Dreyfus
Investment Portfolios,
Core Bond Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
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2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Portfolio
Dreyfus Investment Portfolios,
Core Bond Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Core Bond Portfolio, covering the period from the portfolio's
inception on May 1, 2000 through June 30, 2000. Inside, you'll find valuable
information about how the portfolio was managed during the reporting period,
including a discussion with Michael Hoeh, portfolio manager and a member of the
Dreyfus Taxable Fixed Income Team that manages the portfolio.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
bond market over the past six months. This was primarily a result of efforts by
the Federal Reserve Board (the "Fed" ) to forestall potential inflationary
pressures. The Fed raised short-term interest rates by .50 percentage points
since the portfolio' s inception. This increase in May contributed to a total
interest-rate increase of 1.75 percentage points since late June 1999.
Higher interest rates led to an erosion of most bond prices, especially among
higher yielding securities. U.S. Treasury securities represented a notable
exception. Prices of these direct obligations of the federal government rose
primarily because of reduced supply amid robust demand from domestic and foreign
investors.
We appreciate your confidence and we look forward to your continued
participation in Dreyfus Investment Portfolios, Core Bond Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Michael Hoeh, Portfolio Manager Dreyfus Taxable Fixed Income Team
How did Dreyfus Investment Portfolios, Core Bond Portfolio perform during the
period?
For the period from the portfolio's inception on May 1, 2000 through June 30,
2000, the portfolio produced a total return of 1.68%.(1)
We attribute the portfolio's performance to our efforts to begin deploying the
portfolio' s assets into various areas of the bond market. Over the two-month
reporting period, we gradually invested the portfolio's assets into various
sectors of the bond market.
What is the portfolio's investment approach?
The portfolio seeks to maximize total return through both capital appreciation
and current income. The portfolio invests at least 65% of its assets in
investment grade fixed-income securities, which include U.S. Treasury
securities, U.S. Government agency securities, corporate bonds, foreign bonds,
mortgage- and asset-backed securities, convertible securities and preferred
stocks. The portfolio may invest up to 35% of its assets in bonds rated below
investment grade credit quality, also known as "high yield" securities.
Our investment approach emphasizes:
*FUNDAMENTAL ECONOMIC ANALYSIS. Our review of U.S. economic conditions helps
us establish the portfolio's average duration, which is a measure of sensitivity
to interest-rate changes. If interest rates appear to be rising, we will
generally reduce the portfolio's average duration to keep cash available for the
purchase of higher yielding securities as they become available. If interest
rates appear to be declining, we will generally increase the portfolio's average
duration to lock in prevailing yields.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
*SECTOR ALLOCATION. We allocate assets among the various sectors of the
fixed-income marketplace according to their relative attractiveness based on
prevailing and expected market and economic conditions.
*SECURITY SELECTION. We choose individual securities according to factors that
include their yields, prices, liquidity and the financial health of the issuers.
What other factors influenced the portfolio's performance?
During the two months since its inception, the portfolio was primarily
influenced by inflation fears, rising interest rates and unusual conditions in
the U.S. Treasury securities marketplace. Investors have been concerned that
robust economic growth might rekindle long-dormant inflationary pressures,
especially rising wages in a tight job market. In an attempt to relieve these
pressures, the Federal Reserve Board (the "Fed") has raised short-term interest
rates six times since June 1999, including once in May 2000, causing most bond
prices to fall.
The portfolio was also affected by forces that are unique to individual bond
market sectors. For example, U.S. Treasury securities during the reporting
period provided attractive returns compared to other market sectors. That's
because the federal budget surplus has reduced the government's need to borrow,
and the U.S. Treasury Department announced its intention to use a portion of the
budget surplus to buy back higher yielding, long-term bonds. With a reduced
supply of U.S. Treasury securities and strong demand from domestic and foreign
investors, prices of these securities rose sharply.
What is the portfolio's current strategy?
We are continuing our efforts to invest the portfolio's assets in areas of the
bond market that we believe offer attractive opportunities. Our management
strategy was designed to help us balance the benefits of locking in prevailing
yields while maintaining the flexibility to capture higher yields as they become
available.
As of June 30, 2000, the portfolio was primarily invested in U.S. Treasury
securities and U.S. Government agency securities. We have also established
smaller positions in corporate bonds and asset-backed securities. It is
currently our intention to gradually build on our asset-backed and corporate
bond holdings, including a modest position in high yield corporate bonds.
Although we may invest in bonds of foreign governments and corporations in the
future, we have not yet established a position in this area.
Approximately 61% of the portfolio's net assets are currently invested in U.S.
Government agency securities -- primarily mortgage-backed securities issued by
Federal National Home Mortgage Association ("Fannie Mae") and Federal Home Loan
Corporation ("Freddie Mac"). We believe that these securities are currently
undervalued because of political pressures. Although some government officials
have questioned the agencies' investment policies, we believe that any changes
are unlikely and U.S. Government agency securities' prices can rebound as the
situation is resolved.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES
NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN
CONNECTION WITH INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE
RETURNS. THE RETURN FIGURE PROVIDED REFLECTS THE ABSORPTION OF PORTFOLIO
EXPENSES BY THE DREYFUS CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH
APRIL 30, 2001, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD
THESE EXPENSES NOT BEEN ABSORBED, THE PORTFOLIO'S RETURNS WOULD HAVE BEEN LOWER.
