% for Class C shares applied to the average daily net assets of each respective Class. 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 Trust, PEPCO receives a financial agent fee equal to the sum of (1) the documented cost to PEPCO to provide oversight of the performance of PFPC Inc. (subagent to PEPCO), plus (2) the documented cost of fund accounting, tax services and related services provided by PFPC Inc. For the period ended June 30, 2006, the Trust incurred financial agent fees totaling $399,831. PEPCO serves as the Trust's transfer agent with State Street Bank and Trust Company serving as subtransfer agent. For the period ended June 30, 2006, transfer agent fees were $845,979 as reported in the Statements of Operations, of which PEPCO retained the following: Transfer Agent Fee Retained ---------------- Mid-Cap Value Fund......................... $ 162,140 Worldwide Strategies Fund.................. 88,958 63 PHOENIX EQUITY TRUST NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 (CONTINUED) At June 30, 2006, PNX and its affiliates, the retirement plans of PNX and its affiliates, and Phoenix affiliated Funds held shares which aggregated the following: Aggregate Net Shares Asset Value ----------- --------------- Mid-Cap Value Fund Class A ............... 333,864 $ 7,251,526 Mid-Cap Value Fund Class C ............... 919 19,786 Pathfinder Fund Class A .................. 190,689 2,135,717 Pathfinder Fund Class C .................. 10,005 111,856 Relative Value Fund Class A .............. 190,187 1,932,300 Relative Value Fund Class C .............. 10,000 101,000 Total Value Fund Class A ................. 2,519,179 27,282,709 Total Value Fund Class C ................. 30,000 323,700 4. PURCHASES AND SALES OF SECURITIES Purchases and sales of securities (excluding U.S. Government and agency securities and short-term securities) during the period ended June 30, 2006, were as follows: Purchases Sales -------------- -------------- Mid-Cap Value Fund ....................... $168,323,641 $ 35,349,152 Pathfinder Fund .......................... 6,562,681 3,508,632 Relative Value Fund ...................... 3,113,087 775,320 Total Value Fund ......................... 45,374,696 19,436,542 Worldwide Strategies Fund ................ 134,213,983 146,850,393 There were no purchases or sales of long-term U.S. Government and agency securities for the period ended June 30, 2006. 5. 10% SHAREHOLDERS At June 30, 2006, certain Funds had individual shareholder accounts and/or omnibus shareholder accounts (which are comprised of a group of individual shareholders), which individually amounted to more than 10% of the total shares outstanding of the fund as detailed below. Some of the shareholders are affiliated with PNX. % of Shares Outstanding ------------- Mid-Cap Value Fund ....................... 11.4% Pathfinder Fund .......................... 83.8 Relative Value Fund ...................... 80.8 Total Value Fund ......................... 93.1 6. ASSET CONCENTRATIONS In countries with limited or developing markets, investments may present greater risks than in more developed markets and the prices of such investments may be volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of these investments and the income they generate, as well as a Fund's ability to repatriate such amounts. Certain Funds may invest a high percentage of their assets in specific sectors of the market in their pursuit of a greater investment return. Fluctuations in these sectors of concentration may have a greater impact on a Fund, positive or negative, than if a Fund did not concentrate its investments in such sectors. At June 30, 2006, the Pathfinder Fund, the Relative Value Fund and the Total Value Fund held securities issued by various companies in the financial sector comprising 34%, 25% and 33% of the total net assets of each Fund, respectively. The Worldwide Strategies Fund held securities issued by various companies from the United States comprising 34% of the total net assets of the Fund. 7. INDEMNIFICATIONS Under the Funds' organizational documents, their trustees and officers are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, the Funds enter into contracts that contain a variety of indemnifications. The Funds' maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. 8. REGULATORY EXAMS Federal and state regulatory authorities from time to time make inquiries and conduct examinations regarding compliance by The Phoenix Companies, Inc. and its subsidiaries (collectively "the Company") with securities and other laws and regulations affecting their registered products. During 2004 and 2005, the Boston District Office of the Securities and Exchange Commission ("SEC") conducted an examination of the Company's investment company and investment adviser affiliates. Following the examination, the staff of the Boston District Office issued a deficiency letter noting perceived weaknesses in procedures for monitoring trading to prevent market timing activity prior to 2004. The staff requested the Company to conduct an analysis as to whether shareholders, policyholders and contract holders who invested in the funds that may have been affected by undetected market timing activity had suffered harm and to advise the staff whether the Company believes reimbursement is necessary or appropriate under the circumstances. Market timing is an investment technique involving frequent short-term trading of mutual fund shares that is designed to exploit market movements or inefficiencies in the way mutual fund companies price their shares. A third party was retained to assist the Company in preparing the analysis. In 2005, based on the third party analysis the Company notified the staff at the SEC Boston District Office that reimbursements were not appropriate under the circumstances. The Company does not believe that the outcome of this matter will be material to these financial statements. 