-----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, BTzC7RsN5w28s2TAbz0PeB1TaxZw2G0AdkNOirNU1Vz/ZAsWbHhgAB6Id00SBzVw wgcuhM/gWIuwg4hjTS36Rw== 0000935069-07-002648.txt : 20071109 0000935069-07-002648.hdr.sgml : 20071109 20071109122954 ACCESSION NUMBER: 0000935069-07-002648 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070831 FILED AS OF DATE: 20071109 DATE AS OF CHANGE: 20071109 EFFECTIVENESS DATE: 20071109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHOENIX INVESTMENT TRUST 97 CENTRAL INDEX KEY: 0001045018 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08343 FILM NUMBER: 071229553 BUSINESS ADDRESS: STREET 1: 101 MUNSON ST CITY: GREENFIELD STATE: MA ZIP: 01301 BUSINESS PHONE: 800 243-1574 MAIL ADDRESS: STREET 1: 56 PROSPECT STREET STREET 2: P.O. BOX 150480 CITY: HARTFORD STATE: CT ZIP: 06115-0480 0001045018 S000001382 PHOENIX SMALL CAP VALUE FUND C000003689 CLASS A PDSAX C000003690 CLASS B PDSBX C000003691 CLASS C PDSCX 0001045018 S000012726 Phoenix Quality Small-Cap Fund C000034273 Class A PQSAX C000034274 Class C PQSCX C000034275 Class I PXQSX 0001045018 S000012727 Phoenix Small-Cap Sustainable Growth Fund C000034276 Class A PSGAX C000034277 Class C PSGCX C000034278 Class I PXSGX N-CSR 1 g40796phnxinvtrust97_ncsr.txt PHOENIX INVESTMENT TRUST 97 AR 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 811-08343 ------------------- Phoenix Investment Trust 97 ------------------------------------------------------------- (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: August 31 ------------- Date of reporting period: August 31, 2007 ---------------- 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. - -------------------------------------------------------------------------------- [LOGO OMITTED] PHOENIX - -------------------------------------------------------------------------------- ANNUAL REPORT Phoenix Quality Small-Cap Fund Phoenix Small-Cap Sustainable Growth Fund Phoenix Small-Cap Value Fund WOULDN'T YOU RATHER HAVE THIS DOCUMENT E-MAILED TO YOU? TRUST NAME: ELIGIBLE SHAREHOLDERS CAN PHOENIX INVESTMENT | | SIGN UP FOR E-DELIVERY AT TRUST 97 | August 31, 2007 | PHOENIXFUNDS.COM ................................................................................. NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE TABLE OF CONTENTS Message from the President ................................................. 1 Glossary ................................................................... 2 Disclosure of Fund Expenses ................................................ 3 Phoenix Quality Small-Cap Fund ............................................. 4 Phoenix Small-Cap Sustainable Growth Fund .................................. 12 Phoenix Small-Cap Value Fund ............................................... 20 Notes to Financial Statements .............................................. 31 Report of Independent Registered Public Accounting Firm .................... 36 Fund Management Tables ..................................................... 37 - -------------------------------------------------------------------------------- PROXY VOTING INFORMATION (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, 2007, 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. - -------------------------------------------------------------------------------- This report is not authorized for distribution to prospective investors in the Phoenix Investment Trust 97 unless preceded or accompanied by an effective prospectus which includes information concerning the sales charge, each Fund's record and other pertinent information. MESSAGE FROM THE PRESIDENT DEAR PHOENIX FUNDS SHAREHOLDER: We are pleased to provide this report for the fiscal year ended August 31, 2007. It includes valuable information about your Phoenix mutual fund(s)--such as performance- and fee-related data and information about each fund's portfolio holdings and transactions for the reporting period. The report also provides commentary from your fund's management team with respect to the fund's performance, its investment strategies, and how the fund performed against the broader market. At Phoenix, we are committed to helping investors succeed over the long term and we strive to provide investors with choice. The Phoenix family of funds offers a wide array of investment options to help make diversification easy. Our multi-manager, multi-style approach gives you access to a complete suite of investment products, including numerous equity, fixed income and money market funds. We are proud to offer this diversified portfolio of funds managed by more than a dozen accomplished independent investment managers--many of whom were previously only available to large institutional investors. Their investment expertise allows us to offer a variety of styles, including growth, value and core products, along with asset allocation funds and alternative investments. Phoenix is also committed to providing you best-in-class service. Whether you need to check your account value or transfer funds, our customer service team stands ready to provide superior, dependable assistance to help you make informed decisions. Because we offer such an extensive selection of investment options, it's important that you consult an experienced financial professional for help reviewing or rebalancing your portfolio on a regular basis. A regular "checkup" can be an excellent way to help ensure that your investments are aligned with your financial goals. As president of Phoenix Investment Partners, Ltd., I would like to thank you for entrusting your assets with us. It's our privilege to serve you. Sincerely, /s/ George R. Aylward George R. Aylward President, PhoenixFunds SEPTEMBER 2007 1 GLOSSARY 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. REIT (REAL ESTATE INVESTMENT TRUST) A publicly traded company that owns, develops and operates income-producing real estate such as apartments, office buildings, hotels, shopping centers and other commercial properties. RUSSELL 2000(R) GROWTH INDEX The Russell 2000(R) Growth Index is a market capitalization-weighted index of growth-oriented stocks of the smallest 2,000 companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. RUSSELL 2000(R) VALUE INDEX The Russell 2000(R) Value Index is a market capitalization-weighted index of value-oriented stocks of the smallest 2,000 companies in the Russell Universe, which comprises the 3,000 largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. S&P 500(R) INDEX The S&P 500(R) Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. INDEXES ARE UNMANAGED AND NOT AVAILABLE FOR DIRECT INVESTMENT; THEREFORE, THEIR PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE ACTIVE MANAGEMENT OF AN ACTUAL PORTFOLIO. 2 PHOENIX INVESTMENT TRUST 97 DISCLOSURE OF FUND'S EXPENSES (UNAUDITED) (FOR THE SIX-MONTH PERIOD OF MARCH 1, 2007 TO AUGUST 31, 2007) We believe it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder in a Phoenix Investment Trust 97 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, if applicable; and (2) ongoing costs, including investment advisory fees; distribution and service fees; and other expenses. Class I shares are sold without a sales charge and do not incur distribution and service fees. These examples are intended to help you understand your ongoing costs (in dollars) of investing in one of the Investment Trust 97 funds and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period. The following table illustrates your Fund's costs in two ways. ACTUAL EXPENSES The first section of the accompanying tables provides information about actual account values and actual expenses. You may use the information in this section, 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 section 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 section 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 section of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. EXPENSE TABLE - -------------------------------------------------------------------------------- Beginning Ending Expenses Account Account Annualized Paid Value Value Expense During March 1, 2007 August 31, 2007 Ratio Period* - -------------------------------------------------------------------------------- QUALITY SMALL-CAP FUND - -------------------------------------------------------------------------------- ACTUAL Class I .......... $1,000.00 $1,016.40 1.15% $ 5.84 Class A .......... 1,000.00 1,015.60 1.40 7.11 Class C .......... 1,000.00 1,011.30 2.16 10.95 HYPOTHETICAL (5% RETURN BEFORE EXPENSES) Class I .......... 1,000.00 1,019.34 1.15 5.87 Class A .......... 1,000.00 1,018.06 1.40 7.15 Class C .......... 1,000.00 1,014.18 2.16 11.03 - -------------------------------------------------------------------------------- SMALL-CAP SUSTAINABLE GROWTH FUND - -------------------------------------------------------------------------------- ACTUAL Class I .......... $1,000.00 $1,003.90 1.15% $ 5.81 Class A .......... 1,000.00 1,002.90 1.40 7.07 Class C .......... 1,000.00 999.00 2.14 10.78 HYPOTHETICAL (5% RETURN BEFORE EXPENSES) Class I .......... 1,000.00 1,019.34 1.15 5.87 Class A .......... 1,000.00 1,018.06 1.40 7.15 Class C .......... 1,000.00 1,014.28 2.14 10.92 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- ACTUAL Class A .......... $1,000.00 $ 934.60 1.41% $ 6.88 Class B .......... 1,000.00 931.20 2.16 10.51 Class C .......... 1,000.00 931.20 2.16 10.51 HYPOTHETICAL (5% RETURN BEFORE EXPENSES) Class A .......... 1,000.00 1,018.01 1.41 7.20 Class B .......... 1,000.00 1,014.18 2.16 11.03 Class C .......... 1,000.00 1,014.18 2.16 11.03 - -------------------------------------------------------------------------------- * EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO, 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 (184) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD. YOU CAN FIND OUT MORE INFORMATION ABOUT THE FUNDS' EXPENSES IN THE FINANCIAL STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING EXPENSES AND OTHER SHAREHOLDER COSTS REFER TO THE PROSPECTUS. 3 PHOENIX QUALITY SMALL-CAP FUND A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, SANDI GLEASON, CFA AND ROBERT SCHWARZKOPF, CFA For the Fund's fiscal year ended August 31, 2007, o Class I shares returned 17.74%; o Class A shares returned 17.51%; o Class C shares returned 16.61%; o the S&P 500(R) Index, a broad-based equity index, returned 15.13%; o the Russell 2000(R) Value Index, the Fund's style-specific index, returned 6.64%. HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? o Strong economic growth accompanied by accommodative credit markets set the stage for a steadily advancing stock market for most of the past year. However, at the beginning of July economic and credit risks emerged in the form of home price declines and sub-prime mortgage delinquencies. As these risks translated into reduced consumer spending and price declines in mortgage-backed securities, the earnings outlook for corporate America clouded and credit became more expensive overall. o Stock prices subsequently experienced a modest pullback as investors weighed potential consumer weakness against a strong industrial economy and recalculated stock prices based on moderated expectations for earnings growth and a higher cost of capital. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR? o Lower quality stocks led the market early in the reporting period buoyed by accommodative credit markets. Although this represented a headwind to our high-quality investment methodology, the Fund outperformed the Russell 2000(R) Value benchmark over this period. As the economic and credit risks discussed above emerged, the more durable income structures and less credit dependent nature of high-quality companies allowed the Fund to continue its strong relative performance. o At the close of the reporting period, the Fund remained well diversified with no major stake in any economic sector. The Fund remains invested in demonstrably higher quality businesses than the Russell 2000(R) Value benchmark, with earnings growing faster and more dependably than the benchmark, and purchased at discount values to the benchmark. We believe the Fund's quality, growth, and value metrics will allow us to produce strong investment returns with less risk. 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. SEPTEMBER 2007 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. SMALL-CAP INVESTING INCLUDES THE RISKS OF GREATER PRICE VOLATILITY, LESS LIQUIDITY AND INCREASED COMPETITIVE THREAT. INVESTING IN FUNDS THAT HOLD A LIMITED NUMBER OF SECURITIES INVOLVES RISK THAT THEY WILL BE IMPACTED BY EACH SECURITY'S PERFORMANCE MORE THAN FUNDS WITH A LARGER NUMBER OF HOLDINGS. FOR DEFINITIONS OF INDEXES CITED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 2. 