The Portfolio
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
-------------------------------------------------------------------------------- Principal
BONDS AND NOTES--111.4% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED CTFS.--18.1%
Advanta Mortgage Loan Trust,
<S> <C> <C>
Ser. 2000-1, Cl. A-6, 8.30%, 2029 100,000 101,719
Conseco Finance Securitizations,
Ser. 2000-D, Cl. A-3, 7.89%, 2018 100,000 100,031
Countrywide,
Ser. 2000-2, Cl. AF-5, 8.12%, 2031 200,000 199,938
The Money Store Home Equity Trust,
Ser. 1998-B, Cl. AF-8, 6.11%, 2010 200,000 191,375
Residential Asset Securities,
Ser. 1999-KS1, Cl. AI-8, 6.32%, 2030 175,000 163,051
Residential Funding Mortgage Securities II,
Ser. 2000-HI3, Cl. AI-2, 7.97%, 2010 (Insured; AMBAC) 200,000 200,719
956,833
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--7.6%
COMM,
Ser. 2000-FL2A, Cl. E, 7.64%, 2003 100,000 (a,b) 99,958
PNC Mortgage Acceptance,
Ser. 2000-C1, Cl. A-2, 7.61%, 2010 100,000 100,094
Trizec Hahn Office Properties Trust,
Ser. 1999-TOPA, Cl. D, 7.851%, 2007 200,000 (a,b) 200,000
400,052
ELECTRONICS--1.0%
Flextronics International,
Sr. Sub. Notes, 9.875%, 2010 50,000 (a) 50,625
FINANCIAL SERVICES--3.7%
Ford Motor Credit,
Notes, 7.375%, 2009 100,000 97,002
Norwest Financial,
Notes, 7.6%, 2005 100,000 100,948
197,950
FOREIGN--2.4%
Deutsche Telekom International Finance,
Gtd. Notes, 8.25%, 2030 61,000 62,159
State of Qatar,
Bonds, 9.75%, 2030 68,000 (a) 67,235
129,394
-------------------------------------------------------------------------------- Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INSURANCE--2.7%
Hartford Financial Services Group,
Sr. Notes, 7.9%, 2010 100,000 100,039
MONY Group,
Sr. Notes, 8.35%, 2010 45,000 44,263
144,302
OIL AND GAS--3.8%
K N Energy,
Sr. Notes, 6.65%, 2005 100,000 95,720
Valero Energy,
Notes, 8.75%, 2030 100,000 103,850
199,570
REAL ESTATE INVESTMENT TRUST--3.6%
Crescent Real Estate Equities,
Notes, 7%, 2002 100,000 (a) 92,138
Tanger Properties,
Gtd. Notes, 8.75%, 2001 100,000 98,662
190,800
RESIDENTIAL MORTGAGE PASS-THROUGH CTFS.--2.9%
Chase Mortgage Finance,
Ser. 1999-S13, Cl. B-4, 6.5%, 2014 218,278 (a) 154,878
RETAIL--2.1%
Lowe's,
Notes, 8.25%, 2010 45,000 46,058
Saks,
Gtd. Notes, 8.25%, 2008 75,000 66,567
112,625
TELECOMMUNICATIONS-2.1%
Cable & Wireless Optus Finance,
Gtd. Notes, 8%, 2010 113,000 (a) 112,007
U. S. GOVERNMENTS-21.1%
U. S. Treasury Bonds,
6.25%, 5/15/2030 250,000 262,500
U. S. Treasury Notes,
6.5%, 2/15/2010 824,000 851,274
1,113,774
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
-------------------------------------------------------------------------------- Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. GOVERNMENT AGENCIES/MORTGAGE-BACKED--40.3%
Federal Home Loan Mortgage Corp.:
7.5% 500,000 (c) 493,590
REMIC Trust, Gtd. Pass-Through Ctfs.,
Ser. 2067, Cl. PI, 6.5%, 1/15/2024
(Interest Only Obligation) 170,000 (b,d) 50,761
Federal National Mortgage Association:
7.5% 300,000 (c) 295,686
8% 500,000 (c) 502,185
Government National Mortgage Association II:
6% 200,000 (c,e) 195,812
6.5% 100,000 (c,e) 98,937
7.5% 300,000 (c) 296,625
8%, 2/20/2034 197,926 199,163
2,132,759
TOTAL BONDS AND NOTES
(cost $5,853,525) 5,895,569
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SHORT-TERM INVESTMENTS-37.1%
------------------------------------------------------------------------------------------------------------------------------------
U. S. GOVERNMENT AGENCIES;
Federal Home Loan Banks,
Discount Notes,
6.5%, 7/3/2000
(cost $1,964,290) 1,965,000 1,964,290
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TOTAL INVESTMENTs (cost $7,817,815) 148.5% 7,859,859
LIABILITIES, LESS CASH AND RECEIVABLES (48.5%) (2,568,834)
NET ASSETS 100.0% 5,291,025
(A) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT JUNE 30, 2000,
THESE SECURITIES AMOUNTED TO $776,841 OR 14.7% OF NET ASSETS.
(B) VARIABLE RATE SECURITY--INTEREST RATE SUBJECT TO CHANGE PERIODICALLY.
(C) PURCHASED ON A FORWARD COMMITMENT BASIS.
(D) REFLECTS NOTIONAL FACE.