64 PHOENIX EQUITY TRUST FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 (CONTINUED) 9. FEDERAL INCOME TAX INFORMATION The Funds have capital loss carryovers which may be used to offset future capital gains, as follows: Expiration Year 2011 2014 Total ------------ ------------ ------------ Relative Value Fund ............ $ $ 5,717 $ 5,717 Worldwide Strategies Fund ........................ 5,610,006 -- 5,610,006 The Funds may not realize the benefit of these losses to the extent each Fund does not realize gains on investments prior to the expiration of the capital loss carryovers. For the period ended June 30, 2006, the Funds utilized losses deferred in prior years against current year capital gains as follows: Mid-Cap Value Fund ............. $ 70,344 Worldwide Strategies Fund ........................ 20,357,135 Under current tax law, foreign currency and capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For period ended June 30, 2006, the Funds deferred and recognized post-October losses as follows: Capital Loss Currency Loss Deferred Recognized --------------- --------------- Relative Value Fund ...................... $32,529 $ -- Worldwide Strategies Fund .................................. -- 55,196 The components of distributable earnings on a tax basis (excluding unrealized appreciation (depreciation) which is disclosed in the Schedules of Investments), consist of undistributed ordinary income and undistributed long-term capital gains as follows: Undistributed Undistributed Ordinary Long-Term Income Capital Gains --------------- --------------- Mid-Cap Value Fund ....................... $ 237,042 $1,214,686 Pathfinder Fund .......................... 77,859 315 Relative Value Fund ...................... 64 -- Total Value Fund ......................... 527,207 589 Worldwide Strategies Fund ................ 822,544 -- 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 gain distributions reported in the Statements of Changes in Net Assets, if any, are reported as ordinary income for federal tax purposes. 10. RECLASSIFICATION OF CAPITAL ACCOUNTS For financial reporting purposes, book basis capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Permanent reclassifications can arise from differing treatment of certain income and gain transactions, nondeductible current year net operating losses, expiring capital loss carryovers and investments in passive foreign investment companies. The reclassifications have no impact on the net assets or net asset value of the Funds. For the year ended June 30, 2006, the following Funds recorded reclassifications to increase (decrease) the accounts as listed below: Capital Paid In Accumulated Undistributed on Shares of Net Net Beneficial Realized Investment Interest Gain (Loss) Income (Loss) ----------------- ------------- --------------- Total Value Fund .............. $ (191) $ -- $ 191 Worldwide Strategies Fund ..... -- (499,786) 499,786 - -------------------------------------------------------------------------------- TAX INFORMATION (UNAUDITED) For the fiscal year ended June 30, 2006, for federal income tax purposes, the percentages of the ordinary income dividends earned by the funds qualify for the dividends received deduction for corporate shareholders as detailed below: Mid-Cap Value Fund ............. 100% Pathfinder Fund ................ 55 Relative Value Fund ............ 100 Total Value Fund ............... 77 Worldwide Strategies Fund ...... 56 For the fiscal year ended June 30, 2006, the funds hereby designate the below percentages, or the maximum amount allowable, of its ordinary income dividends to qualify for the lower tax rates applicable to individual shareholders: Mid-Cap Value Fund ............. 100% Pathfinder Fund ................ 54 Relative Value Fund ............ 100 Total Value Fund ............... 76 Worldwide Strategies Fund ...... 100 The actual percentage for the calendar year will be designated in the year-end tax statements. For the fiscal year ended June 30, 2006, the following funds designated long-term capital gains dividends: Mid-Cap Value Fund ............. $1,262,483 Pathfinder Fund ................ 315 Total Value Fund ............... 589 - -------------------------------------------------------------------------------- 65 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PRICEWATERHOUSECOOPERS [LOGO] To the Board of Trustees of Phoenix Equity Trust and Shareholders of: Phoenix Mid-Cap Value Fund Phoenix Pathfinder Fund Phoenix Relative Value Fund Phoenix Total Value Fund and Phoenix Worldwide Strategies Fund In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Phoenix Mid-Cap Value Fund, Phoenix Pathfinder Fund, Phoenix Relative Value Fund, Phoenix Total Value Fund and Phoenix Worldwide Strategies Fund (constituting Phoenix Equity Trust, hereafter referred to as the "Funds") at June 30, 2006, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, 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 Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2006 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Boston, Massachusetts August 22, 2006 66 FUND MANAGEMENT TABLES (UNAUDITED) Information pertaining to the Trustees and officers of the Trust as of June 30, 2006 is set forth below. The statement of additional information (SAI) includes additional information about the Trustees and is available without charge, upon request, by calling (800) 243-4361. The address of each individual, unless otherwise noted, is 56 Prospect Street, Hartford, CT 06115-0480. There is no stated term of office for Trustees of the Trust.