4 Phoenix Quality Small-Cap Fund - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS (1) PERIODS ENDING 8/31/07 - -------------------------------------------------------------------------------- INCEPTION INCEPTION 1 YEAR TO 8/31/07 DATE ---------- ------------ ----------- Class I Shares at NAV 17.74% 15.50% 6/28/06 Class A Shares at NAV(2) 17.51 15.21 6/28/06 Class A Shares at POP(3),(4) 10.76 9.55 6/28/06 Class C Shares at NAV(2) 16.61 14.36 6/28/06 Class C Shares with CDSC(4) 16.61 14.36 6/28/06 S&P 500(R) Index 15.13 17.54 6/28/06 Russell 2000(R) Value Index 6.64 11.57 6/28/06 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 DOES 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 CERTAIN REDEMPTIONS OF CLASS A SHARES AND ALL REDEMPTIONS OF CLASS C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER. - -------------------------------------------------------------------------------- GROWTH OF $10,000 PERIODS ENDING 8/31 - -------------------------------------------------------------------------------- This Growth of $10,000 chart assumes an initial investment of $10,000 made on 6/28/06 (inception of the Fund) in Class I, Class A and Class C 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 C shares reflects the CDSC charges which are 1% in the first year and 0% thereafter. Class I shares are sold without a sales charge. Performance assumes dividends and capital gain distributions are reinvested. [CHART OMITTED - EDGAR REPRESENTATION OF DATA FOLLOWS] Phoenix Phoenix Phoenix Quality Quality Quality Russell Small-Cap Small-Cap Small-Cap 2000(R) Fund Fund Fund Value S&P 500(R) Class A Class C Class I Index Index --------- --------- --------- ------- ---------- 6/28/06 $ 9,425 $10,000 $10,000 $10,000 $10,000 8/06 9,472 10,040 10,060 10,666 10,502 8/07 11,131 11,708 11,845 11,374 12,091 For information regarding the indexes, see the glossary on page 2. 5 Phoenix Quality Small-Cap Fund - -------------------------------------------------------------------------------- SECTOR WEIGHTINGS 8/31/07 - -------------------------------------------------------------------------------- As a percentage of total investments [PIE CHART OMITTED - EDGAR REPRESENTATION OF DATA FOLLOWS] Financials 28% Industrials 20 Consumer Discretionary 13 Energy 10 Health Care 9 Consumer Staples 7 Information Technology 6 Other (includes short-term investments) 7 SCHEDULE OF INVESTMENTS AUGUST 31, 2007 SHARES VALUE ------ ----------- DOMESTIC COMMON STOCKS--92.5% APPAREL, ACCESSORIES & LUXURY GOODS--3.5% Cherokee, Inc. .............................. 19,000 $ 722,000 ASSET MANAGEMENT & CUSTODY BANKS--9.4% Ares Capital Corp. .......................... 58,700 963,854 MCG Capital Corp. ........................... 66,800 969,936 ----------- 1,933,790 ----------- DATA PROCESSING & OUTSOURCED SERVICES--4.5% Syntel, Inc. ................................ 26,700 923,019 DIVERSIFIED COMMERCIAL & PROFESSIONAL SERVICES--4.5% McGrath RentCorp ............................ 29,150 933,675 ENVIRONMENTAL & FACILITIES SERVICES--1.3% ABM Industries, Inc. ........................ 11,300 264,194 HEALTH CARE DISTRIBUTORS--3.6% Owens & Minor, Inc. ......................... 18,400 734,160 HEALTH CARE EQUIPMENT--1.7% Young Innovations, Inc. ..................... 12,800 351,104 HEALTH CARE SERVICES--3.4% Landauer, Inc. .............................. 13,700 694,453 HOME FURNISHINGS--4.3% Tempur-Pedic International, Inc. ............ 30,900 893,010 HOUSEHOLD PRODUCTS--3.1% WD-40 Co. ................................... 18,600 646,722 SHARES VALUE ------ ----------- INDUSTRIAL MACHINERY--9.4% CLARCOR, Inc. ............................... 23,500 $ 909,920 Lincoln Electric Holdings, Inc. ............. 14,100 1,014,354 ----------- 1,924,274 ----------- INSURANCE BROKERS--4.6% National Financial Partners Corp. ........... 19,400 948,466 INTERNET SOFTWARE & SERVICES--1.8% Computer Services, Inc. ..................... 9,300 367,350 OIL & GAS REFINING & MARKETING--4.8% World Fuel Services Corp. ................... 25,600 986,880 OIL & GAS STORAGE & TRANSPORTATION--4.7% Crosstex Energy, Inc. ....................... 29,300 962,212 PERSONAL PRODUCTS--3.5% Chattem, Inc.(b) ............................ 11,700 722,007 REGIONAL BANKS--4.5% Cathay General Bancorp ...................... 28,300 920,033 SPECIALIZED CONSUMER SERVICES--4.5% Matthews International Corp. Class A ........ 21,200 914,568 SPECIALIZED FINANCE--2.2% Financial Federal Corp. ..................... 15,100 460,701 SPECIALIZED REITS--4.1% Entertainment Properties Trust .............. 17,500 837,200 SPECIALTY CHEMICALS--2.4% Balchem Corp. ............................... 23,600 484,744 See Notes to Financial Statements 6 Phoenix Quality Small-Cap Fund SHARES VALUE ------ ----------- THRIFTS & MORTGAGE FINANCE--2.4% Corus Bankshares, Inc. ...................... 37,100 $ 495,656 TRUCKING--4.3% Landstar System, Inc. ....................... 20,600 886,006 - ----------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $18,803,994) 19,006,224 - ----------------------------------------------------------------------------- EXCHANGE TRADED FUNDS--2.1% iShares Russell 2000 Value Index Fund 5,650 433,242 - ----------------------------------------------------------------------------- TOTAL EXCHANGE TRADED FUNDS (IDENTIFIED COST $465,437) 433,242 - ----------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--94.6% (IDENTIFIED COST $19,269,431) 19,439,466 - ----------------------------------------------------------------------------- PAR VALUE (000) --------- SHORT-TERM INVESTMENTS--2.5% REPURCHASE AGREEMENTS--2.5% State Street Bank and Trust Co. repurchase agreement 1.40% dated 8/31/07, due 9/4/07 repurchase price $513,080, collateralized by U.S. Treasury Note 4.25%, 8/15/15 market value $527,295. .................... $513 $ 513,000 - ----------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $513,000) 513,000 - ----------------------------------------------------------------------------- TOTAL INVESTMENTS--97.1% (IDENTIFIED COST $19,782,431) 19,952,466(a) Other assets and liabilities, net--2.9% 599,001 ----------- NET ASSETS--100.0% $20,551,467 =========== (a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $1,031,639 and gross depreciation of $861,683 for federal income tax purposes. At August 31, 2007, the aggregate cost of securities for federal income tax purposes was $19,782,510. (b) Non-income producing. See Notes to Financial Statements 7 Phoenix Quality Small-Cap Fund STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 2007 ASSETS Investment securities at value (Identified cost $19,782,431) $19,952,466 Cash 239 Receivables Fund shares sold 577,365 Dividends and interest 48,074 Prepaid expenses 16,413 Other assets 58 ----------- Total assets 20,594,615 ----------- LIABILITIES Payables Professional fee 33,280 Distribution and service fees 2,711 Investment advisory fee 1,482 Administration fee 1,141 Transfer agent fee 1,043 Trustees' fee 98 Trustee deferred compensation plan 58 Other accrued expenses 3,335 ----------- Total liabilities 43,148 ----------- NET ASSETS $20,551,467 =========== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $20,154,630 Undistributed net investment income 131,653 Accumulated net realized gain 95,149 Net unrealized appreciation 170,035 ----------- NET ASSETS $20,551,467 =========== CLASS I Net asset value (net assets/shares outstanding) and offering and redemption price per share $11.76 Shares of beneficial interest outstanding, no par value, unlimited authorization 909,092 Net Assets $10,691,018 CLASS A Net asset value per share (net assets/shares outstanding) $11.74 Maximum offering price per share $11.74/(1-5.75%) $12.46 Shares of beneficial interest outstanding, no par value, unlimited authorization 724,596 Net Assets $ 8,506,402 CLASS C Net asset value (net assets/shares outstanding) and offering price per share $11.68 Shares of beneficial interest outstanding, no par value, unlimited authorization 115,911 Net Assets $ 1,354,047 STATEMENT OF OPERATIONS YEAR ENDED AUGUST 31, 2007 INVESTMENT INCOME Dividends $229,845 Interest 11,509 -------- Total investment income 241,354 -------- EXPENSES Investment advisory fee 68,863 Service fees, Class A 5,803 Distribution and service fees, Class C 4,923 Administration fee 6,198 Registration 57,744 Professional 31,363 Transfer agent 6,271 Custodian 4,745 Printing 3,400 Trustees 609 Miscellaneous 1,597 -------- Total expenses 191,516 Less expenses reimbursed by investment adviser (91,883) Custodian fees paid indirectly (543) -------- Net expenses 99,090 -------- NET INVESTMENT INCOME (LOSS) 142,264 -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments 101,796 Net change in unrealized appreciation (depreciation) on investments 160,351 -------- NET GAIN (LOSS) ON INVESTMENTS 262,147 -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $404,411 ======== See Notes to Financial Statements 8 Phoenix Quality Small-Cap Fund STATEMENT OF CHANGES IN NET ASSETS From Inception Year Ended June 28, 2006 to August 31, 2007 August 31, 2006 --------------- ---------------- FROM OPERATIONS Net investment income (loss) $ 142,264 $ 4,248 Net realized gain (loss) 101,796 (1,016) Net change in unrealized appreciation (depreciation) 160,351 9,684 ----------- ---------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 404,411 12,916 ----------- ---------- FROM DISTRIBUTIONS TO SHAREHOLDERS Net investment income, Class I (13,706) -- Net investment income, Class A (1,052) -- Net investment income, Class C (101) -- Net realized short-term gains, Class I (4,797) -- Net realized short-term gains, Class A (480) -- Net realized short-term gains, Class C (354) -- ----------- ---------- DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (20,490) -- ----------- ---------- FROM SHARE TRANSACTIONS CLASS I Proceeds from shares sold (854,876 and 106,382 shares, respectively) 9,902,993 1,057,881 Net asset value of shares issued from reinvestment of distributions (1,446 and 0 shares, respectively) 16,217 -- Cost of shares repurchased (53,612 and 0 shares, respectively) (620,640) -- ----------- ---------- Total 9,298,570 1,057,881 ----------- ---------- CLASS A Proceeds from shares sold (730,339 and 10,000 shares, respectively) 8,552,859 100,000 Net asset value of shares issued from reinvestment of distributions (99 and 0 shares, respectively) 1,116 -- Cost of shares repurchased (15,842 and 0 shares, respectively) (184,609) -- ----------- ---------- Total 8,369,366 100,000 ----------- ---------- CLASS C Proceeds from shares sold (104,840 and 13,780 shares, respectively) 1,222,708 138,000 Net asset value of shares issued from reinvestment of distributions (36 and 0 shares, respectively) 402 -- Cost of shares repurchased (2,745 and 0 shares, respectively) (32,297) -- ----------- ---------- Total 1,190,813 138,000 ----------- ---------- INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 18,858,749 1,295,881 ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS 19,242,670 1,308,797 NET ASSETS Beginning of period 1,308,797 -- ----------- ---------- END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $131,653 AND $4,248, RESPECTIVELY) $20,551,467 $1,308,797 =========== ========== See Notes to Financial Statements 9 Phoenix Quality Small-Cap Fund FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) Class I --------------------------------------- FROM INCEPTION YEAR ENDED JUNE 28, 2006 AUGUST 31, 2007 TO AUGUST 31, 2006 ----------------- ------------------ Net asset value, beginning of period $10.06 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) 0.21 0.07 Net realized and unrealized gain (loss) 1.57 (0.01) ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.78 0.06 ------ ------ LESS DISTRIBUTIONS Dividends from net investment income (0.06) -- Distributions from net realized gains (0.02) -- ------ ------ TOTAL DISTRIBUTIONS (0.08) -- ------ ------ Change in net asset value 1.70 0.06 ------ ------ NET ASSET VALUE, END OF PERIOD $11.76 $10.06 ====== ====== Total return 17.74% 0.60%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $10,691 $1,070 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.15% 1.15%(3) Gross operating expenses 2.54% 21.32%(3) Net investment income (loss) 1.82% 3.85%(3) Portfolio turnover 17% 7%(4) Class A --------------------------------------- FROM INCEPTION YEAR ENDED JUNE 28, 2006 AUGUST 31, 2007 TO AUGUST 31, 2006 ----------------- ------------------ Net asset value, beginning of period $10.05 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) 0.25 0.03 Net realized and unrealized gain (loss) 1.51 0.02 ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.76 0.05 ------ ------ LESS DISTRIBUTIONS Dividends from net investment income (0.05) -- Distributions from net realized gains (0.02) -- ------ ------ TOTAL DISTRIBUTIONS (0.07) -- ------ ------ Change in net asset value 1.69 0.05 ------ ------ NET ASSET VALUE, END OF PERIOD $11.74 $10.05 ====== ====== Total return(2) 17.51% 0.50%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $8,506 $101 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.40% 1.40%(3) Gross operating expenses 2.19% 26.39%(3) Net investment income (loss) 2.14% 1.82%(3) Portfolio turnover 17% 7%(4) (1) Computed using average shares outstanding. (2) Sales charges are not reflected in total return calculation. (3) Annualized. (4) Not annualized. See Notes to Financial Statements 10 Phoenix Quality Small-Cap Fund FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) Class C --------------------------------------- FROM INCEPTION YEAR ENDED JUNE 28, 2006 AUGUST 31, 2007 TO AUGUST 31, 2006 ----------------- ------------------ Net asset value, beginning of period $10.04 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) 0.10 0.02 Net realized and unrealized gain (loss) 1.57 0.02 ------ ------ TOTAL FROM INVESTMENT OPERATIONS 1.67 0.04 ------ ------ LESS DISTRIBUTIONS Dividends from net investment income (0.01) -- Distributions from net realized gains (0.02) -- ------ ------ TOTAL DISTRIBUTIONS (0.03) -- ------ ------ Change in net asset value 1.64 0.04 ------ ------ NET ASSET VALUE, END OF PERIOD $11.68 $10.04 ====== ====== Total return(2) 16.61% 0.40%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $1,354 $138 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.16% 2.15%(3) Gross operating expenses 3.45% 25.96%(3) Net investment income (loss) 0.89% 1.38%(3) Portfolio turnover 17% 7%(4) (1) Computed using average shares outstanding. (2) Sales charges are not reflected in total return calculation. (3) Annualized. (4) Not annualized. See Notes to Financial Statements 11 PHOENIX SMALL-CAP SUSTAINABLE GROWTH FUND A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, SANDI GLEASON, CFA AND ROBERT SCHWARZKOPF, CFA For the Fund's fiscal year ended August 31, 2007, o Class I shares returned 5.92%; o Class A shares returned 5.62%; o Class C shares returned 4.81%; o the S&P 500(R) Index, a broad-based equity index, returned 15.13%; o the Russell 2000(R) Growth Index, the Fund's style-specific index, returned 16.36%. HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? o Strong economic growth accompanied by accommodative credit markets set the stage for a steadily advancing stock market for most of the past year. However, at the beginning of July economic and credit risks emerged in the form of home price declines and sub-prime mortgage delinquencies. As these risks translated into reduced consumer spending and price declines in mortgage-backed securities, the earnings outlook for corporate America clouded and credit became more expensive overall. o Stock prices subsequently experienced a modest pullback as investors weighed potential consumer weakness against a strong industrial economy and recalculated stock prices based on moderated expectations for earnings growth and a higher cost of capital. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR? o Lower quality stocks led the market early in the reporting period buoyed by accommodative credit markets. This represented a headwind to our high-quality investment methodology. The Fund trailed the Russell 2000(R) Growth benchmark over this period. o As the economic and credit risks discussed above emerged, the more durable income structures and less credit dependent nature of high-quality companies allowed the Fund to gain ground in relative performance. However, this outperformance was not enough to close the gap from the previous period when low-quality stocks led the market. o At the close of the reporting period, the Fund remained well diversified with no major stake in any sector. The Fund remains invested in demonstrably higher quality businesses than the Russell 2000(R) Growth benchmark, with earnings growing faster and more dependably than the benchmark, and purchased at discount values to the benchmark. We believe the Fund's quality, growth, and value metrics will allow us to produce strong investment returns with less risk. 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. SEPTEMBER 2007 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. SMALL-CAP INVESTING INCLUDES THE RISKS OF GREATER PRICE VOLATILITY, LESS LIQUIDITY AND INCREASED COMPETITIVE THREAT. INVESTING IN FUNDS THAT HOLD A LIMITED NUMBER OF SECURITIES INVOLVES RISK THAT THEY WILL BE IMPACTED BY EACH SECURITY'S PERFORMANCE MORE THAN FUNDS WITH A LARGER NUMBER OF HOLDINGS. FOR DEFINITIONS OF INDEXES CITED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 2. 12 Phoenix Small-Cap Sustainable Growth Fund - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 8/31/07 - -------------------------------------------------------------------------------- INCEPTION INCEPTION 1 YEAR TO 8/31/07 DATE ---------- ------------ ----------- Class I Shares at NAV 5.92% 3.14% 6/28/06 Class A Shares at NAV(2) 5.62 2.89 6/28/06 Class A Shares at POP(3) (0.46) (2.17) 6/28/06 Class C Shares at NAV(2) 4.81 2.12 6/28/06 Class C Shares with CDSC(4) 4.81 2.12 6/28/06 S&P 500(R) Index 15.13 17.54 6/28/06 Russell 2000(R) Growth Index 16.36 16.75 6/28/06 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 DOES 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 CERTAIN REDEMPTIONS OF CLASS A SHARES AND ALL REDEMPTIONS OF CLASS C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER. - -------------------------------------------------------------------------------- GROWTH OF $10,000 PERIODS ENDING 8/31/07 - -------------------------------------------------------------------------------- This Growth of $10,000 chart assumes an initial investment of $10,000 made on 6/28/06 (inception of the Fund) in Class I, Class A and Class C 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 C shares reflects the CDSC charges which are 1% in the first year and 0% thereafter. Class I shares are sold without a sales charge. Performance assumes dividends and capital gain distributions are reinvested. [CHART OMITTED - EDGAR REPRESENTATION OF DATA FOLLOWS] Phoenix Phoenix Phoenix Small-Cap Small-Cap Small-Cap Sustainable Sustainable Sustainable Russell Fund Fund Fund 2000(R) S&P 500(R) Class I Class A Class C Growth Index Index ----------- ----------- ----------- ------------ ---------- 6/28/06 $10,000 $9,425 $10,000 $10,000 $10,000 8/31/06 9,790 9,227 9,780 10,310 10,502 8/31/07 10,370 9,745 10,250 11,997 12,091 For information regarding the indexes, see the glossary on page 2. 13 Phoenix Small-Cap Sustainable Growth Fund As a percentage of total investments - -------------------------------------------------------------------------------- SECTOR WEIGHTINGS 8/31/07 - -------------------------------------------------------------------------------- As a percentage of total investments [PIE CHART OMITTED - EDGAR REPRESENTATION OF DATA FOLLOWS] Information Technology 33% Consumer Discretionary 20 Health Care 13 Industrials 13 Energy 10 Financials 8 Other (includes short-term investments) 3 SCHEDULE OF INVESTMENTS AUGUST 31, 2007 SHARES VALUE ------ ----------- DOMESTIC COMMON STOCKS--94.6% AEROSPACE & DEFENSE--1.8% HEICO Corp. Class A ......................... 8,300 $ 303,282 AIR FREIGHT & LOGISTICS--3.6% Pacer International, Inc. ................... 27,350 591,307 APPLICATION SOFTWARE--2.9% FactSet Research Systems, Inc. .............. 7,900 473,447 CASINOS & GAMING--2.6% Shuffle Master, Inc.(b) ..................... 29,100 431,553 CONSUMER FINANCE--5.2% World Acceptance Corp.(b) ................... 27,900 865,179 EDUCATION SERVICES--8.7% Bright Horizons Family Solutions, Inc.(b) ... 18,950 751,746 Strayer Education, Inc. ..................... 4,400 702,152 ----------- 1,453,898 ----------- ELECTRICAL COMPONENTS & EQUIPMENT--3.0% Franklin Electric Co., Inc. ................. 12,000 495,360 ELECTRONIC EQUIPMENT MANUFACTURERS--10.4% Daktronics, Inc. ............................ 29,700 816,750 Measurement Specialties, Inc.(b) ............ 37,700 909,701 ----------- 1,726,451 ----------- HEALTH CARE EQUIPMENT--7.8% ABAXIS, Inc.(b) ............................. 41,700 810,648 Thermage, Inc.(b) ........................... 63,000 488,880 ----------- 1,299,528 ----------- SHARES VALUE ------ ----------- HOMEFURNISHING RETAIL--5.0% Aaron Rents, Inc. ........................... 32,150 $ 822,719 IT CONSULTING & OTHER SERVICES--4.8% SI International, Inc.(b) ................... 25,750 793,615 LIFE SCIENCES TOOLS & SERVICES--2.7% Techne Corp.(b) ............................. 7,200 453,672 OIL & GAS EQUIPMENT & SERVICES--9.4% CARBO Ceramics, Inc. ........................ 17,100 800,280 Tesco Corp.(b) .............................. 28,000 765,800 ----------- 1,566,080 ----------- PHARMACEUTICALS--5.1% KV Pharmaceutical Co. Class A(b) ............ 30,900 844,497 RESTAURANTS--3.3% Cheesecake Factory, Inc. (The)(b) ........... 21,700 540,981 SEMICONDUCTOR EQUIPMENT--4.9% Cabot Microelectronics Corp.(b) ............. 19,700 821,884 SEMICONDUCTORS--4.8% Power Integrations, Inc.(b) ................. 28,700 803,313 TECHNOLOGY DISTRIBUTORS--4.3% ScanSource, Inc.(b) ......................... 26,050 721,585 TRADING COMPANIES & DISTRIBUTORS--4.3% NuCo2, Inc.(b) .............................. 27,250 716,403 - ----------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $15,388,320) 15,724,754 - ----------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--94.6% (IDENTIFIED COST $15,388,320) 15,724,754 - ----------------------------------------------------------------------------- See Notes to Financial Statements 14 Phoenix Small-Cap Sustainable Growth Fund PAR VALUE (000) VALUE ------ ----------- SHORT-TERM INVESTMENTS--2.7% REPURCHASE AGREEMENTS--2.7% State Street Bank and Trust Co. repurchase agreement 1.40% dated 8/31/07, due 9/4/07 repurchase price $444,069, collateralized by U.S. Treasury Note 4.25%, 8/15/15 market value $453,375 ....................... $ 444 $ 444,000 - ----------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $444,000) 444,000 - ----------------------------------------------------------------------------- TOTAL INVESTMENTS--97.2% (IDENTIFIED COST $15,832,320) 16,168,754(a) Other assets and liabilities, net--2.8% 458,195 ----------- NET ASSETS--100.0% $16,626,949 =========== (a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $1,105,150 and gross depreciation of $769,148 for federal income tax purposes. At August 31, 2007, the aggregate cost of securities for federal income tax purposes was $15,832,752. (b) Non-income producing. See Notes to Financial Statements 15 Phoenix Small-Cap Sustainable Growth Fund STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 2007 ASSETS Investment securities at value (Identified cost $15,832,320) $16,168,754 Cash 494 Receivables Investment securities sold 466,447 Fund shares sold 31,994 Dividends and interest 2,822 Prepaid expenses 16,403 Other assets 58 ----------- Total assets 16,686,972 ----------- LIABILITIES Payables Fund shares repurchased 18,775 Professional fee 33,282 Distribution and service fees 2,318 Transfer agent fee 1,228 Administration fee 1,130 Investment advisory fee 87 Trustees' fee 65 Trustee deferred compensation plan 58 Other accrued expenses 3,080 ----------- Total liabilities 60,023 ----------- NET ASSETS $16,626,949 =========== NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $16,376,770 Accumulated net realized loss (86,255) Net unrealized appreciation 336,434 ----------- NET ASSETS $16,626,949 =========== CLASS I Net asset value (net assets/shares outstanding) and offering and redemption price per share $10.37 Shares of beneficial interest outstanding, no par value, unlimited authorization 601,034 Net Assets $ 6,231,111 CLASS A Net asset value per share (net assets/shares outstanding) $10.34 Maximum offering price per share $10.34/(1-5.75%) $10.97 Shares of beneficial interest outstanding, no par value, unlimited authorization 988,786 Net Assets $10,221,893 CLASS C Net asset value (net assets/shares outstanding) and offering price per share $10.25 Shares of beneficial interest outstanding, no par value, unlimited authorization 16,972 Net Assets $ 173,945 STATEMENT OF OPERATIONS YEAR ENDED AUGUST 31, 2007 INVESTMENT INCOME Dividends $ 22,337 Interest 6,482 -------- Total investment income 28,819 -------- EXPENSES Investment advisory fee 63,194 Service fees, Class A 8,622 Distribution and service fees, Class C 1,411 Administration fee 5,840 Registration 57,740 Professional 30,054 Transfer agent 6,793 Custodian 3,689 Printing 2,926 Trustees 575 Miscellaneous 1,573 -------- Total expenses 182,417 Less expenses reimbursed by investment adviser (90,366) Custodian fees paid indirectly (965) -------- Net expenses 91,086 -------- NET INVESTMENT INCOME (LOSS) (62,267) -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments (83,735) Net change in unrealized appreciation (depreciation) on investments 326,093 -------- NET GAIN (LOSS) ON INVESTMENTS 242,358 -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $180,091 ======== See Notes to Financial Statements 16 Phoenix Small-Cap Sustainable Growth Fund STATEMENT OF CHANGES IN NET ASSETS From Inception Year Ended June 28, 2006 to August 31, 2007 August 31, 2006 --------------- ---------------- FROM OPERATIONS Net investment income (loss) $ (62,267) $ (934) Net realized gain (loss) (83,735) (2,520) Net change in unrealized appreciation (depreciation) 326,093 10,341 ----------- ---------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 180,091 6,887 ----------- ---------- FROM SHARE TRANSACTIONS CLASS I Proceeds from shares sold (544,204 and 91,748 shares, respectively) 5,577,886 886,900 Cost of shares repurchased (34,916 and 2 shares, respectively) (362,070) (19) ----------- ---------- Total 5,215,816 886,881 ----------- ---------- CLASS A Proceeds from shares sold (1,023,106 and 10,227 shares, respectively) 10,526,646 102,135 Cost of shares repurchased (44,547 and 0 shares, respectively) (462,781) -- ----------- ---------- Total 10,063,865 102,135 ----------- ---------- CLASS C Proceeds from shares sold (6,979 and 10,000 shares, respectively) 71,344 100,000 Cost of shares repurchased (7 and 0 shares, respectively) (70) -- ----------- ---------- Total 71,274 100,000 ----------- ---------- INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 15,350,955 1,089,016 ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS 15,531,046 1,095,903 NET ASSETS Beginning of period 1,095,903 -- ----------- ---------- END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) $16,626,949 $1,095,903 =========== ========== See Notes to Financial Statements 17 Phoenix Small-Cap Sustainable Growth Fund FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) CLASS I ---------------------------------------- FROM INCEPTION YEAR ENDED JUNE 28, 2006 AUGUST 31, 2007 TO AUGUST 31, 2006 ----------------- ------------------- Net asset value, beginning of period $ 9.79 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) (0.08) (0.01) Net realized and unrealized gain (loss) 0.66 (0.20) ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.58 (0.21) ------ ------ Change in net asset value 0.58 (0.21) ------ ------ NET ASSET VALUE, END OF PERIOD $10.37 $ 9.79 ====== ====== Total return 5.92 % (2.10)%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $6,231 $898 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.16 % 1.15 %(3) Gross operating expenses 2.94 % 23.99 %(3) Net investment income (loss) (0.77)% (0.61)%(3) Portfolio turnover 26 % 4 %(4) CLASS A ---------------------------------------- FROM INCEPTION YEAR ENDED JUNE 28, 2006 AUGUST 31, 2007 TO AUGUST 31, 2006 ----------------- ------------------- Net asset value, beginning of period $ 9.79 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) (0.10) (0.01) Net realized and unrealized gain (loss) 0.65 (0.20) ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.55 (0.21) ------ ------ Change in net asset value 0.55 (0.21) ------ ------ NET ASSET VALUE, END OF PERIOD $10.34 $ 9.79 ====== ====== Total return(2) 5.62 % (2.10)%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $10,222 $100 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.40 % 1.40 %(3) Gross operating expenses 2.16 % 28.32 %(3) Net investment income (loss) (0.96)% (0.87)%(3) Portfolio turnover 26 % 4 %(4) (1) Computed using average shares outstanding. (2) Sales charges are not reflected in total return calculation. (3) Annualized. (4) Not annualized. See Notes to Financial Statements 18 Phoenix Small-Cap Sustainable Growth Fund FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) CLASS C ---------------------------------------- FROM INCEPTION YEAR ENDED JUNE 28, 2006 AUGUST 31, 2007 TO AUGUST 31, 2006 ----------------- ------------------- Net asset value, beginning of period $ 9.77 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) (0.18) (0.03) Net realized and unrealized gain (loss) 0.66 (0.20) ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.48 (0.23) ------ ------ Change in net asset value 0.48 (0.23) ------ ------ NET ASSET VALUE, END OF PERIOD $10.25 $ 9.77 ====== ====== Total return(2) 4.81 % (2.20)%(4) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $174 $98 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.15 % 2.15 %(3) Gross operating expenses 4.31 % 29.09 %(3) Net investment income (loss) (1.78)% (1.61)%(3) Portfolio turnover 26 % 4 %(4) (1) Computed using average shares outstanding. (2) Sales charges are not reflected in total return calculation. (3) Annualized. (4) Not annualized. See Notes to Financial Statements 19 PHOENIX SMALL-CAP VALUE FUND A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, CARLTON NEEL AND DAVID DICKERSON For the Fund's fiscal year ended August 31, 2007, o Class A shares returned 0.97%; o Class B shares returned 0.26%; o Class C shares returned 0.26%; o the S&P 500(R) Index, a broad-based equity index, returned 15.13%; o the Russell 2000(R) Value Index, the Fund's style-specific benchmark, returned 6.64%. HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR? o Overall, stocks performed well over the course of the year. o Equity investors in the U.S., however, experienced dramatic losses in the mid-summer of 2007, on concerns over the magnitude of the effects that the sub-prime mortgage losses were having on the housing market. Generally, larger capitalization equities outperformed their small-cap counterparts. Growth stocks outperformed value issues. o In response to liquidity concerns in bank lending and commercial paper, the Federal Reserve (Fed) cut the discount rate by 50 basis points in August, causing speculation that the federal funds rate would be cut at the Fed's September 18 meeting. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR? o Hampering the Fund's performance for the 12-month period ended August 31 were: its focus on value-oriented stocks; and its quantitative model process, as stock selection suffered during the U.S. equity market's summer sell-off. o Contributing to the Fund's progress during the fiscal year were: sector selection, as the Fund was overweight the energy, materials and technology sectors--all of which outperformed the Russell 2000(R) Value Index; and the Fund's relatively low exposure to the financials sector, as those securities declined during the year. 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. SEPTEMBER 2007 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. SMALL-CAP INVESTING INCLUDES THE RISKS OF GREATER PRICE VOLATILITY, LESS LIQUIDITY AND INCREASED COMPETITIVE THREAT. CONVERTIBLE SECURITIES MAY BE SUBJECT TO REDEMPTION AT THE OPTION OF THE ISSUER. IF A SECURITY IS CALLED FOR REDEMPTION, THE FUND MAY HAVE TO REDEEM THE SECURITY, CONVERT IT INTO COMMON STOCK OR SELL IT TO A THIRD PARTY AT A PRICE AND TIME THAT IS NOT BENEFICIAL FOR THE FUND. FOR DEFINITIONS OF INDEXES CITED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 2. 20 Phoenix Small-Cap Value Fund - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 8/31/07 - -------------------------------------------------------------------------------- INCEPTION INCEPTION 1 YEAR 5 YEARS TO 8/31/07 DATE -------- --------- ------------ ----------- Class A Shares at NAV(2) 0.97% 12.85% 10.52% 11/20/97 Class A Shares at POP(3) (4.83) 11.52 9.85 11/20/97 Class B Shares at NAV(2) 0.26 12.03 9.71 11/20/97 Class B Shares with CDSC(4) (3.07) 12.03 9.71 11/20/97 Class C Shares at NAV(2) 0.26 12.03 9.71 11/20/97 Class C Shares with CDSC(4) 0.26 12.03 9.71 11/20/97 S&P 500(R) Index 15.13 12.00 6.17 11/20/97 Russell 2000(R) Value Index 6.64 16.85 10.41 11/20/97 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 CERTAIN REDEMPTIONS OF CLASS A SHARES AND ALL REDEMPTIONS OF CLASS C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER. - -------------------------------------------------------------------------------- GROWTH OF $10,000 PERIOD ENDING 8/31 - -------------------------------------------------------------------------------- This Growth of $10,000 chart assumes an initial investment of $10,000 made on 11/20/97 (inception of the Fund) in Class A, Class B and Class C 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 reflects the CDSC charges which decline from 5% to 0% over a five year period. The total return for Class C shares reflects the CDSC charges which are 1% in the first year and 0% thereafter. Performance assumes dividends and capital gain distributions are reinvested. [CHART OMITTED - EDGAR REPRESENTATION OF DATA FOLLOWS] Phoenix Phoenix Phoenix Small-Cap Small-Cap Small-Cap Russell S&P Value Fund Value Fund Value Fund 2000(R) 500(R) Class A Class B Class C Value Index Index ---------- ---------- ---------- ----------- ------- 11/20/97 $ 9,425 $10,000 $10,000 $10,000 $10,000 8/31/98 7,668 8,093 8,091 8,370 10,097 8/31/99 10,805 11,320 11,316 9,549 14,124 8/31/00 17,952 18,674 18,669 10,856 16,438 8/31/01 15,395 15,894 15,889 12,815 12,429 8/30/02 13,698 14,031 14,027 12,097 10,192 8/29/03 16,268 16,540 16,535 14,962 11,424 8/31/04 18,280 18,454 18,449 17,878 12,732 8/31/05 23,578 23,614 23,607 21,921 14,329 8/31/06 24,833 24,693 24,686 24,709 15,602 8/31/07 25,075 24,757 24,749 26,350 17,964 For information regarding the indexes, see the glossary on page 2. 21 Phoenix Small-Cap Value Fund - -------------------------------------------------------------------------------- SECTOR WEIGHTINGS 8/31/07 - -------------------------------------------------------------------------------- As a percentage of total investments [PIE CHART OMITTED - EDGAR REPRESENTATION OF DATA FOLLOWS] Industrials 18% Information Technology 17 Energy 11 Financials 7 Materials 7 Health Care 5 Consumer Discretionary 4 Other (includes short-term investments) 31 SCHEDULE OF INVESTMENTS AUGUST 31, 2007 SHARES VALUE -------- ------------ DOMESTIC COMMON STOCKS--93.9% AEROSPACE & DEFENSE--5.7% Ceradyne, Inc.(b)(e) ........................ 2,800 $ 202,384 Cubic Corp.(e) .............................. 40,000 1,581,200 Ducommun, Inc.(b) ........................... 40,000 1,154,800 DynCorp International, Inc.(b)(e) ........... 44,600 960,684 Esterline Technologies Corp.(b) ............. 51,100 2,580,039 Stanley, Inc.(b) ............................ 10,600 229,596 Teledyne Technologies, Inc.(b) .............. 39,600 1,976,436 Triumph Group, Inc.(e) ...................... 14,000 1,024,940 ------------ 9,710,079 ------------ AIR FREIGHT & LOGISTICS--0.3% Atlas Air Worldwide Holdings, Inc.(b)(e) .... 9,300 471,882 AIRLINES--1.9% AirTran Holdings, Inc.(b)(e) ................ 194,000 2,038,940 ExpressJet Holdings, Inc.(b)(e) ............. 42,724 186,277 Republic Airways Holdings, Inc.(b) .......... 54,000 1,028,160 ------------ 3,253,377 ------------ AIRPORT SERVICES--0.2% Macquarie Infrastructure Co. LLC(e) ......... 6,800 275,060 ALTERNATIVE CARRIERS--0.0% Premiere Global Services, Inc.(b) ........... 6,300 82,404 ALUMINUM--1.1% Century Aluminum Co.(b)(e) .................. 37,800 1,859,004 APPAREL RETAIL--0.4% Collective Brands, Inc.(b) .................. 29,100 687,633 SHARES VALUE -------- ------------ APPLICATION SOFTWARE--0.1% NetScout Systems, Inc.(b) ................... 22,200 $ 206,460 AUTO PARTS & EQUIPMENT--0.4% Modine Manufacturing Co.(e) ................. 21,000 589,050 Stoneridge, Inc.(b) ......................... 3,800 39,672 ------------ 628,722 ------------ AUTOMOTIVE RETAIL--0.2% CSK Auto Corp.(b)(e) ........................ 22,062 291,660 BUILDING PRODUCTS--0.1% Apogee Enterprises, Inc. .................... 5,000 125,850 CASINOS & GAMING--0.1% Churchill Downs, Inc. ....................... 3,200 159,552 COAL & CONSUMABLE FUELS--1.2% Massey Energy Co. ........................... 53,000 1,099,750 USEC, Inc.(b) ............................... 73,000 977,470 ------------ 2,077,220 ------------ COMMERCIAL PRINTING--0.9% Consolidated Graphics, Inc.(b) .............. 22,500 1,491,300 COMMODITY CHEMICALS--1.2% Koppers Holdings, Inc. ...................... 40,000 1,469,200 Spartech Corp. .............................. 27,000 584,820 ------------ 2,054,020 ------------ COMMUNICATIONS EQUIPMENT--6.7% ADC Telecommunications, Inc.(b) ............. 128,000 2,342,400 Arris Group, Inc.(b) ........................ 164,000 2,489,520 Comtech Telecommunications Corp.(b)(e) ...... 47,900 2,038,624 Dycom Industries, Inc.(b) ................... 60,000 1,771,800 See Notes to Financial Statements 22 Phoenix Small-Cap Value Fund SHARES VALUE -------- ------------ COMMUNICATIONS EQUIPMENT--CONTINUED Harris Corp. ................................ 45,500 $ 2,767,765 Symmetricom, Inc.(b)(e) ..................... 16,000 79,840 ------------ 11,489,949 ------------ COMPUTER STORAGE & PERIPHERALS--0.3% Brocade Communications Systems, Inc.(b) ..... 83,000 581,000 CONSTRUCTION & ENGINEERING--1.2% EMCOR Group, Inc.(b) ........................ 64,400 2,018,940 CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS--2.4% Cascade Corp.(e) ............................ 5,000 368,050 Federal Signal Corp. ........................ 45,600 697,680 Miller Industries, Inc.(b) .................. 2,000 36,620 NACCO Industries, Inc. Class A(e) ........... 7,400 876,678 Titan International, Inc. ................... 72,000 2,086,560 ------------ 4,065,588 ------------ CONSTRUCTION MATERIALS--0.5% Headwaters, Inc.(b)(e) ...................... 49,000 809,480 DATA PROCESSING & OUTSOURCED SERVICES--0.1% InfoUSA, Inc. ............................... 13,200 133,848 DIVERSIFIED CHEMICALS--1.6% Olin Corp. .................................. 125,000 2,680,000 DIVERSIFIED METALS & MINING--0.8% AMCOL International Corp.(e) ................ 41,000 1,320,610 DIVERSIFIED REITs--0.1% Investors Real Estate Trust ................. 17,000 177,650 DRUG RETAIL--1.0% Longs Drug Stores Corp. ..................... 34,000 1,792,820 ELECTRIC UTILITIES--1.1% Otter Tail Corp.(e) ......................... 8,900 324,850 Westar Energy, Inc.(e) ...................... 68,100 1,654,149 ------------ 1,978,999 ------------ ELECTRICAL COMPONENTS & EQUIPMENT--0.7% Smith (A.O.) Corp.(e) ....................... 24,600 1,185,720 ELECTRONIC EQUIPMENT MANUFACTURERS--1.5% Measurement Specialties, Inc.(b) ............ 25,000 603,250 Technitrol, Inc. ............................ 72,000 1,980,000 ------------ 2,583,250 ------------ ELECTRONIC MANUFACTURING SERVICES--2.1% Plexus Corp.(b) ............................. 81,000 1,925,370 TTM Technologies, Inc.(b)(e) ................ 126,600 1,478,688 Zygo Corp.(b) ............................... 12,000 154,200 ------------ 3,558,258 ------------ SHARES VALUE -------- ------------ FERTILIZERS & AGRICULTURAL CHEMICALS--1.2% CF Industries Holdings, Inc. ................ 32,000 $ 2,026,560 FOOD DISTRIBUTORS--0.4% Spartan Stores, Inc.(e) ..................... 25,400 646,176 FOOD RETAIL--0.5% Casey's General Stores, Inc. ................ 20,100 570,036 Weis Markets, Inc. .......................... 5,800 249,284 ------------ 819,320 ------------ GAS UTILITIES--2.0% Nicor, Inc.(e) .............................. 21,100 876,916 Piedmont Natural Gas Co.(e) ................. 55,000 1,452,000 WGL Holdings, Inc.(e) ....................... 33,100 1,088,659 ------------ 3,417,575 ------------ HEALTH CARE DISTRIBUTORS--0.1% Owens & Minor, Inc. ......................... 2,500 99,750 HEALTH CARE EQUIPMENT--1.0% CONMED Corp.(b)(e) .......................... 6,800 197,540 Greatbatch, Inc.(b)(e) ...................... 21,100 633,000 Invacare Corp.(e) ........................... 17,400 403,158 STERIS Corp. ................................ 14,700 412,629 ------------ 1,646,327 ------------ HEALTH CARE FACILITIES--1.5% AmSurg Corp.