(E) ADJUSTABLE RATE MORTGAGE--INTEREST RATE SUBJECT TO CHANGE PERIODICALLY.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 7,817,815 7,859,859
Receivable for investment securities sold 105,893
Interest receivable 54,750
Due from The Dreyfus Corporation and affliliates 2,298
8,022,800
--------------------------------------------------------------------------------
LIABILITIES ($):
Cash overdraft due to Custodian 566,906
Payable for investment securities purchased 2,154,295
Accrued expenses 10,574
2,731,775
--------------------------------------------------------------------------------
NET ASSETS ($) 5,291,025
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 5,226,618
Accumulated undistributed investment income--net 26,542
Accumulated net realized gain (loss) on investments (4,179)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3(b) 42,044
--------------------------------------------------------------------------------
NET ASSETS ($) 5,291,025
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
418,174
NET ASSET VALUE, offering and redemption price per share ($) 12.65
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
from May 1, 2000 (commencement of operations) to June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 57,087
EXPENSES:
Investment advisory fee--Note 2(a) 5,131
Auditing fees 3,750
Legal fees 3,000
Prospectus and shareholders' reports 1,670
Registration fees 1,626
Custodian fees--Note 2(a) 765
Shareholder servicing costs 10
Miscellaneous 590
TOTAL EXPENSES 16,542
Less--expense reimbursement from The Dreyfus Corporation
due to undertaking--Note 2(a) (9,703)
NET EXPENSES 6,839
INVESTMENT INCOME--NET 50,248
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (4,179)
Net unrealized appreciation (depreciation) on investments 42,044
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 37,865
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 88,113
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
from May 1, 2000 (commencement of operations) to June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 50,248
Net realized gain (loss) on investments (4,179)
Net unrealized appreciation (depreciation)
on investments 42,044
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 88,113
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (23,706)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 5,669,287
Dividends reinvested 23,706
Cost of shares redeemed (466,375)
INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST TRANSACTIONS 5,226,618
TOTAL INCREASE (DECREASE) IN NET ASSETS 5,291,025
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period --
END OF PERIOD 5,291,025
Undistributed investment income--net 26,542
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 453,162
Shares issued for dividends reinvested 1,909
Shares redeemed (36,897)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 418,174
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
FINANCIAL HIGHLIGHTS (Unaudited)
The following table describes the performance for the period from May 1, 2000
(commencement of operations) to June 30, 2000. Total return shows how much your
investment in the portfolio would have increased (or decreased) during the
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the portfolio's financial statements.
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.50
Investment Operations:
Investment income--net .12
Net realized and unrealized gain (loss) on investments .09
Total from Investment Operations .21
Distributions:
Dividends from investment income--net (.06)
Net asset value, end of period 12.65
--------------------------------------------------------------------------------
TOTAL RETURN (%) 10.05(a)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .80(a)
Ratio of net investment income to average net assets 5.86(a)
Decrease reflected in above expense ratio
due to undertakings by The Dreyfus Corpoaration 1.13(a)
Portfolio Turnover Rate 162.16(b)
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 5,291
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company, operating as a series company currently offering twelve
series, including the Core Bond Portfolio (the "portfolio"), which commenced
operations on May 1, 2000. The portfolio is only offered to separate accounts
established by insurance companies to fund variable annuity contracts and
variable life insurance policies. The portfolio is a diversified series. The
portfolio's investment objective is to maximize total return through capital
appreciation and current income. The Dreyfus Corporation ("Dreyfus") serves as
the portfolio's investment adviser. Dreyfus is a direct subsidiary of Mellon
Bank, N.A. ("Mellon"), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Dreyfus Service Corporation ("DSC"), a wholly-owned subsidiary of
Dreyfus is the distributor of the portfolio's shares, which are sold to the
public without a sales charge.
As of June 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held 401,900 shares of the portfolio.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding short-term
investments, other than U.S. Treasury Bills, and financial futures) are valued
each business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily available
and are representative of the bid side of the market in the judgment of the
Service are valued at the
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
mean between the quoted bid prices (as obtained by the Service from dealers in
such securities) and asked prices (as calculated by the Service based upon its
evaluation of the market for such securities) . Other investments (which
constitute a majority of the portfolio securities) are carried at fair value as
determined by the Service, based on methods which include consideration of:
yields or prices of securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Securities
for which there are no such valuations are valued at fair value as determined in
good faith under the direction of the Board of Trustees. Short-term investments,
excluding U.S. Treasury Bills, are carried at amortized cost, which approximates
value. Financial futures are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market on each business day.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio receives
net earnings credits based on available cash balances left on deposit.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net are declared and paid monthly. Dividends
from net realized capital gain, if any, are normally declared and paid annually,
but the portfolio may make distributions on a more frequent basis to comply with
the distribution requirements of the Internal Revenue Code of 1986, as amended
(the "Code" ). To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy of the portfolio not to
distribute such gain.
On June 30, 2000, the Board of Trustees declared a cash dividend of $.063 per
share from undistributed investment income-net, payable on July 3, 2000
(ex-dividend date) to shareholders of record as of the close of business on June
30, 2000.
(D) FEDERAL INCOME TAXES: It is the policy of the portfolio to qualify as a
regulated investment company, if such qualification is in the best interests of
its shareholders, by complying with the applicable provisions of the Code, and
to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Investment Advisory Fee and Other Transactions With Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of .60 of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from May 1, 2000 through April 30, 2001, to reduce the investment
advisory fee and reimburse such excess expenses paid by the portfolio, to the
extent that the portfolio's aggregate annual expenses, exclusive of taxes,
brokerage fees, interest on borrowings and extraordinary expenses, exceed an
annual rate of .80 of 1% of the value of the portfolio's average daily net
assets. The expense reimbursement, pursuant to the undertaking, amounted to
$9,703 during the period ended June 30, 2000.