INDEPENDENT TRUSTEES - -------------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX PRINCIPAL OCCUPATION(S) NAME, ADDRESS LENGTH OF OVERSEEN BY DURING PAST 5 YEARS AND AND DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE - -------------------------------------------------------------------------------------------------------------------------------- E. Virgil Conway Served since 71 Chairman, Rittenhouse Advisors, LLC (consulting firm) Rittenhouse Advisors, LLC 1993. (2001-present); Trustee/Director, Phoenix Funds Complex 101 Park Avenue (1983-present); Trustee/Director, Realty Foundation of New York New York, NY 10178 (1972-present); Josiah Macy, Jr. Foundation (Honorary) DOB: 8/2/29 (2004-present); Pace University (Director/Trustee Emeritus) (2003-present), Greater New York Councils, Boy Scouts of America (1985-present); The Academy of Political Science (Vice Chairman) (1985-present), Urstadt Biddle Property Corp. (1989-present), Colgate University (Trustee Emeritus) (2004-present), Director/Trustee, The Harlem Youth Development Foundation (Chairman) (1998-2002); Metropolitan Transportation Authority (Chairman) (1992-2001), Trism, Inc. (1994-2001); Consolidated Edison Company of New York, Inc. (1970-2002), Atlantic Mutual Insurance Company (1974-2002), Centennial Insurance Company (1974-2002), Union Pacific Corp. (1978-2002), BlackRock Freddie Mac Mortgage Securities Fund (Advisory Director) (1990-2000), Accuhealth (1994-2002), Pace University (1978-2003), New York Housing Partnership Development Corp. (Chairman) (1981-2003), Josiah Macy, Jr. Foundation (1975-2004). - -------------------------------------------------------------------------------------------------------------------------------- Harry Dalzell-Payne Served since 71 Retired. Trustee/Director, Phoenix Funds Complex (1983-present). The Flat, Elmore Court 1993. Elmore, GLOS, GL2 3NT U.K. DOB: 9/8/29 - -------------------------------------------------------------------------------------------------------------------------------- Francis E. Jeffries Served since 72 Director, The Empire District Electric Company (1984-2004); 8477 Bay Colony Dr. #902 1995. Trustee/Director, Phoenix Funds Complex (1987-present). Naples, FL 34108 DOB: 9/23/30 - -------------------------------------------------------------------------------------------------------------------------------- Leroy Keith, Jr. Served since 69 Partner, Stonington Partners, Inc. (private equity fund) Stonington Partners, Inc. 1993. (2001-present); Director/Trustee; Evergreen Funds (six 736 Market Street, Ste. 1430 portfolios). Trustee, Phoenix Funds Family (1980-present); Chattanooga, TN 37402 Director, Diversapak (2002-present); Obaji Medical Products DOB: 2/14/39 Company (2002-present); Director, Lincoln Educational Services (2002-2004); Chairman, Carson Products Company (cosmetics) (1998-2000). - --------------------------------------------------------------------------------------------------------------------------------
67 FUND MANAGEMENT TABLES (UNAUDITED) (CONTINUED)
INDEPENDENT TRUSTEES - -------------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX PRINCIPAL OCCUPATION(S) NAME, ADDRESS LENGTH OF OVERSEEN BY DURING PAST 5 YEARS AND AND DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE - -------------------------------------------------------------------------------------------------------------------------------- Geraldine M. McNamara Served since 71 Retired. Trustee/Director, Phoenix Funds Complex (2001-present). 40 East 88th Street 2001. Managing Director, U.S. Trust Company of New York (private bank) New York, NY 10128 (1982-2006). DOB: 4/17/51 - -------------------------------------------------------------------------------------------------------------------------------- James M. Oates(1) Served since 69 Chairman, Hudson Castle Group, Inc. (formerly IBEX Capital c/o Northeast Partners 1993. Markets, Inc.) (financial services) (1997-present); 150 Federal Street, Trustee/Director, Phoenix Funds Family (1987-present); Managing Suite 1000 Director, Wydown Group (consulting firm) (1994-present); Boston, MA 02110 Director, Investors Financial Service Corporation (1995-present); DOB: 5/31/46 Investors Bank & Trust Corporation (1995-present), Stifel Financial (1996-present), Connecticut River Bancorp (1998-present), Connecticut River Bank (1999-present), Trust Company of New Hampshire (2002-present), Chairman, Emerson Investment Management, Inc. (2000-present); Independent Chairman, John Hancock Trust (since 2005); Trustee, John Hancock Funds II and John Hancock Funds III (since 2005); Trustee, John Hancock Trust (2004-2005); Director/Trustee, AIB Govett Funds (six portfolios) (1991-2000); Command Systems, Inc. (1998-2000); Phoenix Investment Partners, Ltd. (1995-2001); 1Mind, Inc. (formerly 1Mind.com) (2000-2002); Plymouth Rubber Co. (1995- 2003), Director and Treasurer, Endowment for Health, Inc. (2000-2004). - -------------------------------------------------------------------------------------------------------------------------------- Richard E. Segerson Served since 69 Managing Director, Northway Management Company (1998-present). 73 Briggs Way 1993. Trustee/ Director, Phoenix Funds Family (1983-present). Chatham, MA 02633 DOB: 2/16/46 - --------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Oates is a Director and Chairman of the Board and a shareholder of Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) ("Hudson"), a privately owned financial services firm. Phoenix Investment Partners, Ltd., an affiliate of the adviser, owns approximately 1% of the common stock of Hudson and Phoenix Life Insurance Company also an affiliate, owns approximately 8% of Hudson's common stock. 