(b)(e) .......................... 25,000 589,750 Emeritus Corp.(b)(e) ........................ 61,479 1,669,155 Medcath Corp.(b) ............................ 12,900 378,615 ------------ 2,637,520 ------------ HEALTH CARE SERVICES--1.0% Amedisys, Inc.(b)(e) ........................ 16,600 627,148 Apria Healthcare Group, Inc.(b)(e) .......... 19,500 519,285 Res-Care, Inc.(b) ........................... 28,200 601,224 ------------ 1,747,657 ------------ HEALTH CARE SUPPLIES--0.2% Haemonetics Corp.(b) ........................ 5,600 277,984 HOME FURNISHINGS--0.2% Sealy Corp.(e) .............................. 26,100 398,286 HOMEFURNISHING RETAIL--0.4% Rent-A-Center, Inc.(b)(e) ................... 32,600 626,572 HOTELS, RESORTS & CRUISE LINES--0.2% Interstate Hotels & Resorts, Inc.(b) ........ 88,900 346,710 HOUSEHOLD PRODUCTS--0.2% WD-40 Co.(e) ................................ 9,700 337,269 See Notes to Financial Statements 23 Phoenix Small-Cap Value Fund SHARES VALUE -------- ------------ HOUSEWARES & SPECIALTIES--1.0% CSS Industries, Inc.(e) ..................... 8,700 $ 334,602 Tupperware Brands Corp. ..................... 47,000 1,447,130 ------------ 1,781,732 ------------ HUMAN RESOURCES & EMPLOYMENT SERVICES--0.7% Kelly Services, Inc. Class A(e) ............. 20,300 461,216 Kforce, Inc.(b) ............................. 30,200 459,644 Spherion Corp.(b) ........................... 34,200 302,328 ------------ 1,223,188 ------------ INDUSTRIAL CONGLOMERATES--0.4% Tredegar Corp. .............................. 37,100 648,508 INDUSTRIAL MACHINERY--5.8% Actuant Corp. Class A(e) .................... 12,000 731,880 Barnes Group, Inc.(e) ....................... 44,400 1,396,824 CIRCOR International, Inc.(e) ............... 14,000 592,060 Columbus McKinnon Corp.(b) .................. 78,800 2,140,996 EnPro Industries, Inc.(b)(e) ................ 35,800 1,496,082 Gardner Denver, Inc.(b) ..................... 5,500 219,505 Kadant, Inc.(b) ............................. 36,900 1,051,650 Lydall, Inc.(b) ............................. 50,100 524,046 Robbins & Myers, Inc. ....................... 32,200 1,744,596 ------------ 9,897,639 ------------ INTEGRATED TELECOMMUNICATION SERVICES--0.1% Consolidated Communications Holdings, Inc. .. 11,300 209,954 INTERNET RETAIL--0.7% FTD Group, Inc.(e) .......................... 70,273 1,248,751 INTERNET SOFTWARE & SERVICES--1.0% United Online, Inc.(e) ...................... 95,000 1,365,150 Vignette Corp.(b) ........................... 14,600 284,846 ------------ 1,649,996 ------------ INVESTMENT BANKING & BROKERAGE--0.0% Cowen Group, Inc.(b)(e) ..................... 4,000 51,120 IT CONSULTING & OTHER SERVICES--0.7% CIBER, Inc.(b) .............................. 18,800 149,084 SYKES Enterprises, Inc.(b) .................. 60,600 999,294 ------------ 1,148,378 ------------ LEISURE PRODUCTS--0.1% Callaway Golf Co. ........................... 8,700 141,984 LIFE SCIENCES TOOLS & SERVICES--0.2% Bio-Rad Laboratories, Inc. Class A(b) ....... 4,800 404,736 MANAGED HEALTH CARE--0.8% AMERIGROUP Corp.(b) ......................... 41,800 1,323,806 SHARES VALUE -------- ------------ MARINE--0.6% Horizon Lines, Inc. Class A(e) .............. 36,000 $ 1,015,560 METAL & GLASS CONTAINERS--0.2% Silgan Holdings, Inc. ....................... 8,600 439,374 MORTGAGE REITs--0.1% BRT Realty Trust(e) ......................... 5,000 105,850 MULTI-LINE INSURANCE--0.7% Horace Mann Educators Corp. ................. 59,400 1,148,796 MULTI-UTILITIES--0.1% CH Energy Group, Inc.(e) .................... 5,000 236,350 OFFICE REITs--1.0% Lexington Realty Trust ...................... 79,400 1,641,992 OFFICE SERVICES & SUPPLIES--0.9% Brady Corp. Class A ......................... 19,400 755,242 Mine Safety Appliances Co.(e) ............... 17,900 857,768 ------------ 1,613,010 ------------ OIL & GAS DRILLING--1.2% Parker Drilling Co.(b)(e) ................... 181,000 1,409,990 Union Drilling, Inc.(b)(e) .................. 44,200 636,480 ------------ 2,046,470 ------------ OIL & GAS EQUIPMENT & SERVICES--6.1% Allis-Chalmers Energy, Inc.(b)(e) ........... 24,100 480,072 Basic Energy Service, Inc.(b)(e) ............ 58,000 1,198,860 Complete Production Services(b)(e) .......... 113,000 2,508,600 Dawson Geophysical Co.(b)(e) ................ 19,000 1,289,340 Gulf Island Fabrication, Inc.(e) ............ 39,400 1,401,852 Gulfmark Offshore, Inc.(b)(e) ............... 29,000 1,329,650 Hornbeck Offshore Services, Inc.(b)(e) ...... 26,000 991,900 Oil States International, Inc.(b)(e) ........ 16,000 675,200 T-3 Energy Services Inc(b) .................. 19,400 600,042 ------------ 10,475,516 ------------ OIL & GAS EXPLORATION & PRODUCTION--4.4% Bois d'Arc Energy, Inc.(b)(e) ............... 85,000 1,526,600 Callon Petroleum Co.(b)(e) .................. 21,000 254,730 Chesapeake Energy Corp.(e) .................. 45,000 1,451,700 Comstock Resources, Inc.(b) ................. 35,000 963,550 Encore Acquisition Co.(b) ................... 40,000 1,111,600 Mariner Energy, Inc.(b)(e) .................. 49,000 1,027,530 Stone Energy Corp.(b) ....................... 12,000 395,400 Swift Energy Co.(b) ......................... 22,000 818,840 ------------ 7,549,950 ------------ OIL & GAS REFINING & MARKETING--0.7% Tesoro Corp. ................................ 24,000 1,183,920 See Notes to Financial Statements 24 Phoenix Small-Cap Value Fund SHARES VALUE -------- ------------ PACKAGED FOODS & MEATS--1.1% Flowers Foods, Inc. ......................... 73,000 $ 1,506,721 J & J Snack Foods Corp. ..................... 2,300 86,365 Lance, Inc. ................................. 15,400 383,614 ------------ 1,976,700 ------------ PAPER PACKAGING--0.0% Rock-Tenn Co. Class A ....................... 2,700 78,273 PAPER PRODUCTS--0.2% Buckeye Technologies, Inc.(b) ............... 24,200 376,794 PERSONAL PRODUCTS--1.0% Arden (Elizabeth), Inc.(b)(e) ............... 68,000 1,672,800 PHARMACEUTICALS--1.8% Salix Pharmaceuticals Ltd.(b)(e) ............ 101,800 1,172,736 Sciele Pharma, Inc.(b)(e) ................... 81,000 1,869,480 ------------ 3,042,216 ------------ PROPERTY & CASUALTY INSURANCE--3.9% Baldwin & Lyons, Inc. Class B ............... 1,500 41,100 CNA Surety Corp.(b) ......................... 3,000 53,880 Commerce Group, Inc. (The)(e) ............... 48,600 1,549,368 Harleysville Group, Inc. .................... 26,500 854,890 Meadowbrook Insurance Group, Inc.(b) ........ 102,300 903,309 Midland Co. (The)(e) ........................ 3,500 191,695 Navigators Group, Inc. (The)(b) ............. 24,600 1,333,320 Nymagic, Inc.(e) ............................ 9,100 273,546 ProCentury Corp. ............................ 14,400 204,192 RLI Corp.(e) ................................ 3,400 204,510 SeaBright Insurance Holdings, Inc.(b) ....... 39,000 671,970 State Auto Financial Corp.(e) ............... 6,400 191,488 United Fire & Casualty Co.(e) ............... 5,700 216,543 ------------ 6,689,811 ------------ PUBLISHING--0.8% Belo Corp. Class A .......................... 64,000 1,103,360 Voyager Learning Co.(b) ..................... 27,000 210,600 ------------ 1,313,960 ------------ REGIONAL BANKS--1.0% FNB Corp.(e) ................................ 45,800 777,684 Texas Capital Banshares, Inc.(b)(e) ......... 36,000 785,520 Vineyard National Bancorp(e) ................ 12,950 237,891 ------------ 1,801,095 ------------ RESTAURANTS--0.2% CEC Entertainment, Inc.(b) .................. 6,700 205,690 Landry's Restaurants, Inc.(e) ............... 5,000 143,350 ------------ 349,040 ------------ SHARES VALUE -------- ------------ SEMICONDUCTOR EQUIPMENT--4.5% Advanced Energy Industries, Inc.(b) ......... 61,600 $ 999,768 Cymer, Inc.(b)(e) ........................... 55,000 2,180,200 Mattson Technology, Inc.(b) ................. 42,100 443,313 MKS Instruments, Inc.(b) .................... 92,700 2,043,108 Varian Semiconductor Equipment Associates, Inc.(b) 38,100 2,119,503 ------------ 7,785,892 ------------ SEMICONDUCTORS--2.7% Integrated Silicon Solution, Inc.(b) ........ 19,000 117,800 Pericom Semiconductor Corp.(b) .............. 21,600 248,832 RF Micro Devices, Inc.(b)(e) ................ 318,200 1,893,290 Skyworks Solutions, Inc.(b) ................. 281,500 2,221,035 Techwell, Inc.(b)(e) ........................ 19,300 197,053 ------------ 4,678,010 ------------ SPECIALIZED FINANCE--0.3% Asta Funding, Inc.(e) ....................... 12,100 445,522 SPECIALIZED REITs--0.1% Hersha Hospitality Trust .................... 13,300 145,369 SPECIALTY CHEMICALS--0.7% Fuller (H.B.) Co. ........................... 34,500 928,395 Schulman (A.), Inc. ......................... 3,000 64,620 Stepan Co.(e) ............................... 4,600 138,092 ------------ 1,131,107 ------------ SPECIALTY STORES--0.2% Books-A-Million, Inc.(e) .................... 23,000 306,360 STEEL--1.8% Metal Management, Inc. ...................... 47,000 2,204,770 NN, Inc. .................................... 33,000 338,910 Quanex Corp.(e) ............................. 7,400 320,494 Ryerson, Inc.(e) ............................ 6,400 213,376 ------------ 3,077,550 ------------ SYSTEMS SOFTWARE--0.8% Sybase, Inc.(b) ............................. 62,400 1,438,320 TECHNOLOGY DISTRIBUTORS--0.6% Insight Enterprises, Inc.(b) ................ 31,400 744,808 PC Connection, Inc.(b)(e) ................... 16,600 213,476 ------------ 958,284 ------------ THRIFTS & MORTGAGE FINANCE--0.1% Corus Bankshares, Inc.(e) ................... 11,800 157,648 TOBACCO--0.1% Universal Corp.(e) .......................... 4,500 221,085 See Notes to Financial Statements 25 Phoenix Small-Cap Value Fund SHARES VALUE -------- ------------ TRADING COMPANIES & DISTRIBUTORS--0.2% TAL International Group, Inc.(e) ............ 14,000 $ 351,120 WATER UTILITIES--0.2% California Water Service Group .............. 10,100 391,173 WIRELESS TELECOMMUNICATION SERVICES--1.3% Syniverse Holdings, Inc.(b) ................. 58,200 822,366 USA Mobility, Inc.(b)(e) .................... 72,700 1,341,315 ------------ 2,163,681 ------------ - ----------------------------------------------------------------------------- TOTAL DOMESTIC COMMON STOCKS (IDENTIFIED COST $153,268,192) 160,516,431 - ----------------------------------------------------------------------------- FOREIGN COMMON STOCKS(c)--1.3% PROPERTY & CASUALTY INSURANCE--0.4% United America Indemnity Ltd. Class A (United States)(b) .......................... 28,500 616,740 REINSURANCE--0.9% Arch Capital Group Ltd. (United States)(b) .. 21,200 1,522,796 - ----------------------------------------------------------------------------- TOTAL FOREIGN COMMON STOCKS (IDENTIFIED COST $1,448,887) 2,139,536 - ----------------------------------------------------------------------------- EXCHANGE TRADED FUNDS--0.6% iShares Dow Jones US Regional Banks Index Fund .................................. 21,000 980,070 ------------ TOTAL EXCHANGE TRADED FUNDS (IDENTIFIED COST $996,723) .................. 980,070 ------------ DOMESTIC WARRANTS--0.0% OTHER DIVERSIFIED FINANCIAL SERVICES--0.0% Imperial Credit Industries, Inc. Strike Price $2.15, Exp. 1/31/08(b)(d) ............. 2,429 0 - ----------------------------------------------------------------------------- TOTAL DOMESTIC WARRANTS (IDENTIFIED COST $0) 0 - ----------------------------------------------------------------------------- TOTAL LONG TERM INVESTMENTS--95.8% (IDENTIFIED COST $155,713,802) 163,636,037 - ----------------------------------------------------------------------------- SHARES VALUE -------- ------------ SHORT-TERM INVESTMENTS--28.7% MONEY MARKET MUTUAL FUNDS--24.1% State Street Navigator Prime Plus (5.37% seven-day effective yield)(f) ........ 41,144,385 $ 41,144,385 PAR VALUE (000) --------- COMMERCIAL PAPER(g)--4.6% Eaton Corp. 5.25%, 9/5/07 ................... $3,395 3,393,019 Kimberly-Clark Corp. 5.15%, 9/4/07 .......... 2,435 2,433,955 Kimberly-Clark Corp. 5.20%, 9/12/07 ......... 