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $2 pursuant to the
transfer agency agreement.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The portfolio compensates Mellon under a custody agreement for providing
custodial services for the portfolio. During the period ended June 30, 2000, the
portfolio was charged $765 pursuant to the custody agreement.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $25,000
and an attendance fee of $4,000 for each in person meeting and $500 for
telephone meetings. These fees are allocated among the funds in the Fund Group.
The Chairman of the Board receives an additional 25% of such compensation.
Subject to the fund's Emeritus Program Guidelines, Emeritus Board members, if
any, receive 50% of the fund's annual retainer fee and per meeting fee paid at
the time the Board member achieves emeritus status.
NOTE 3--Securities Transactions:
(A) The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the period ended
June 30, 2000, amounted to $14,384,308 and $8,526,847, respectively.
(B) At June 30, 2000, accumulated net unrealized appreciation on investments,
was $42,044, consisting of $46,557 gross unrealized appreciation and $4,513
gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus
Investment Portfolios,
Core Bond Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 165SA006
Dreyfus
Investment Portfolios,
Core Value Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios,
Core Value Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Core Value Portfolio, covering the six-month period from January 1,
2000 through June 30, 2000. Inside, you'll find valuable information about how
the portfolio was managed during the reporting period, including a discussion
with the portfolio manager, Valerie J. Sill.
While stock prices were little changed on average over the past six months, the
period was marked by high levels of volatility and dramatic shifts in investor
sentiment. Between January and mid-March, large-cap stocks generally continued
to advance, led by fast-growing technology stocks that, many investors believed,
would benefit most from the "new economy." Subsequently, however, technology
stocks corrected sharply over concerns about rising interest rates and extremely
high valuations. Other sectors of the large-cap stock market also declined,
erasing the gains achieved earlier in the year.
Also, primarily because of the precipitous drop in technology stock prices,
value-oriented stocks generally outperformed growth stocks during the reporting
period, a reversal of the trend established over the past several years. In
addition, small-capitalization stocks generally outperformed large-cap stocks,
particularly in the value-oriented segment of the market. In our view, these
short-term swings in investor sentiment highlight once again the importance of
broad diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, Core Value
Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Valerie J. Sill, Portfolio Manager
How did Dreyfus Investment Portfolios, Core Value Portfolio perform relative to
its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
Core Value Portfolio produced a total return of -0.39%.(1) In comparison, the
portfolio's benchmark, the Standard & Poor's 500/BARRA Value Index produced a
total return of -4.07% for the same period.(2)
During the first two months of 2000, investors preferred high-flying growth
stocks such as Internet companies over more conservative businesses that posted
solid profits. However, by early March, economic and inflation data heightened
investor concerns about the high prices that they were paying for growth stocks.
As a result, a shift back to the fundamentals of stock analysis took place and,
in turn, a shift to the more reasonably priced value stocks. By late May, the
efforts made by the Federal Reserve Board to slow the economy and fight
inflation appeared successful and growth stocks became popular again.
What is the portfolio's investment approach?
The portfolio invests primarily in companies that are considered undervalued
based on traditional measures such as price-to-earnings ratios. In choosing
stocks, we use a bottom-up stock selection approach that focuses on individual
companies, rather than a top-down approach that forecasts market trends. We also
focus on a company' s relative value, financial strength, sales and earnings
momentum and likely catalysts that could ignite the stock price.
What other factors influenced the portfolio's performance?
One positive factor in the portfolio's performance was its strong emphasis on
the pharmaceutical sector, one of the best performing stock groups during the
period. Historically, pharmaceuticals were con-
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
sidered a growth category because the companies produced higher growth in
earnings than the stock market as a whole and investors were willing to pay
premium prices for that. However, in the past year, pharmaceutical stocks
behaved more like a value sector, coming down in price for two reasons. First,
growth investors appeared to be fixated on the growth potential of technology
stocks which were perceived to be higher than the growth potential offered by
pharmaceutical companies. And second, the United States Congress began debating
the merits of expanding Medicare to cover prescription drugs. That debate was
viewed as a threat to the companies' profits because Medicare reimbursement to
hospitals had already adversely impacted that industry.
In addition, concerns at individual companies further depressed pharmaceutical
stock prices. For example, Abbott Laboratories, a company that was forced by
federal regulators to recall a number of diagnostic tests on the market, had
their stock price fall sharply as a result of the recall. The stock of American
Home Products was hurt because of litigation over one of its diet products and
the perceived cost of settlement. We viewed these developments as buying
opportunities, and the stocks have since appreciated in value. By the second
quarter of 2000, pharmaceutical companies continued to post strong earnings
while technology stocks faltered.
Another positive factor affecting performance was our ability to spot
"miscellaneous" underpriced stocks in a variety of industries. For instance, in
media and entertainment, Disney (Walt), which owns the ABC television network,
began producing extremely strong profits during the portfolio's reporting
period, largely due to the success of the "Who Wants To Be A Millionaire"
program. In the brokerage industry, both Morgan Stanley Dean Witter & Co. and
Citigroup benefited from unusually high stock market volatility and trading
volumes during the first half of 2000. In technology, the portfolio benefited
from Netherlands-based Koninklijke (Royal) Philips Electronics' success in
satisfying the booming global demand for semiconductors, the building blocks for
computers and other electronic devices.