68 FUND MANAGEMENT TABLES (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 PORTFOLIOS IN FUND COMPLEX PRINCIPAL OCCUPATION(S) NAME, ADDRESS, LENGTH OF OVERSEEN BY DURING PAST 5 YEARS AND DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE - -------------------------------------------------------------------------------------------------------------------------------- Marilyn E. LaMarche(2) Served since 69 Limited Managing Director, Lazard Freres & Co. LLC Lazard Freres & Co. LLC 2002. (1997-present). Trustee/ Director, Phoenix Funds Family 30 Rockefeller Plaza, (2002-present). Director, The Phoenix Companies, Inc. (2001-2005) 59th Floor and Phoenix Life Insurance Company (1989-2005). New York, NY 10020 DOB: 5/11/34 - -------------------------------------------------------------------------------------------------------------------------------- Philip R. McLoughlin(3) Served since 97 Director, PXRE Corporation (Reinsurance) (1985-present); World 200 Bridge Street 1993. Trust Fund (1991-present), Director/Trustee, Phoenix Funds Chatham, MA 02633 Complex (1989-present); Management Consultant (2002-2004), DOB: 10/23/46 Chairman Chairman (1997-2002), Chief Executive Officer (1995-2002) and Director (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), Chairman (2000-2002) and President (1990-2000), Phoenix Equity Planning Corporation; Chairman and President, Phoenix/Zweig Advisers LLC (2001-2002); Director (2001-2002) and President (April 2002-September 2002), Phoenix Investment Management Company; Director and Executive Vice President, Phoenix Life and Annuity Company (1996-2002); Director (1995-2000), Executive Vice President (1994-2002), and Chief Investment Counsel (1994-2002), PHL Variable Insurance Company; Director, Phoenix National Trust Holding Company (2001-2002); Director (1985-2002), Vice President (1986-2002) and Executive Vice President (April 2002-September 2002), PM Holdings, Inc.; Director, WS Griffith Associates, Inc. (1995-2002); Director, WS Griffith Securities, Inc. (1992-2002). - --------------------------------------------------------------------------------------------------------------------------------
(2) Ms. LaMarche is an "interested person," as defined in the Investment Company Act of 1940, by reason of her former position as Director of The Phoenix Companies, Inc. and Phoenix Life Insurance Company. (3) Mr. McLoughlin is an "interested person," as defined in the Investment Company Act of 1940, by reason of his former relationship with Phoenix Investment Partners, Ltd. and its affiliates. 69 FUND MANAGEMENT TABLES (UNAUDITED) (CONTINUED)
OFFICERS OF THE FUND 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 - -------------------------------------------------------------------------------------------------------------------------------- Daniel T. Geraci President since 2004. Executive Vice President, Asset Management, The Phoenix DOB: 6/12/57 Companies, Inc. (2003-present); Director, Chairman, President and Chief Executive Officer, Phoenix Investment Partners, Ltd. (2003-present); President, Phoenix Equity Planning Corporation (2005-present); President, DPCM Holding, Inc. (2005-present); President, Capital West Asset Management, LLC (2005-present); Director and President, Phoenix Investment Counsel, Inc. (2003-present); Director, Pasadena Capital Corporation (2003-present); President, Euclid Advisers, LLC (2003-present); Director and Chairman, PXP Institutional Markets Group, Ltd. (2003-present); Director and President, Rutherford Financial Corporation (2003-present); Director, DPCM Holding, Inc. (2003- present); President, Phoenix Zweig Advisers, LLC (2003-present); Director and Chairman, Phoenix Equity Planning Corporation (2003-present); Director and Chairman, Duff & Phelps Investment Management Company (2003-present); Director, Capital West Asset Management, LLC (2003-present); Chief Executive Officer and President, The Zweig Fund, Inc. and The Zweig Total Return Fund, Inc. (2004-present); President, the Phoenix Funds Family (2004-present); Chief Sales and Marketing Officer, Phoenix Equity Planning Corporation (2003-2005); President and Chief Executive Officer of North American investment operations, Pioneer Investment Management USA, Inc. (2001-2003); President of Private Wealth Management Group & Fidelity Brokerage Company, Fidelity Investments (1996-2001). - -------------------------------------------------------------------------------------------------------------------------------- George R. Aylward Executive Vice President Senior Vice President and Chief Operating Officer, Asset DOB: 8/17/64 since 2004. Management, The Phoenix Companies, Inc. (2004-present). Executive Vice President and Chief Operating Officer, Phoenix Investment Partners, Ltd. (2004-present). Vice President, Phoenix Life Insurance Company (2002-2004). Vice President, The Phoenix Companies, Inc. (2001-2004). Vice President, Finance, Phoenix Investment Partners, Ltd. (2001-2002). Assistant Controller, Phoenix Investment Partners, Ltd. (1996-2001). Executive Vice President, certain funds within the Phoenix Funds Family (2004-present). - -------------------------------------------------------------------------------------------------------------------------------- Francis G. Waltman Senior Vice President Senior Vice President, Asset Management Product Development, The DOB: 7/27/62 since 2004. Phoenix Companies, Inc. (since 2006), Senior Vice President, Asset Management Product Development, Phoenix Investment Partners, Ltd. (2005-present), Senior Vice President and Chief Administrative Officer, Phoenix Investment Partners, Ltd., (2003-2004). Senior Vice President and Chief Administrative Officer, Phoenix Equity Planning Corporation (1999-2003), Senior Vice President, certain funds within the Phoenix Fund Family (2004-present). - -------------------------------------------------------------------------------------------------------------------------------- Marc Baltuch Vice President and Chief Compliance Officer, Zweig-DiMenna Associates LLC 900 Third Avenue Chief Compliance Officer (1989-present); Vice President and Chief Compliance Officer, New York, NY 10022 since 2004. certain Funds within the Phoenix Fund Complex (2004-present); DOB: 9/23/45 Vice President, The Zweig Total Return Fund, Inc. (2004-present); Vice President, The Zweig Fund, Inc. (2004-present); President and Director of Watermark Securities, Inc. (1991-present); Assistant Secretary of Gotham Advisors Inc. (1990-present); Secretary, Phoenix-Zweig Trust (1989-2003); Secretary, Phoenix-Euclid Market Neutral Fund (1999-2002). - --------------------------------------------------------------------------------------------------------------------------------
70 FUND MANAGEMENT TABLES (UNAUDITED) (CONTINUED)
OFFICERS OF THE FUND 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 - -------------------------------------------------------------------------------------------------------------------------------- Nancy G. Curtiss Senior Vice President since Assistant Treasurer (2001-present), Vice President, Fund DOB: 11/24/52 2006. Accounting (1994-2000), Phoenix Equity Planning Corporation. Vice President, Phoenix Investment Partners, Ltd. (2003-present). Senior Vice President, the Phoenix Funds Family (since 2006). Vice President, The Phoenix Edge Series Fund (1994-present), Treasurer, The Zweig Fund Inc. and the Zweig Total Return Fund Inc. (2003-present). Chief Financial Officer (2005-2006) and Treasurer (1994-2006), or Assistant Treasurer (2005-2006), certain funds within the Phoenix Fund Complex. - -------------------------------------------------------------------------------------------------------------------------------- W. Patrick Bradley Chief Financial Officer and Second Vice President, Fund Administration, Phoenix Equity DOB: 3/2/72 Treasurer since 2006. Planning Corporation (2004-present). Chief Financial Officer and Treasurer (2006-present) or Chief Financial Officer and Treasurer (2005-present), certain funds within the Phoenix Fund Family. Vice President, Chief Financial Officer, Treasurer and Principal Accounting Officer, The Phoenix Edge Series Fund (since 2006). Assistant Treasurer, certain funds within the Phoenix Fund Complex (2004-2006). Senior Manager (2002-2004), Manager (2000-2002), Audit, Deloitte & Touche, LLP. - -------------------------------------------------------------------------------------------------------------------------------- Kevin J. Carr Vice President, Chief Legal Vice President and Counsel, Phoenix Life Insurance Company (May One American Row Officer, Counsel and 2005-present). Vice President, Counsel, Chief Legal Officer and Hartford, CT 06102 Secretary since 2005. Secretary of certain funds within the Phoenix Fund Complex (May DOB: 8/30/54 2005-present). Compliance Officer of Investments and Counsel, Travelers Life & Annuity Company (January 2005-May 2005). Assistant General Counsel, The Hartford Financial Services Group (1999-2005). - --------------------------------------------------------------------------------------------------------------------------------
71 PHOENIX EQUITY TRUST 101 Munson Street Greenfield, MA 01301-9668 TRUSTEES INVESTMENT ADVISER E. Virgil Conway Phoenix Investment Counsel, Inc. Harry Dalzell-Payne 56 Prospect Street Francis E. Jeffries Hartford, CT 06115-0480 Leroy Keith, Jr. Marilyn E. LaMarche PRINCIPAL UNDERWRITER Philip R. McLoughlin, Chairman Geraldine M. McNamara Phoenix Equity Planning Corporation James M. Oates One American Row Richard E. Segerson Hartford, CT 06103-2899 OFFICERS TRANSFER AGENT Daniel T. Geraci, President Phoenix Equity Planning Corporation George R. Aylward, Executive One American Row Vice President Hartford, CT 06103-2899 Nancy G. Curtiss, Senior P.O. Box 5501 Vice President Boston, MA 02206-5501 Francis G. Waltman, Senior Vice President CUSTODIAN Marc Baltuch, Vice President and Chief Compliance Officer State Street Bank and Trust Company W. Patrick Bradley, Chief Financial P.O. Box 5501 Officer and Treasurer Boston, MA 02206-5501 Kevin J. Carr, Vice President, Chief Legal Officer, INDEPENDENT REGISTERED PUBLIC Counsel and Secretary ACCOUNTING FIRM PricewaterhouseCoopers LLP 125 High Street Boston, MA 02110-1707 HOW TO CONTACT US Mutual Fund Services 1-800-243-1574 Advisor Consulting Group 1-800-243-4361 Telephone Orders 1-800-367-5877 Text Telephone 1-800-243-1926 Web site PHOENIXFUNDS.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.) (This page has been left blank intentionally.) (This page has been left blank intentionally.) --------------- PRESORTED STANDARD U.S. POSTAGE PAID [LOGO] PHOENIXFUNDS(SM) Louisville, KY Permit No. 1051 PHOENIX EQUITY PLANNING CORPORATION --------------- P.O. Box 150480 Hartford, CT 06115-0480 For more information about Phoenix mutual funds, please call your financial representative, contact us at 1-800-243-1574 or visit PHOENIXFUNDS.COM. NOT INSURED BY FDIC/NCUSIF OR ANY FEDERAL GOVERNMENT AGENCY. NO BANK GUARANTEE. NOT A DEPOSIT. MAY LOSE VALUE. PXP758 8-06 BPD27016 ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics described in Item 2(b) of the instructions for completion of Form N-CSR. (d) The registrant has not granted any waivers, during the period covered by this report, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of the instructions for completion of this Item. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a)(1) The Registrant's Board of Trustees has determined that the Registrant has an "audit committee financial expert" serving on its Audit Committee. (a)(2) E. Virgil Conway has been determined by the Registrant to possess the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an "audit committee financial expert." Mr. Conway is an "independent" trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. (a)(3) Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Audit Fees - ---------- (a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $138,600 for 2006 and $38,500 for 2005. 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 2006 and $0 for 2005. 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 $22,850 for 2006 and $11,050 for 2005. "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 2006 and $0 for 2005. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. The Phoenix 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) Not applicable for 2006 and not applicable for 2005 (c) 100% for 2006 and 100% for 2005 (d) Not applicable for 2006 and not applicable for 2005. (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 $838,527 for 2006 and $1,845,949 for 2005. (h) The registrant's audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Phoenix Equity Trust ----------------------------------------------------------------- By (Signature and Title)* /s/ George R. Aylward ---------------------------------------------------- George R. Aylward, Executive Vice President (principal executive officer) Date September 5, 2006 ------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ George R. Aylward ---------------------------------------------------- George R. Aylward, Executive Vice President (principal executive officer) Date September 5, 2006 ------------------------------------------------------------------------- By (Signature and Title)* /s/ W. Patrick Bradley ---------------------------------------------------- W. Patrick Bradley, Chief Financial Officer and Treasurer (principal financial officer) Date September 5, 2006 ------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CODE ETH 2 g32138_codeeth.txt CODE OF ETHICS EX-99.CODE ETH CODE OF ETHICS FOR CHIEF EXECUTIVE AND SENIOR FINANCIAL OFFICERS The Phoenix mutual funds(1) (each, and collectively, a "FUND") is committed to conducting business in accordance with applicable laws, rules and regulations and the highest standards of business ethics, and to full and accurate disclosure -- financial and otherwise -- in compliance with applicable law. This Code of Ethics, applicable to each Fund's Chief Executive Officer, President, Chief Financial Officer and Treasurer (or persons performing similar functions) (together, "SENIOR OFFICERS"), sets forth policies to guide you in the performance of your duties. As a Senior Officer, you must comply with applicable law. You also have a responsibility to conduct yourself in an honest and ethical manner. You have leadership responsibilities that include creating a culture of high ethical standards and a commitment to compliance, maintaining a work environment that encourages the internal reporting of compliance concerns and promptly addressing compliance concerns. This Code of Ethics recognizes that the Senior Officers are subject to certain conflicts of interest inherent in the operation of investment companies, because the Senior Officers (in addition to their role as senior officers of the Fund) currently or may in the future serve as officers or employees of a Phoenix investment adviser(2) (the "ADVISER"), Phoenix Investment Partners, Ltd., The Phoenix Companies, Inc. or other affiliates thereof (collectively, "PHOENIX") and as officers or trustees/directors of other registered investment companies and unregistered investment funds advised by Phoenix. This Code of Ethics also recognizes that certain laws and regulations applicable to, and certain policies and procedures adopted by, the Fund, the Adviser or - ---------------------- (1) Phoenix Funds (which include Phoenix Equity Series Fund, Phoenix Equity Trust, Phoenix-Goodwin California Tax-Exempt Bond Fund, Phoenix Institutional Mutual Funds, Phoenix Investment Trust 97, Phoenix Multi-Portfolio Fund, Phoenix Multi-Series Trust, Phoenix-Oakhurst Income & Growth Fund, Phoenix-Oakhurst Strategic Allocation Fund, Phoenix Partners Select Funds, Phoenix Portfolios, Phoenix Series Fund, and Phoenix Strategic Equity Series Fund), the Phoenix Partners Funds (which includes Phoenix-Kayne Funds and Phoenix-Seneca Funds), The Phoenix Edge Series Fund ("PESF"); and, The Phoenix-Engemann Funds ("Engemann Funds"). (2) Phoenix Investment Counsel, Inc. ("PIC"), Duff & Phelps Investment Management Co. ("DPIM"), Engemann Asset Management ("EAM"), Euclid Advisors LLC ("EAL"), Kayne Anderson Rudnick Investment Management LLC ("KAR"), Phoenix Variable Advisors, Inc. ("PVA"), Seneca Capital Management, LLC ("SCM"), Phoenix/Zweig Advisers LLC ("PZA") Phoenix govern your conduct in connection with many of the conflict of interest situations that arise in connection with the operations of the Fund, including: o the Investment Company Act of 1940, as amended, and the rules and regulation promulgated thereunder by the Securities and Exchange Commission (the "1940 ACT"); o the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder by the Securities and Exchange Commission (the "ADVISERS ACT"); o the Code of Ethics adopted by the Fund pursuant to Rule 17j-1(c) under the 1940 Act (collectively, the "FUND'S 1940 ACT CODE OF ETHICS"); o one or more codes of ethics adopted by the Adviser that have been reviewed and approved by those trustees (the "TRUSTEES") of the Fund that are not "INTERESTED PERSONS" of the Fund (the "INDEPENDENT TRUSTEES") within the meaning of the 1940 Act (the "ADVISER'S 1940 ACT CODE OF ETHICS" and, together with the Fund's 1940 Act Code of Ethics, the "1940 ACT CODES OF ETHICS"); o the policies and procedures adopted