2,150 2,146,584 ------------ 7,973,558 ------------ - ----------------------------------------------------------------------------- TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $49,117,943) 49,117,943 - ----------------------------------------------------------------------------- TOTAL INVESTMENTS--124.5% (IDENTIFIED COST $204,831,745) 212,753,980(a) Other assets and liabilities, net--(24.5)% (41,904,693) ------------ NET ASSETS--100.0% $ $170,849,287 ============ (a) Federal Income Tax Information: Net unrealized appreciation of investment securities is comprised of gross appreciation of $12,971,691 and gross depreciation of $7,636,575 for federal income tax purposes. At August 31, 2007, the aggregate cost of securities for federal income tax purposes was $207,418,864. (b) Non-income producing. (c) A security is considered to be foreign if the security is issued in a foreign country. The country of risk, noted parenthetically, is determined based on criteria described in Note 2G, "Foreign security country determination" in the Notes to Financial Statements. (d) Illiquid. Security valued at fair value as determined in good faith by or under the direction of the Trustees. At August 31, 2007, this security amounted to a value of $0 or 0% of net assets. (e) All or a portion of security is on loan. (f) Represents security purchased with cash collateral received for securities on loan. (g) The rate shown is the discount rate. See Notes to Financial Statements 26 Phoenix Small-Cap Value Fund STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 2007 ASSETS Investment securities at value, including $40,787,650 of securities on loan (Identified cost $204,831,745) $212,753,980 Receivables Dividends 184,590 Investment securities sold 141,578 Fund shares sold 9,784 Prepaid expenses 14,085 Other assets 46,609 ------------ Total assets 213,150,626 ------------ LIABILITIES Cash overdraft 137,862 Payables Fund shares repurchased 643,577 Upon return of securities loaned 41,144,385 Investment advisory fee 115,365 Distribution and service fees 79,619 Transfer agent fee 60,048 Trustee deferred compensation plan 46,609 Administration fee 14,542 Trustees' fee 233 Other accrued expenses 59,099 ------------ Total liabilities 42,301,339 ------------ NET ASSETS $170,849,287 ============ NET ASSETS CONSIST OF: Capital paid in on shares of beneficial interest $134,435,101 Accumulated net investment loss (6,482) Accumulated net realized gain 28,498,433 Net unrealized appreciation 7,922,235 ------------ NET ASSETS $170,849,287 ============ CLASS A Net asset value per share (net assets/shares outstanding) $15.72 Maximum offering price per share $15.72/(1-5.75%) $16.68 Shares of beneficial interest outstanding, no par value, unlimited authorization 6,608,508 Net Assets $103,874,581 CLASS B Net asset value (net assets/shares outstanding) and offering price per share $14.22 Shares of beneficial interest outstanding, no par value, unlimited authorization 1,375,025 Net Assets $ 19,552,331 CLASS C Net asset value (net assets/shares outstanding) and offering price per share $14.22 Shares of beneficial interest outstanding, no par value, unlimited authorization 3,335,752 Net Assets $ 47,422,375 STATEMENT OF OPERATIONS YEAR ENDED AUGUST 31, 2007 INVESTMENT INCOME Dividends $2,938,119 Security lending 224,822 Interest 143,561 Foreign taxes withheld (4,043) ---------- Total investment income 3,302,459 ---------- EXPENSES Investment advisory fee 1,948,897 Service fees, Class A 327,541 Distribution and service fees, Class B 267,347 Distribution and service fees, Class C 587,931 Administration fee 174,006 Transfer agent 403,227 Printing 128,758 Registration 44,523 Custodian 43,418 Professional 37,663 Trustees 20,301 Miscellaneous 30,955 ---------- Total expenses 4,014,567 ---------- Less expenses reimbursed by investment adviser (276,663) Custodian fees paid indirectly (2,361) ---------- Net expenses 3,735,543 ---------- NET INVESTMENT INCOME (LOSS) (433,084) ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments 34,134,230 Net change in unrealized appreciation (depreciation) on investments (27,724,971) ---------- NET GAIN (LOSS) ON INVESTMENTS 6,409,259 ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $5,976,175 ========== See Notes to Financial Statements 27 Phoenix Small-Cap Value Fund STATEMENT OF CHANGES IN NET ASSETS Year Ended Year Ended August 31, 2007 August 31, 2006 --------------- ---------------- FROM OPERATIONS Net investment income (loss) $ (433,084) $ (1,489,163) Net realized gain (loss) 34,134,230 41,254,936 Net change in unrealized appreciation (depreciation) (27,724,971) (27,051,697) ------------ ------------ INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 5,976,175 12,714,076 ------------ ------------ FROM DISTRIBUTIONS TO SHAREHOLDERS Net realized short-term gains, Class A (3,132,486) (359,993) Net realized short-term gains, Class B (713,267) (104,808) Net realized short-term gains, Class C (1,512,245) (179,271) Net realized long-term gains, Class A (18,655,440) (13,870,660) Net realized long-term gains, Class B (4,247,838) (4,044,831) Net realized long-term gains, Class C (9,006,258) (6,913,765) ------------ ------------ DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (37,267,534) (25,473,328) ------------ ------------ FROM SHARE TRANSACTIONS CLASS A Proceeds from shares sold (391,124 and 729,714 shares, respectively) 6,900,046 13,949,274 Net asset value of shares issued from reinvestment of distributions (1,174,484 and 729,358 shares, respectively) 19,860,555 12,953,387 Cost of shares repurchased (2,297,077 and 1,685,103 shares, respectively) (40,481,265) (31,925,844) ------------ ------------ Total (13,720,664) (5,023,183) ------------ ------------ CLASS B Proceeds from shares sold (75,690 and 102,263 shares, respectively) 1,206,674 1,787,328 Net asset value of shares issued from reinvestment of distributions (266,214 and 201,216 shares, respectively) 4,094,367 3,323,848 Cost of shares repurchased (757,092 and 817,203 shares, respectively) (12,239,579) (14,486,211) ------------ ------------ Total (6,938,538) (9,375,035) ------------ ------------ CLASS C Proceeds from shares sold (108,344 and 125,986 shares, respectively) 1,698,390 2,183,523 Net asset value of shares issued from reinvestment of distribution (572,898 and 357,395 shares, respectively) 8,811,167 5,904,168 Cost of shares repurchased (969,606 and 689,686 shares, respectively) (15,590,777) (12,219,361) ------------ ------------ Total (5,081,220) (4,131,670) ------------ ------------ INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (25,740,422) (18,529,888) ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS (57,031,781) (31,289,140) NET ASSETS Beginning of period 227,881,068 259,170,208 ------------ ------------ END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS AND UNDISTRIBUTED NET INVESTMENT INCOME OF $(6,482) AND $0, RESPECTIVELY) $170,849,287 $227,881,068 ============ ============ See Notes to Financial Statements 28 Phoenix Small-Cap Value Fund FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A ------------------------------------------------------- ENDED AUGUST 31 ------------------------------------------------------- 2007 2006 2005 2004 2003 Net asset value, beginning of period $18.45 $19.45 $15.08 $13.42 $11.30 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) 0.02 (0.05) (0.03) (0.06) --(3) Net realized and unrealized gain (loss) 0.38 1.01 4.40 1.72 2.12 ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.40 0.96 4.37 1.66 2.12 ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Distributions from net realized gains (3.13) (1.96) -- -- -- ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (3.13) (1.96) -- -- -- ------ ------ ------ ------ ------ Change in net asset value (2.73) (1.00) 4.37 1.66 2.12 ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $15.72 $18.45 $19.45 $15.08 $13.42 ====== ====== ====== ====== ====== Total return(2) 0.97% 5.32 % 28.98 % 12.37 % 18.76% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $103,875 $135,436 $147,132 $124,165 $76,783 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 1.43% 1.40 % 1.40 % 1.40 % 1.40% Gross operating expenses 1.56% 1.50 % 1.56 % 1.57 % 1.71% Net investment income (loss) 0.10% (0.28)% (0.17)% (0.38)% 0.04% Portfolio turnover 205% 121 % 102 % 150 % 241% CLASS B ------------------------------------------------------- ENDED AUGUST 31 ------------------------------------------------------- 2007 2006 2005 2004 2003 Net asset value, beginning of period $17.07 $18.26 $14.27 $12.79 $10.85 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) (0.11) (0.18) (0.15) (0.16) (0.08) Net realized and unrealized gain (loss) 0.39 0.95 4.14 1.64 2.02 ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.28 0.77 3.99 1.48 1.94 ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Distributions from net realized gains (3.13) (1.96) -- -- -- ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (3.13) (1.96) -- -- -- ------ ------ ------ ------ ------ Change in net asset value (2.85) (1.19) 3.99 1.48 1.94 ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $14.22 $17.07 $18.26 $14.27 $12.79 ====== ====== ====== ====== ====== Total return(2) 0.26 % 4.57 % 27.96 % 11.57 % 17.88 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $19,552 $30,567 $42,081 $43,801 $40,696 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.18 % 2.15 % 2.15 % 2.15 % 2.15 % Gross operating expenses 2.31 % 2.25 % 2.31 % 2.33 % 2.46 % Net investment income (loss) (0.66)% (1.04)% (0.91)% (1.15)% (0.71)% Portfolio turnover 205 % 121 % 102 % 150 % 241 % (1) Computed using average shares outstanding. (2) Sales charges are not reflected in total return calculation. (3) Amount is less than $0.01.
See Notes to Financial Statements 29 Phoenix Small-Cap Value Fund FINANCIAL HIGHLIGHTS (SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C ------------------------------------------------------- ENDED AUGUST 31 ------------------------------------------------------- 2007 2006 2005 2004 2003 Net asset value, beginning of period $17.07 $18.26 $14.27 $12.79 $10.85 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss)(1) (0.11) (0.18) (0.15) (0.16) (0.08) Net realized and unrealized gain (loss) 0.39 0.95 4.14 1.64 2.02 ------ ------ ------ ------ ------ TOTAL FROM INVESTMENT OPERATIONS 0.28 0.77 3.99 1.48 1.94 ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Distributions from net realized gains (3.13) (1.96) -- -- -- ------ ------ ------ ------ ------ TOTAL DISTRIBUTIONS (3.13) (1.96) -- -- -- ------ ------ ------ ------ ------ Change in net asset value (2.85) (1.19) 3.99 1.48 1.94 ------ ------ ------ ------ ------ NET ASSET VALUE, END OF PERIOD $14.22 $17.07 $18.26 $14.27 $12.79 ====== ====== ====== ====== ====== Total return(2) 0.26 % 4.57 % 27.96 % 11.57 % 17.88 % RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $47,422 $61,878 $69,957 $71,296 $51,559 RATIO TO AVERAGE NET ASSETS OF: Net operating expenses 2.18 % 2.15 % 2.15 % 2.15 % 2.15 % Gross operating expenses 2.31 % 2.25 % 2.31 % 2.32 % 2.46 % Net investment income (loss) (0.65)% (1.03)% (0.91)% (1.14)% (0.72)% Portfolio turnover 205 % 121 % 102 % 150 % 241 % (1) Computed using average shares outstanding. (2) Sales charges are not reflected in total return calculation.
See Notes to Financial Statements 30 PHOENIX INVESTMENT TRUST 97 NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2007 1. ORGANIZATION Phoenix Investment Trust 97 (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, three Funds are offered for sale (each a "Fund"). The Phoenix Quality Small-Cap Fund ("Quality Small-Cap Fund"), the Phoenix Small-Cap Sustainable Growth Fund ("Small-Cap Sustainable Growth Fund") and the Phoenix Small-Cap Value Fund ("Small-Cap Value Fund") are each diversified and each has an investment objective of long-term capital appreciation. The Funds offer the following classes of shares for sale: Class I Class A Class B Class C -------- ------- ------- ------- Quality Small-Cap Fund ............ X X -- X Small-Cap Sustainable Growth Fund . X X -- X Small-Cap Value 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.a 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. Class I shares are sold without a sales charge. 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 other 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. In September 2006, Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("SFAS 157"), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Funds' financial statement disclosures. 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 shareholders. Therefore, no provision for federal income taxes or excise taxes has been made. 31 PHOENIX INVESTMENT TRUST 97 NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2007 (CONTINUED) 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 it invests. In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes." This standard defines the threshold for recognizing the benefits of tax-return positions in the financial statements as "more-likely-than-not" to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50 percent likely to be realized. FIN 48 is effective for the Funds' fiscal year beginning September 1, 2007. 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. The evaluation by Management of the impact that may result from adopting FIN 48 is in progress. 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: The Funds may loan securities to qualified brokers through an agreement with State Street Bank and Trust Company (the "Custodian"). Under the terms of agreement, the Fund is required to maintain collateral with a market value not less than 100% of the market value of loaned securities. Collateral is adjusted daily in connection with changes in the market value of securities on loan. Collateral may consist of cash, securities issued or guaranteed by the U.S. Government or its agencies, sovereign debt of foreign countries and/or irrevocable letters of credit issued by banks. Cash collateral is invested in a short-term money market fund. Dividends earned on the collateral and premiums paid by the broker are recorded as income by the 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. As of August 31, 2007, the Small-Cap Value Fund had securities on loan with a market value of $40,787,650 and held non-cash collateral of $267,157 and cash collateral of $41,144,385. 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. J. REPURCHASE AGREEMENTS: A repurchase agreement is a transaction where a Fund acquires a security for cash and obtains a simultaneous commitment from the seller to repurchase the security at an agreed upon price and date. Each Fund, through its custodian, takes possession of securities collateralizing the repurchase agreement. The collateral is marked-to-market daily to ensure that the market value of the underlying assets remains sufficient to protect the Fund in the event of default by the seller. If the seller defaults and the value of the collateral declines, or if the seller enters insolvency proceedings, realization of collateral may be delayed or limited. 32 PHOENIX INVESTMENT TRUST 97 NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2007 (CONTINUED) 3. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS Phoenix Investment Counsel, Inc. ("PIC") (the "Adviser") is the Adviser to each Fund of the Trust. As compensation for its services to each Fund of the Trust. PIC, an indirect wholly-owned subsidiary of The Phoenix Companies, Inc. ("PNX") is entitled to a fee based upon the following annual rates as a percentage of the average daily net assets of each Fund: First $400+ Million - $1+ $400 Million $1 Billion Billion ------------- -------------- ---------- Quality Small-Cap Fund ....... 0.90% 0.85% 0.80% Small-Cap Sustainable Growth Fund .............. 0.90% 0.85% 0.80% First $1+ Billion - $2+ $1 Billion $2 Billion Billion ------------- -------------- ---------- Small-Cap Value Fund ......... 0.90% 0.85% 0.80% The Adviser has contractually agreed to limit total fund operating expenses, (excluding interest, taxes and extraordinary expenses), through December 31, 2007, so that such expenses do not exceed the following percentages of the average annual net asset values for the Funds: Class A Class C Class I ---------- ---------- ---------- Quality Small-Cap Fund ....... 1.40% 2.15% 1.15% Small-Cap Sustainable Growth Fund ............. 1.40% 2.15% 1.15% Class A Class B Class C ---------- ---------- --------- Small-Cap Value Fund 1.40% 2.15% 2.15% Effective August 23, 2007, the Adviser may recapture operating expenses waived or reimbursed under this arrangement, within three fiscal years following the end of the fiscal year in which such waiver or reimbursement occurred. Each Fund must pay its ordinary operating expenses before the Adviser is entitled to any reimbursement and must remain in compliance with applicable expense limitations. All or a portion of the following Adviser reimbursed expenses may be recaptured by the fiscal year ended 2010: Quality Small-Cap ............ $8,581 Small-Cap Sustainable ........ 7,935 Small-Cap Value .............. -- Kayne Anderson Rudnick Investment Management, LLC ("Kayne") an indirect wholly-owned subsidiary of PNX, is the subadviser to the Quality Small-Cap and Small-Cap Sustainable Growth Funds. Euclid Advisors LLC ("Euclid"), an indirect wholly-owned subsidiary of PNX, is the subadviser to the Small-Cap Value Fund. 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 August 31, 2007, as follows: Class A Class B Class C Net Selling Deferred Deferred Commissions Sales Charges Sales Charges ----------- -------------- -------------- Quality Small-Cap Fund ....... $1,079 $ -- $ 1 Small-Cap Sustainable Growth Fund .............. 794 -- 1 Small-Cap Value Fund ......... 4,012 21,225 963 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. Class I shares do not pay distribution and/or service fees. 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. PEPCO serves as the Administrator to the Trust. For its services, which includes financial agent services, PEPCO receives an administration fee at an annual rate of 0.09% of the first $5 billion, 0.08% on the next $10 billion and 0.07% over $15 billion of the average net assets across all non-money market funds in the Phoenix Funds and The Phoenix Edge Series Fund. For the fiscal year ended August 31, 2007, the Trust incurred administration fees totaling $186,044. PEPCO serves as the Trust's transfer agent with Boston Financial Data Services, Inc. serving as sub-transfer agent. For the fiscal year ended August 31, 2007, transfer agent fees were $416,291 as reported in the Statements of Operations. At August 31, 2007, PNX and its affiliates, and Phoenix affiliated Funds held shares which aggregated the following: Aggregate Net Asset Shares Value ------------ ------------ Quality Small-Cap Fund - --Class I ................... 10,072 $ 118,447 - --Class A ................... 332,423 3,902,646 - --Class C ................... 10,024 117,080 Small-Cap Sustainable Growth Fund - --Class I ................... 10,000 103,700 - --Class A ................... 376,160 3,889,494 - --Class C ................... 10,000 102,500 Small-Cap Value Fund - --Class A ................... 229,653 3,610,145 Until March 1, 2007, the Trust provided a deferred compensation plan to its trustees who were not officers of PNX. Under the deferred compensation plan, trustees were able to defer all or a portion of their 33 PHOENIX INVESTMENT TRUST 97 NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2007 (CONTINUED) compensation. Amounts deferred were retained by the Fund, and to the extent permitted by the 1940 Act, as amended, could have been invested in the shares of those funds selected by the trustees. Investments in such funds are included in "Other assets" on the Statements of Assets and Liabilities at August 31, 2007. 4. PURCHASES AND SALES OF SECURITIES Purchases and sales of securities (excluding U.S. Government and agency securities and short-term securities) during the fiscal year ended August 31, 2007, were as follows: Purchases Sales ------------------ ----------------- Quality Small-Cap Fund ............. $ 19,627,297 $ 1,223,054 Small-Cap Sustainable Growth Fund .. 16,151,289 1,696,668 Small-Cap Value Fund ............... 435,462,170 501,987,055 There were no purchases or sales of long-term U.S. Government and agency securities. 5. 10% SHAREHOLDERS As of August 31, 2007, certain Funds had individual shareholder accounts and/or omnibus shareholder accounts (which are comprised of a group of individual shareholders), which amounted to more than 10% of the total shares outstanding of the fund as detailed below. % Shares Number of Outstanding Accounts ------------------ ----------------- Quality Small-Cap Fund ............. 12% 1 Small-Cap Sustainable Growth Fund .. 15 1 The shareholder accounts are affiliated with PNX. 6. CREDIT RISK AND ASSET CONCENTRATIONS In countries with limited or developing markets, investments may present greater risks than in more developed markets and the prices of such investments may be volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of these investments and the income they generate, as well as a Fund's ability to repatriate such amounts. The 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 August 31, 2007, the Quality Small-Cap Fund held investments issued by various companies in the financials sector comprising 27% of the total net assets of the Funds. The Small-Cap Sustainable Growth Fund held investments issued by various companies in the information technology sector, comprising 32% of the total net assets of the Fund. 7. ILLIQUID SECURITIES Investments shall be considered illiquid if they cannot be disposed of within seven days in the ordinary course of business at the approximate amount at which such securities have been valued by the Fund. Additionally, the following information is also considered in determining liquidity: the frequency of trades and quotes for the investment, whether the investment is listed for trading on a recognized domestic exchange and/or whether two or more brokers are willing to purchase or sell the security at a comparable price, the extent of market making activity in the investment and the nature of the market for investment. Illiquid securities are noted as such at the end of each Fund's Schedule of Investments where applicable. 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 SEC 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. In February 2005, the NASD notified PNX that it was asserting violations of trade reporting rules by a subsidiary. PNX responded to the NASD allegations in May 2005. Thereafter, in January 2007, the NASD notified PNX that the matter is being referred for potential violations and possible action. On May 3, 2007, the NASD accepted a letter of acceptance, waiver and consent submitted by the PXP subsidiary to resolve this matter. Without admitting or denying the NASD's findings, in accordance with the terms of the letter the PXP subsidiary agreed to a censure, to pay a fine of $8,000 and to revise its supervisory procedures. The Company does not believe that the outcome of these matters will be material to these financial statements. 34 PHOENIX INVESTMENT TRUST 97 NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2007 (CONTINUED) 9. 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 arrangements. 10. FEDERAL INCOME TAX INFORMATION The Funds have capital loss carryovers, which may be used to offset future capital gains, as follows: Expiration Year --------------------- 2014 Total ------ ------- Quality Small-Cap Fund ......... $ -- $ -- Small-Cap Sustainable Growth Fund ................. 1,859 1,859 Small-Cap Value Fund ............ -- -- 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 August 31, 2007, the Funds utilized losses deferred in prior years against current year capital gains as follows: Quality Small-Cap Fund .......... $937 Small-Cap Sustainable Growth Fund ................ 661 Small-Cap Value Fund ............ -- 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. As of August 31, 2007, the Funds deferred and recognized post-October losses as follows: Capital Loss Capital Loss Deferred Recognized ----------------- --------------- Small-Cap Sustainable Growth Fund ................... $83,964 $ -- 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 -------------- -------------- Quality Small-Cap Fund ............. $214,979 $ 11,902 Small-Cap Sustainable Growth Fund .. -- -- Small-Cap Value Fund ............... 478,417 30,607,135 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. 11. 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 August 31, 2007, the following Funds recorded reclassifications to increase (decrease) the accounts as listed below: Capital Paid in on Shares of Accumulated Undistributed Beneficial Net Realized Net Investment Interest Gain (Loss) Income (Loss) ---------- ------------ ------------ Quality Small-Cap Fund ....... $ -- $ -- $ -- Small-Cap Sustainable Growth Fund ............. (62,267) -- 62,267 Small-Cap Value Fund ......... 726,550 (1,153,152) 426,602 12. MERGER Effective July 13, 2007, the Phoenix Value Equity Fund, formerly a series of Phoenix Investment Trust 97, was merged with and into the Phoenix Value Opportunities Fund, a series of Phoenix Equity Trust. The Phoenix Value Equity Fund has ceased to exist and is no longer available for sale. - -------------------------------------------------------------------------------- TAX INFORMATION NOTICE (UNAUDITED) For the fiscal year ended August 31, 2007, for federal income tax purposes, 93% and 58% of the ordinary income dividends earned by the Quality Small-Cap Fund and Small-Cap Value Fund, respectively, qualify for the dividends-received deduction for corporate shareholders. For the fiscal year ended August 31, 2007, the Quality Small-Cap Fund and Small-Cap Value Fund, respectively, hereby designate 93% and 57%, or the maximum amount allowable, of its ordinary income dividends to qualify for the lower tax rates applicable to individual shareholders. The actual percentage for the calendar year will be designated in the year-end tax statements. For the fiscal year ended August 31, 2007, the Quality Small-Cap Fund and the Small-Cap Value Fund designated $12,526 and $33,973,561, respectively, as long-term capital gain dividends. - -------------------------------------------------------------------------------- 35 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM [LOGO OMITTED] To the Board of Trustees of Phoenix Investment Trust 97 and Shareholders of Phoenix Quality Small-Cap Fund Phoenix Small-Cap Sustainable Growth Fund and Phoenix Small-Cap Value 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 Quality Small-Cap Fund, Phoenix Small-Cap Sustainable Growth Fund and Phoenix Small-Cap Value Fund (constituting Phoenix Investment Trust 97, hereafter referred to as the "Trust") at August 31, 2007, 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 Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP - ------------------------------- Boston, Massachusetts October 16, 2007 36 FUND MANAGEMENT TABLES (UNAUDITED) Information pertaining to the Trustees and officers of the Trust as of August 31, 2007, is set forth below. The statement of additional information (SAI) includes additional information about the Trustees and is available without charge, upon request, by calling (800) 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 YEAR OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ E. Virgil Conway Served since1997. 56 Chairman, Rittenhouse Advisors, LLC (consulting YOB: 1929 firm) (2001-present). Trustee/Director, Phoenix Funds Family (1983-present), Director, Urstadt Biddle Property Corp. (1989-present), Consolidated Edison Company of New York, Inc. (1970-2002), Union Pacific Corp. (1978-2002), Accuhealth, Inc. (1994-2002). - ------------------------------------------------------------------------------------------------------------------------------------ Harry Dalzell-Payne Served since 1997. 56 Retired. Trustee/Director, Phoenix Funds Family YOB: 1929 (1983-present). - ------------------------------------------------------------------------------------------------------------------------------------ Francis E. Jeffries Served since 1997. 59 Director, The Empire District Electric Company YOB: 1930 (1984-2004). Trustee/Director, Phoenix Funds Complex (1987-present). - ------------------------------------------------------------------------------------------------------------------------------------ Leroy Keith, Jr. Served since 1997. 