However, the portfolio's performance was hampered by its holdings in the banking
industry, which continued to perform poorly due to the rising interest-rate
environment. In addition, economically cyclical companies, such as those in the
chemicals and paper industries, began the year strong but performed poorly in
the second quarter as the U.S. economy began to slow down.
What is the portfolio's current strategy?
Regardless of whether growth or value style of investing is in favor at the
moment, our strategy remains consistent. We will continue to look for
undervalued stocks that, in our opinion, have the potential to provide strong
stock price performance regardless of their industry. In addition, we believe
the portfolio should benefit from the renewed respect among the investment
community for companies that post strong profits. Even with the resurgence in
stock prices toward the end of June, we believe that there is a wide selection
of attractively priced companies available to us.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT THE
DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. THE RETURN
FIGURE PROVIDED REFLECTS THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURN WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD & POOR'S 500/BARRA VALUE
INDEX IS A CAPITALIZATION-WEIGHTED INDEX OF ALL THE STOCKS IN THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500 INDEX") THAT HAVE LOW
PRICE-TO-BOOK RATIOS. THE S&P 500 INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF
U.S. STOCK MARKET PERFORMANCE.
The Portfolio
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--95.7% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
APPLIANCES--2.6%
<S> <C> <C>
Koninklijke (Royal) Philips Electronics 10,236 486,210
BANKING--1.1%
Bank of America 4,878 209,754
BASIC INDUSTRIES--5.9%
Dow Chemical 9,600 289,800
duPont (E.I.) deNemours & Co. 9,851 430,981
Georgia-Pacific 6,700 175,875
PPG Industries 2,100 93,056
Union Carbide 2,100 103,950
1,093,662
BEVERAGES & TOBACCO--.4%
Philip Morris Cos. 3,000 79,688
BROADCASTING & PUBLISHING--1.8%
McGraw-Hill Cos. 6,100 329,400
CAPITAL GOODS--8.9%
Boeing 10,500 439,031
Caterpillar 4,700 159,213
Deere & Co. 2,800 103,600
Honeywell International 5,900 198,756
Ingersoll-Rand 3,000 120,750
Pitney Bowes 4,800 192,000
United Technologies 7,400 435,675
1,649,025
CONSUMER DURABLES--1.3%
Ford Motor 5,500 236,500
Visteon 720 8,732
245,232
CONSUMER NON-DURABLES--1.1%
Kimberly-Clark 3,600 206,550
CONSUMER SERVICES--7.9%
Disney (Walt) 7,600 294,975
Federated Department Stores 6,100 (a) 205,875
First Data 3,800 188,575
Knight-Ridder 3,500 186,156
Seagram 7,500 435,000
TJX Cos. 7,800 146,250
1,456,831
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ENERGY--14.2%
Conoco, Cl. B 16,884 414,713
Exxon Mobil 9,552 749,832
Halliburton 7,700 363,344
Phillips Petroleum 1,600 81,100
Texaco 12,300 654,975
Williams Cos. 8,700 362,681
2,626,645
FINANCIAL SERVICES--20.5%
AXA Financial 5,100 173,400
Aetna 1,400 89,862
American General 2,000 122,000
American International Group 3,731 438,393
Chase Manhattan 11,450 527,416
Citigroup 7,350 442,837
Fannie Mae 5,300 276,594
First Union 3,900 96,769
FleetBoston Financial 16,606 564,604
Golden State Bancorp 8,000 (a) 144,000
Goldman Sachs Group 1,200 113,850
Marsh & McLennan Cos. 2,500 261,094
Morgan Stanley Dean Witter & Co. 4,400 366,300
Wells Fargo 4,600 178,250
3,795,369
HEALTH CARE--7.4%
Abbott Laboratories 9,200 409,975
American Home Products 4,900 287,875
HCA-The Healthcare Company 3,200 97,200
Merck & Co. 3,000 229,875
Pharmacia 3,141 162,350
Wellpoint Health Networks 2,400 (a) 173,850
1,361,125
INSURANCE--.8%
CIGNA 1,500 140,250
TECHNOLOGY--7.5%
Advanced Micro Devices 1,400 (a) 108,150
Computer Associates International 2,000 102,375
Electronic Data Systems 1,600 66,000
Hewlett-Packard 2,275 284,091
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Informix 12,700 (a) 94,456
International Business Machines 4,700 514,944
Microsoft 2,700 (a) 216,000
1,386,016
TELECOMMUNICATIONS--3.0%
Cable & Wireless, ADS 5,200 260,325
Sprint (FON Group) 5,900 300,900
561,225
TRANSPORTATION--2.4%
Canadian Pacific 7,500 196,406
Southwest Airlines 5,400 102,263
Union Pacific 3,900 145,031
443,700
UTILITIES--8.9%
British Telecommunications, ADR 2,200 290,950
Duke Energy 4,950 279,056
FPL Group 5,800 287,100
GTE 7,500 466,875
SBC Communications 3,800 164,350
Telephone & Data Systems 1,600 160,400
1,648,731
TOTAL COMMON STOCKS
(cost $17,317,430) 17,719,413
------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--2.6%
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER SERVICES
News Corp, ADR
(cost $320,665) 10,050 477,375
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--4.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. GOVERNMENT AGENCY;
Federal Home Loan Banks
6.57%, 7/3/2000
(cost $749,726) 750,000 749,726
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $18,387,821) 102.3% 18,946,514
LIABILITIES, LESS CASH AND RECEIVABLES (2.3%) (427,871)
NET ASSETS 100.0% 18,518,643
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 18,387,821 18,946,514
Cash 23,299
Receivable for investment securities sold 107,056
Dividends receivable 15,487
Prepaid expenses 16,698
19,109,054
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 14,434
Payable for investment securities purchased 553,862
Accrued expenses and other liabilities 22,115
590,411
--------------------------------------------------------------------------------
NET ASSETS ($) 18,518,643
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 17,571,151
Accumulated undistributed investment income--net 65,852
Accumulated net realized gain (loss) on investments 322,947
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 558,693
--------------------------------------------------------------------------------
NET ASSETS ($) 18,518,643
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
1,335,913