by the Fund to address conflict of interest situations, such as procedures under Rule 10f-3 and Rule 17a-7 under the 1940 Act (collectively, the "FUND POLICIES"); and o each Adviser's general policies and procedures to address, among other things, conflict of interest situations and related matters (collectively, the "ADVISER POLICIES"). The provisions of the 1940 Act, the Advisers Act, the 1940 Act Codes of Ethics, the Fund Policies and the Adviser Policies are referred to herein collectively as the "ADDITIONAL CONFLICT RULES". This Code of Ethics is different from, and is intended to supplement, the Additional Conflict Rules. Accordingly, a violation of the Additional Conflict Rules by a Senior Officer is hereby deemed not to be a violation of this Code of Ethics, unless and until the Board of Trustees of the Fund (the "BOARD") shall determine that any such violation of the Additional Conflict Rules is also a violation of this Code of Ethics. SENIOR OFFICERS SHOULD ACT HONESTLY AND CANDIDLY Each Senior Officer has a responsibility to the Fund to act with integrity. Integrity requires, among other things, being honest and candid. Deceit and subordination of principle are inconsistent with integrity. Each Senior Officer must: o act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law or the Additional Conflict Rules; o not withhold any relevant information; o comply with the laws, rules and regulations that govern the conduct of the Fund's operations and report any suspected violations thereof in accordance with the section below entitled "Compliance With Code Of Ethics"; and o adhere to a high standard of business ethics. CONFLICTS OF INTEREST A conflict of interest for the purpose of this Code of Ethics occurs when your private interests interfere in any way, or even appear to interfere, with the interests of the Fund. Senior Officers are expected to use objective and unbiased standards when making decisions that affect the Fund, keeping in mind that Senior Officers are subject to certain inherent conflicts of interest because Senior Officers of a Fund also are or may be officers of the Adviser and other funds advised or serviced by Phoenix (as a result of which it is incumbent upon you to be familiar with and to seek to comply with the Additional Conflict Rules). You are required to conduct the business of the Fund in an honest and ethical manner, including the ethical handling of actual or apparent conflicts of interest between personal and business relationships. When making any investment, accepting any position or benefits, participating in any transaction or business arrangement or otherwise acting in a manner that creates or appears to create a conflict of interest with respect to the Fund where you are receiving a personal benefit, you should act in accordance with the letter and spirit of this Code of Ethics. If you are in doubt as to the application or interpretation of this Code of Ethics to you as a Senior Officer of the Fund, you should make full disclosure of all relevant facts and circumstances to the Chief Compliance Officer of the Fund (the "CHIEF COMPLIANCE OFFICER") and obtain the prior approval of the Chief Compliance Officer prior to taking or not taking action. Some conflict of interest situations that should always be approved by the Chief Compliance Officer, if material, include the following: o the receipt of any entertainment or non-nominal gift by the Senior Officer, or a member of his or her family, from any company with which the Fund has current or prospective business dealings (other than the Adviser or Phoenix), unless such entertainment or gift is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers, other than the Adviser or Phoenix; or o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Senior Officer's employment by the Adviser or Phoenix, such as compensation or equity ownership. Nominal gifts in the aggregate may rise to create a conflict of interest. In the event that you are involved in any of these situations, you should immediately disclose the situation to the Chief Compliance Officer and to Counsel for the independent trustees. The Chief Compliance Officer will disclose the situation to the full Board. DISCLOSURES It is the policy of the Fund to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws and regulations in all reports and documents that the Fund files with, or submits to, the Securities and Exchange Commission or a national securities exchange and in all other public communications made by the Fund. As a Senior Officer, you are required to promote compliance with this policy and to abide by the Fund's standards, policies and procedures designed to promote compliance with this policy. Each Senior Officer must: o familiarize himself or herself with the disclosure requirements applicable to the Fund as well as the business and financial operations of the Fund; and o not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, including to the Trustees, the Fund's independent auditors, the Fund's counsel, counsel to the Independent Directors, governmental regulators or self-regulatory organizations. o not knowingly withhold, or cause others to withhold, facts about the Fund to others, including to other Trustees, the Fund's independent auditors, the Fund's counsel, counsel to the independent Trustees, governmental regulators or self-regulatory organizations. COMPLIANCE WITH CODE OF ETHICS If you know of or suspect a violation of this Code of Ethics or other laws, regulations, policies or procedures applicable to the Fund, you must report that information on a timely basis to the Chief Compliance Officer or report it anonymously by following the "whistle blower" policies adopted by the Fund from time to time. For the purposes