56 Managing Director, Almanac Capital Management YOB: 1939 (commodities business) (since 2007). Director/Trustee, Evergreen Funds (93 portfolios) (1989-present). Trustee, Phoenix Funds Family (1980-present). Director, Lincoln Educational Services Corp. (2002-2004). Partner, Stonington Partners, Inc. (private equity firm) (2001-2007). - ------------------------------------------------------------------------------------------------------------------------------------ Geraldine M. McNamara Served since 2001. 58 Retired. Trustee/Director, Phoenix Funds Complex YOB: 1951 (2001-present). Managing Director, U.S. Trust Company of New York (private bank) (1982-2006). - ------------------------------------------------------------------------------------------------------------------------------------ James M. Oates Served since 1997. 56 Trustee/Director, Phoenix Funds Family YOB: 1946 (1987-present). Managing Director, Wydown Group (consulting firm) (1994-present). Director, Investors Bank & Trust Corporation (1995-present), Stifel Financial (1996-present). Independent Chairman (2005-present) and Trustee (2004-present), John Hancock Trust (93 portfolios). Trustee, John Hancock Funds II (74 portfolios) (2005-present). Director/Trustee, Plymouth Rubber Co. (1995-2003). Chairman, Hudson Castle Group, Inc. (Formerly IBEX Capital Markets, Inc.) (financial services) (1997-2006). Trustee, John Hancock Funds III (8 portfolios) (2005-2006). - ------------------------------------------------------------------------------------------------------------------------------------ Richard E. Segerson Served since 1997. 56 Managing Director, Northway Management Company YOB: 1946 (1998-present). Trustee/Director, Phoenix Funds Family (1983-present). - ------------------------------------------------------------------------------------------------------------------------------------ Ferdinand L.J. Verdonck Served since 2006. 56 Chairman, Amsterdam Molecular Therapeutics N.V. YOB: 1942 (biotechnology) (since 2007). Director, The JP Morgan European Investment Trust (1998-present), Galapagos N.V. (biotechnology) (2005-present). Trustee, Phoenix Funds Family (2004-present). Director, EASDAQ (Chairman) (2001-present), Groupe SNEF (electrical and electronic installation) (1998-present). Managing Director, Almanij N.V. (financial holding company) (1992-2003). Director, KBC Bank and Insurance Holding Company (1992-2003), KBC Bank (1992-2003), KBC Insurance (1992-2003), Kredietbank S.A. Luxembourgeoise (1992-2003), Investco N.V. (private equity company) (1992-2003), Gevaert N.V. (industrial holding company) (1992-2003), Fidea N.V. (insurance company) (1992-2003), Almafin N.V. (real estate investment company) (1992-2003), Centea N.V. (savings bank) (1992-2003), Degussa Antwerpen N.V. (1998-2004), Santens N.V. (textiles) (1999-2004), Dictaphone Corp. (2002-2006), Banco Urquijo (Chairman) (1998-2006). - ------------------------------------------------------------------------------------------------------------------------------------
37 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 AND YEAR OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ George R. Aylward(1) Served since 2004. 56 Senior Executive Vice President and President, YOB: 1964 Asset Management (since 2007), Senior Vice President and Chief Operating Officer, Asset Management (2004-2007), Vice President (2001-2004), The Phoenix Companies, Inc. Director and President (2006-present), Chief Operating Officer (2004-present), Executive Vice President (2004-2006), Vice President, Finance, (2001-2002), Phoenix Investment Partners, Ltd. Various senior officer and directorship positions with Phoenix affiliates. President (2006-present), Executive Vice President (2004-2006), the Phoenix Funds Family. Chairman, President and Chief Executive Officer, The Zweig Fund Inc. and The Zweig Total Return Fund Inc. (2006-present). - ------------------------------------------------------------------------------------------------------------------------------------ Marilyn E. LaMarche(2) Served since 2002. 56 Limited Managing Director, Lazard Freres & Co. LLC YOB: 1934 (1997-present). Trustee/Director, Phoenix Funds Family (2002-present). Director, The Phoenix Companies, Inc. (2001-2005). - ------------------------------------------------------------------------------------------------------------------------------------ Philip R. McLoughlin(3) Served since 1997. 76 Partner, Cross Pond Partners, LLC (2006-Present). YOB: 1946 Director, PXRE Corporation (Reinsurance) Chairman (1985-present), World Trust Fund (1991-present). Director/Trustee, Phoenix Funds Complex (1989-present). Management Consultant (2002-2004), 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 (1983-2002) and Chairman (1995-2002), Phoenix Investment Counsel, Inc. Director (1982-2002) and Chairman (2000-2002), Phoenix Equity Planning Corporation. Chairman and President, Phoenix/Zweig Advisers LLC (2001-2002). Executive Vice President (1994-2002) and Chief Investment Counsel (1994-2002), PHL Variable Insurance Company. - ------------------------------------------------------------------------------------------------------------------------------------ (1) Mr. Aylward is an "interested person," as defined in the Investment Company Act of 1940, by reason of his position with Phoenix Investment Partners, Ltd. and its affiliates. (2) Ms. LaMarche is an "interested person," as defined in the Investment Company Act of 1940, by reason of her former position as a Director of The Phoenix Companies, Inc. (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.
38 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) YEAR OF BIRTH TIME SERVED DURING PAST 5 YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Nancy G. Curtiss Senior Vice President Assistant Treasurer (2001-present), Vice YOB: 1952 since 2006. President, Fund 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. - ------------------------------------------------------------------------------------------------------------------------------------ Francis G. Waltman Senior Vice President Senior Vice President, Asset Management Product YOB: 1962 since 2004. Development, The Phoenix Companies, Inc. (2006-present). Senior Vice President, Asset Management Product Development (2005-present), Senior Vice President and Chief Administrative Officer (2003-2004), Phoenix Investment Partners, Ltd. Director and President (2006-present), Senior Vice President and Chief Administrative Officer (1999-2003), Phoenix Equity Planning Corporation. Senior Vice President, Phoenix Investment Counsel, Inc. (2006-present). Director, Duff & Phelps Investment Management Company (2006-present). Senior Vice President, the Phoenix Funds Family (2004-present). - ------------------------------------------------------------------------------------------------------------------------------------ Marc Baltuch Vice President and Chief Chief Compliance Officer, Zweig-DiMenna Associates c/o Zweig-DiMenna Compliance Officer LLC (1989-present). Vice President and Chief Associates, LLC since 2004. Compliance Officer, certain Funds within the 900 Third Avenue Phoenix Funds Complex (2004-present). Vice New York, NY 10022 President, The Zweig Total Return Fund, Inc. YOB: 1945 (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). - ------------------------------------------------------------------------------------------------------------------------------------ W. Patrick Bradley Chief Financial Officer Vice President, Fund Administration, Phoenix YOB: 1972 and Treasurer since 2006. Investment Partners, Ltd. (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 (2006-present). 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 One American Row Officer, Counsel and Company (2005- present). Vice President, Counsel, Hartford, CT 06102 Secretary since 2005. Chief Legal Officer and Secretary, the Phoenix YOB: 1954 Funds Family (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). - ------------------------------------------------------------------------------------------------------------------------------------
39 PHOENIX INVESTMENT TRUST 97 INVESTMENT ADVISER 101 Munson Street Phoenix Investment Counsel, Inc. Greenfield, MA 01301-9668 56 Prospect Street Hartford, CT 06115-0480 TRUSTEES PRINCIPAL UNDERWRITER George R. Aylward Phoenix Equity Planning Corporation E. Virgil Conway One American Row Harry Dalzell-Payne Hartford, CT 06103-2899 Francis E. Jeffries Leroy Keith, Jr. TRANSFER AGENT Marilyn E. LaMarche Phoenix Equity Planning Corporation Philip R. McLoughlin, Chairman One American Row Geraldine M. McNamara Hartford, CT 06103-2899 James M. Oates Richard E. Segerson CUSTODIAN Ferdinand L.J. Verdonck State Street Bank and Trust Company P.O. Box 5501 OFFICERS Boston, MA 02206-5501 George R. Aylward, President Nancy G. Curtiss, Senior Vice President INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Francis G. Waltman, Senior Vice President PricewaterhouseCoopers LLP Marc Baltuch, Vice President and Chief 125 High Street Compliance Officer Boston, MA 02110-1707 W. Patrick Bradley, Chief Financial Officer and Treasurer HOW TO CONTACT US Kevin J. Carr, Vice President, Counsel, Mutual Fund Services 1-800-243-1574 Secretary and Chief Legal Officer Advisor Consulting Group 1-800-243-4361 Telephone Orders 1-800-367-5877 TextTelephone 1-800-243-1926 Website 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. - -------------------------------------------------------------------------------- [BLANK PAGE] [LOGO OMITTED] ----------------- PHOENIX PRESORTED STANDARD Phoenix Equity Planning Corporation U.S. POSTAGE P.O. Box 150480 PAID Hartford, CT 06115-0480 Lancaster, PA Permit No. 1793 ----------------- For more information about Phoenix mutual funds, please call your financial representative, contact us at 1-800-243-1574 or visit PHOENIXFUNDS.COM. PXP215 10-07 BPD32908 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 $50,000 for 2007 and $75,000 for 2006. AUDIT-RELATED FEES (b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $3,000 for 2007 and $0 for 2006. This represents fees for the review of the registrants semi-annual report. 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 $12,900 for 2007 and $17,200 for 2006. "Tax Fees" are those primarily associated with review of the Trust's tax provision and qualification as a regulated investment company (RIC) in connection with audits of the Trust's financial statement, review of year-end distributions by the Fund to avoid excise tax for the Trust, periodic discussion with management on tax issues affecting the Trust, and reviewing and signing the Fund's federal income 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 2007 and $0 in 2006. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. The Phoenix Investment Trust 97 (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 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 2007 and not applicable for 2006. (c) 100% for 2007 and 100% for 2006. (d) Not applicable for 2007 and not applicable for 2006. (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was less than fifty percent. (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $779,328 for 2007 and $944,027 for 2006. (h) The registrant's audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Phoenix Investment Trust 97 --------------------------------------------------------------------- By (Signature and Title)* /s/ George R. Aylward ------------------------------------------------------- George R. Aylward, President (principal executive officer) Date November 8, 2007 ---------------------------------------------------------------------------- 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, President (principal executive officer) Date November 8, 2007 ---------------------------------------------------------------------------- By (Signature and Title)* /s/ W. Patrick Bradley ------------------------------------------------------- W. Patrick Bradley, Chief Financial Officer and Treasurer (principal financial officer) Date November 8, 2007 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CODE ETH 2 g40796_ethics.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 g40796_302cert.txt 302 CERT 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 Investment Trust 97; 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: November 8, 2007 /s/ George R. Aylward ---------------------- ----------------------------------------------- George R. Aylward, 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 Investment Trust 97; 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: November 8, 2007 /s/ W. Patrick Bradley ---------------------- ----------------------------------------------- W. Patrick Bradley, Chief Financial Officer and Treasurer (principal financial officer) EX-99.906CERT 4 g40796_906cert.txt 906 CERT CERTIFICATION PURSUANT TO RULE 30A-2(B) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, George R. Aylward, President of Phoenix Investment Trust 97 (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: November 8, 2007 /s/ George R. Aylward ---------------------- ----------------------------------------------- George R. Aylward, President (principal executive officer) I, W. Patrick Bradley, Chief Financial Officer and Treasurer of Phoenix Investment Trust 97 (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: November 8, 2007 /s/ W. Patrick Bradley ---------------------- ----------------------------------------------- W. Patrick Bradley, Chief Financial Officer and Treasurer (principal financial officer) -----END PRIVACY-ENHANCED MESSAGE-----