If you have text in a box that you want to turn into a hyperlink, which is correct...
In html5 either are valid2 as 'a' elements can now contain flow-content as well as phrase content (but not interactive elements like other anchors or objects etc ).
Again context is the key and if you have a text block that needs to be a link you can do this.
(If you use the above method its best to set the anchor to display:block to help older browsers).
If you just have the one phrase then just put the anchor around the phrase.