hereof, the Fund has endorsed usage of the Phoenix confidential, 24-hour toll-free telephone help line at 1-800-813-8180 and shall require the Phoenix Chief Compliance Officer to promptly report any calls made to such number affecting a Fund. NO ONE WILL BE SUBJECT TO RETALIATION BECAUSE OF A GOOD FAITH REPORT OF A SUSPECTED VIOLATION. The Fund will follow these procedures in investigating and enforcing this Code of Ethics, and in reporting on this Code of Ethics: o the Chief Compliance Officer will take all appropriate action to investigate any actual or potential violations reported to him or her; o violations and potential violations will be reported to the applicable Fund Board after such investigation; o if the Fund Board determines that a violation has occurred, it will take all appropriate disciplinary or preventive action; and o appropriate disciplinary or preventive action may include a letter of censure, suspension, dismissal or, in the event of criminal or other serious violations of law, notification of the Securities and Exchange Commission or other appropriate law enforcement authorities. Senior Officers must make this Code of Ethics known to persons who might know of a potential conflict of interest, including the "whistle blower" policies adopted by the Fund from time to time. WAIVERS OF CODE OF ETHICS Except as otherwise provided in this Code of Ethics, the Chief Compliance Officer is responsible for applying this Code of Ethics to specific situations in which questions are presented to the Chief Compliance Officer and has the authority to interpret this Code of Ethics in any particular situation. The Chief Compliance Officer shall take all action he or she considers appropriate to investigate any actual or potential violations reported under this Code of Ethics. The Chief Compliance Officer is authorized to consult, as appropriate, with the chair of the Fund Board and with counsel to the Fund, the Adviser, Phoenix or the Independent Trustees, and is encouraged to do so. Each Fund Board, or any duly designated committee thereof, is responsible for granting waivers of this Code of Ethics, as appropriate. Any changes to or waivers of this Code of Ethics will, to the extent required, be disclosed on Form N-CSR, or otherwise, as provided by Securities and Exchange Commission rules. RECORDKEEPING The Fund will maintain and preserve for a period of not less than six (6) years from the date an action is taken, the first two (2) years in an easily accessible place, a copy of the information or materials supplied to the Fund Board or to any appropriate Committee thereof: o that provided the basis for any amendment or waiver to this Code of Ethics; and o relating to any violation of this Code of Ethics and sanctions imposed for such violation, together with a written record of the approval or action taken by the Board. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code of Ethics shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code of Ethics, such matters shall not be disclosed to anyone other than the Independent Trustees and their counsel, the Fund and its counsel, the Adviser and/or other Phoenix entity and its counsel and any other advisors, consultants or counsel retained by the Trustees, the Independent Trustees or any committee of the Board. AMENDMENTS This Code of Ethics may not be amended except in written form, which is specifically approved by a majority vote of the Trustees of each Fund, including a majority of the Independent Trustees. NO RIGHTS CREATED This Code of Ethics is a statement of certain fundamental principles, policies and procedures that govern each of the Senior Officers in the conduct of each Fund's business. It is not intended to and does not create any rights in any employee, investor, supplier, competitor, shareholder or any other person or entity. (Revised November 2004) EX-99.CERT 3 g32138_302cert.txt 302 CERTIFICATION CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, George R. Aylward, 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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 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 5, 2006 /s/ George R. Aylward ---------------------- ----------------------------------------------- George R. Aylward, Executive Vice President (principal executive officer) CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, W. Patrick Bradley, 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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 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 5, 2006 /s/ W. Patrick Bradley ---------------------- ----------------------------------------------- W. Patrick Bradley, Chief Financial Officer and Treasurer (principal financial officer) EX-99.906CERT 4 g32138_906cert.txt 906 CERTIFICATION CERTIFICATION PURSUANT TO RULE 30A-2(B) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, George R. Aylward, Executive Vice President of Phoenix Equity Trust (the "Registrant"), certify that: 1. The Form N-CSR of the Registrant containing the financial statements (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 5, 2006 /s/ George R. Aylward ---------------------- -------------------------------------------- George R. Aylward, Executive Vice President (principal executive officer) I, W. Patrick Bradley, Chief Financial Officer and Treasurer of Phoenix Equity Trust (the "Registrant"), certify that: 1. The Form N-CSR of the Registrant containing the financial statements (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 5, 2006 /s/ W. Patrick Bradley ---------------------- -------------------------------------------- W. Patrick Bradley, Chief Financial Officer and Treasurer (principal financial officer) -----END PRIVACY-ENHANCED MESSAGE-----