NET ASSET VALUE, offering and redemption price per share ($) 13.86
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $674 foreign taxes withheld at source) 129,340
Interest 17,138
TOTAL INCOME 146,478
EXPENSES:
Investment advisory fee--Note 3(a) 60,611
Prospectus and shareholders' reports 9,050
Auditing fees 7,753
Custodian fees--Note 3(a) 5,787
Legal fees 4,859
Registration fees 885
Trustees' fees and expenses--Note 3(b) 644
Shareholder servicing costs 221
Miscellaneous 4,124
TOTAL EXPENSES 93,934
Less--reduction in investment advisory fee due to
undertaking--Note 3(a) (13,120)
NET EXPENSES 80,814
INVESTMENT INCOME--NET 65,664
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 412,279
Net unrealized appreciation (depreciation) on investments (590,757)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (178,478)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (112,814)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 65,664 60,207
Net realized gain (loss) on investments 412,279 280,590
Net unrealized appreciation
(depreciation) on investments (590,757) 1,104,740
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (112,814) 1,445,537
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net -- (66,069)
Net realized gain on investments (65,159) --
TOTAL DIVIDENDS (65,159) (66,069)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 4,884,076 11,031,262
Dividends reinvested 65,159 66,069
Cost of shares redeemed (1,595,395) (3,092,776)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 3,353,840 8,004,555
TOTAL INCREASE (DECREASE) IN NET ASSETS 3,175,867 9,384,023
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 15,342,776 5,958,753
END OF PERIOD 18,518,643 15,342,776
Undistributed investment income--net 65,852 188
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 348,450 821,212
Shares issued for dividends reinvested 4,602 4,861
Shares redeemed (115,719) (235,841)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 237,333 590,232
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended December 31,
-------------------------
(Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C>
Net asset value, beginning of period 13.97 11.72 12.50
Investment Operations:
Investment income--net .06(b) .07(b) .07
Net realized and unrealized
gain (loss) on investments (.11) 2.24 (.77)
Total from Investment Operations (.05) 2.31 (.70)
Distributions:
Dividends from investment income--net -- (.06) (.08)
Dividends from net realized gain on investments (.06) -- --
Total Distributions (.06) (.06) (.08)
Net asset value, end of period 13.86 13.97 11.72
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (.39)(c) 19.73 (5.59)(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .50(c) 1.00 .67(c)
Ratio of net investment income
to average net assets .40(c) .56 .62(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .08(c) .50 .74(c)
Portfolio Turnover Rate 50.17(c) 97.14 47.37(c)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 18,519 15,343 5,959
(A) FROM MAY 1, 1998 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company, operating as a series company currently offering twelve
series, including the Core Value Portfolio (the "portfolio"). The portfolio is
only offered to separate accounts established by insurance companies to fund
variable annuity contracts and variable life insurance policies. The portfolio
is a diversified series. The portfolio's investment objective is to provide
long-term capital growth. The Dreyfus Corporation ("Dreyfus") serves as the
portfolio's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank,
N.A., ("Mellon") which is a wholly-owned subsidiary of Mellon Financial
Corporation. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of Dreyfus became the distributor of the portfolio's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
As of June 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held 406,195 shares of the portfolio.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
there were no transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available. Securities for
which there are no such valuations are valued at fair value as determined in
good faith under the direction of the Board of Trustees. Investments denominated
in foreign currencies are translated to U.S. dollars at the prevailing rates of
exchange. Forward currency exchange contracts are valued at the forward rate.
(b) Foreign currency transactions: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $359 during the period ended June 30, 2000 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(e) Federal income taxes: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2-Bank Line of Credit:
The portfolio participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
portfolio at rates which are related to the Federal Funds rate in effect at the
time of borrowings. During the period ended June 30, 2000, the portfolio did not
borrow under the line of credit.
NOTE 3--Investment Advisory Fee and Other Transactions With Affiliates:
(a) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of .75 of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31, 2000, to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio' s aggregate annual expenses,
exclusive of taxes, brokerage
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
fees, interest on borrowings and extraordinary expenses, exceed an annual rate
of 1% of the value of the portfolio's average daily net assets. The reduction in
investment advisory fee, pursuant to the undertaking, amounted to $13,120 during
the period ended June 30, 2000.
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $44 pursuant to the
transfer agency agreement.
The portfolio compensates Mellon under a custody agreement for providing
custodial services for the portfolio. During the period ended June 30, 2000, the
portfolio was charged $5,787 pursuant to the custody agreement.
