PHOENIX-SENECA BOND FUND

With rates on money market funds falling, investors wanting income

might be smart to look at bond funds. Here's one that not only provides an

income stream but one that's diversified too.

The Phoenix-Seneca Bond Fund, (1-800-243-4361), has been around for three

years. It's an off-shoot of an institutional fund that bears the same name

and as such, shares the same management style and management team. One of the

attractive things about all that sharing, from a retail investors point of

view, is the pay-off: Ever since the institutional fund began in 1996, and

the retail fund's inception in 1998, neither has ever had a down performance

year.

Another plus for the retail fund is that there's not just a team of two or

three managing assets in it, there's a team of 13. "The team includes a

junior portfolio manager, six credit analysts, two mortgage-back and

asset-back analysts, a cash manager and two quantitative analysts, plus

myself," says Charles Dicke, portfolio manger of the Phoenix-Seneca Bond

fund, (SAVAX).

All that management has paid off thus far: As of July 17, the fund's total

return was up 4.70 percent and at the end of June its yield was 5.45 percent.

Here's more from Dicke about how the fund is managed:

Q: With 100 bonds in the portfolio could you give me an idea of the quality

of bonds the fund invests in?

Dicke: Currently, about 72 percent of the fund is in investment grade

securities and 28 percent in high-yield bonds. Investment grade securities

are bonds rated double-B and below and the fund has the ability to invest up

to 35 percent of its assets in high yield bonds.

Q: Currently, where is the fund getting most of its yield kick?

Dicke: One area we like right now are 30-year discount Ginnie Mae securities.

Those are yielding about 6.5 percent. And we also like investment grade

corporates. Avis Rent A Car has an investment grade rated bond that's

yielding 8.2 percent.

Q: Why do you think people are more interested in bonds these days then they

were a few years back?

Dicke: They've learned that stocks can be volatile. And, that the

combination of stocks and bonds can keep the volatility of your total assets

from swings to wildly. Plus, bonds can provide some steady income.

Q: Speaking of income, where does the income stream in your fund come from?

Dicke: We're involved in all different sectors of the market place --

mortgage backs, asset backs, investment grade, corporate, Treasuries,

high-yield corporates -- so this fund could really be a core holding for

investors.

Q: How have the fund's portfolio holdings changed over the years?

Dicke: Yes. The value we add is picking the sectors right and picking the

securities that we hope will perform well. So, when we were concerned with

corporate spreads being at such rich levels back in 1997, we rotated out of

some corporates and added to our mortgage positions which protected us from

some of the blow-ups in corporates.

Also, in 1998, we were up to near maximum in high-yield securities and we've

pared that position back.

Right now we feel good about the securities that we own including those that

offer the extra yields.

Q: It sounds as though you're more interested in putting together a portfolio

of bonds that make sense rather than creating one in which the goal is the

highest possible returns.

Dicke: That's the trade off. We want to beat the market place, ( in terms of

performance), but we don't want to be more volatile than the market place. So

the first order is to preserve capital and the second order, to out perform

the market.