(b) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$11,911,250 and $7,897,948, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$558,693, consisting of $1,905,623 gross unrealized appreciation and $1,346,930
gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Portfolio
For More Information
Dreyfus
Investment Portfolios,
Core Value Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 172SA006
Dreyfus
Investment Portfolios,
MidCap Stock Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
15 Financial Highlights
16 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios,
MidCap Stock Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, MidCap Stock Portfolio, covering the six-month period from January
1, 2000 through June 30, 2000. Inside, you'll find valuable information about
how the portfolio was managed during the reporting period, including a
discussion with the portfolio manager, John O'Toole.
While midcap stock prices were, as measured by the Russell Midcap Index,
modestly higher over the past six months, the period was marked by high levels
of volatility and dramatic shifts in investor sentiment. Between January and
mid-March, stocks of all sizes generally continued to advance, led by
fast-growing technology stocks that, many investors believed, would benefit most
from the "new economy." Subsequently, however, technology stocks corrected
sharply over concerns about rising interest rates and extremely high valuations.
Other sectors of the stock market also declined, erasing most of the gains
achieved earlier in the year.
Overall, mid-capitalization stocks generally outperformed large-cap and
small-cap stocks during the period, particularly in the growth-oriented segment
of the market, which is dominated by technology companies. In our view, these
short-term swings in investor sentiment highlight once again the importance of
broad diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, MidCap Stock
Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
John O'Toole, Portfolio Manager
How did Dreyfus Investment Portfolios, MidCap Stock Portfolio perform relative
to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
MidCap Stock Portfolio produced a total return of 6.63%.(1 )In contrast, the
Standard & Poor's MidCap 400 Index (the "S&P MidCap 400 Index"), the portfolio's
benchmark, produced a total return of 9.06% for the same period.(2)
Much of the portfolio's underperformance of the S&P MidCap 400 Index during the
reporting period is attributable to growth stocks overwhelmingly outperforming
value stocks in the first quarter of 2000. Our quantitative model examines a
mixture of growth and value characteristics, without strongly favoring either.
The model does not work as well in a polarized market environment, such as the
one that prevailed in the first quarter of 2000, where one investment style
dominates another.
What is the portfolio's investment approach?
The portfolio invests primarily in mid-capitalization companies chosen through a
disciplined process that combines computer analysis with human judgment. The
quantitatively driven valuation process identifies and ranks approximately 2,500
midcap stocks as attractive, neutral or unattractive investments, based on more
than a dozen different valuation inputs. Those inputs, which we believe can have
an important influence on stock returns, include earnings estimates, profit
margins and growth in cash flow. We establish weights for each of these factors
based on our analysis of which factors are being rewarded by investors, making
adjustments along the way for the uniqueness of various industries and economic
sectors. For example, the equity markets may be rewarding companies with strong
growth in cash flow, in which case we would add more weight to that factor.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
Then, our investment management team conducts fundamental research on each
stock, which ultimately results in their buy-and-sell recommendations. We seek
to have the portfolio own the best-performing midcap stocks within each economic
sector.
What other factors influenced the portfolio's performance?
During the past six months, midcap stocks were among the best-performing stock
groups in the equity universe. That's a marked change from the late 1990s, when
investors flocked to large-cap companies because they posted such strong
earnings growth. More recently, midcap companies have become attractive because
of their often strong growth prospects and their relatively modest stock
valuations. Indeed, the strong performance of midcap stocks was a positive
factor in the portfolio's results.
Biotechnology was one of the top-performing midcap areas during the period.
Recently, the federal government and private industry scientists announced that
they had deciphered the genetic code for human life. Among other benefits, this
scientific discovery may make it possible for biotechnology companies to develop
more effective drugs to treat diseases. As a result, the stock price of
portfolio holding Waters more than doubled during the reporting period. Waters
is a provider of laboratory products and services to the pharmaceutical,
chemical and environmental testing industries.
Although technology experienced tremendous volatility during the reporting
period, investors expressed a clear preference for companies with solid earnings
and shunned Internet companies that had losses and questionable business models.
Sanmina, a very profitable manufacturer of electronic components for major
computer corporations, was an example of one of the portfolio's holdings in
technology that was preferred by investors.
As the world's telecommunication system makes the transition from copper to more
advanced technologies, companies like CIENA Corp. are developing the next
generation of fiber optic networks. The booming growth of the Internet has
enabled many of these telecommunications companies to generate tremendous
growth, which is why CIENA's stock price nearly doubled during the reporting
period.
Another group of companies in the portfolio performed very well, not because of
the good fortunes of their respective industries, but because the individual
companies met or exceeded profit expectations. Those stocks included Dollar Tree
Stores, an operator of discount variety stores, Santa Fe International, an oil
drilling company that took advantage of rising oil prices, and Quanta Services,
a construction company that specializes in the telecommunications, cable
television and electric power industries. In contrast, a large majority of the
stocks that did not perform well were those of companies that produced
disappointing earnings, such as BJ's Wholesale Club, Dial and USFreightways.
What is the portfolio's current strategy?
We continue to follow our quantitatively driven computer model and use
fundamental analysis for selecting stocks. We also continue to believe that the
midcap sector of the market represents a collection of very dynamic and
interesting companies whose stock valuations are still often lower than their
large-cap counterparts.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD & POOR'S MIDCAP 400 INDEX
IS A WIDELY ACCEPTED, UNMANAGED TOTAL RETURN INDEX MEASURING THE PERFORMANCE OF
THE MIDSIZED COMPANY SEGMENT OF THE U.S. STOCK MARKET.
<TABLE>
<CAPTION>
The Portfolio
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--95.3% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICAL--9.1%
<S> <C> <C>
BJ's Wholesale Club 8,700 (a) 287,100
Blyth 5,500 162,250
Brinker International 5,400 (a) 157,950
Brunswick 4,900 81,156
Darden Restaurants 8,300 134,875
Dollar Tree Stores 10,800 (a) 427,275
Johnson Controls 2,950 151,372
Leggett & Platt 5,700 94,050
Liz Claiborne 3,350 118,087
MGM Grand 7,600 244,150
Miller (Herman) 4,400 113,850
Navistar International 2,000 (a) 62,125
Park Place Entertainment 9,500 (a) 115,781
Ross Stores 14,700 250,819
TJX Cos. 12,300 230,625
UAL 1,700 98,919
Zale 5,700 (a) 208,050
2,938,434
CONSUMER STAPLES--2.7%
Dial 4,300 44,612
Hormel Foods 8,400 141,225
Lancaster Colony 3,700 72,150
McCormick & Co. 4,700 152,750
Pepsi Bottling Group 3,900 113,831
SUPERVALU 6,700 127,719
Wrigley, (Wm.) Jr. 2,550 204,478
856,765
ENERGY--9.1%
Amerada Hess 3,400 209,950
BJ Services 5,600 (a) 350,000
ENSCO International 9,000 322,312
Equitable Resources 5,300 255,725
KeySpan 8,200 252,150
Murphy Oil 3,700 219,919
Noble Affiliates 3,900 145,275
Noble Drilling 7,500 (a) 308,906
Peoples Energy 5,500 178,063
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ENERGY (CONTINUED)
Questar 7,300 141,437
Rowan Cos. 6,400 (a) 194,400
Santa Fe International 4,100 143,244
Ultramar Diamond Shamrock 8,200 203,463
2,924,844
HEALTH CARE--13.1%
Allergan 4,600 342,700
Andrx 2,800 (a) 178,981
Bausch & Lomb 1,650 127,669
Biomet 6,350 244,078
Chiron 7,900 (a) 375,250
Cytyc 3,150 (a) 168,131
Forest Laboratories 1,700 (a) 171,700
IVAX 18,500 (a) 767,750
Lincare Holdings 5,100 (a) 125,587
MedImmune 4,950 (a) 366,300
Millennium Pharmaceuticals 1,500 (a) 167,813
Patterson Dental 1,400 (a) 71,400
Quest Diagnostics 3,800 (a) 271,937
Stryker 3,400 148,750
Trigon Healthcare 3,100 (a) 159,844
Universal Health Services, Cl. B 4,500 (a) 294,750
Waters 1,800 (a) 224,663
4,207,303
INTEREST SENSITIVE--10.2%
Associated Banc-Corp 4,570 99,683
City National 7,100 246,725
Cullen/Frost Bankers 3,700 97,356
Dime Bancorp 7,900 124,425
Edwards (A.G.) 6,150 239,850
Gallagher (Arthur J.) & Co. 5,000 210,000
Golden West Financial 5,200 212,225
Mercantile Bankshares 6,500 193,781
Metris Cos. 11,100 278,888
Nationwide Financial Services, Cl. A 4,700 154,513
North Fork Bancorporation 11,900 179,987
PMI Group 5,600 266,000
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INTEREST SENSITIVE (CONTINUED)
Pacific Century Financial 9,800 143,325
Paine Webber Group 1,750 79,625
Radian Group 4,100 212,175
T. Rowe Price Associates 6,600 280,500
UnionBanCal 4,800 89,100
Union Planters 6,800 189,975
3,298,133
INTERNET RELATED--1.7%
iXL Enterprises 2,400 34,800
Portal Software 3,350 (a) 213,981
Proxicom 4,100 (a) 196,288
Scient 2,200 (a) 97,075
542,144
PRODUCER GOODS--8.6%
American Power Conversion 3,800 (a) 155,087
Briggs & Stratton 2,850 97,613
CNF Transportation 2,700 61,425
Centex 4,300 101,050
Centex Construction Products 1,550 35,166
Cytec Industries 6,800 (a) 167,875
Eastman Chemical 3,200 152,800
Engelhard 7,600 129,675
Georgia-Pacific Group 6,000 157,500
Helix Technology 3,200 124,800
Kansas City Southern Industries 2,550 226,153
Louisiana-Pacific 9,200 100,050
Lyondell Chemical 8,600 144,050
Parker-Hannifin 2,950 101,037
Phelps Dodge 3,500 130,156
Quanta Services 5,900 (a) 324,500
Sealed Air 2,500 (a) 130,937
Sherwin-Williams 10,400 220,350
USFreightways 2,800 68,775
United Parcel Service, Cl. B 2,400 141,600
2,770,599
SERVICES--12.1%
Belo (A.H.), Cl. A 7,000 121,188
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SERVICES (CONTINUED)
Convergys 4,200 (a) 217,875
DST Systems 4,100 (a) 312,113
DeVry 6,900 (a) 182,419
Dow Jones & Co. 2,000 146,500
Fox Entertainment Group, Cl. A 6,600 (a) 200,475
Hertz, Cl. A 5,400 151,537
Hispanic Broadcasting 3,900 (a) 129,187
Knight-Ridder 2,500 132,969
MarchFirst 3,522 (a) 64,277
McClatchy, Cl. A 2,100 69,562
NOVA 4,900 (a) 136,894
Pulitzer 900 37,969
Robert Half International 9,800 (a) 279,300
SunGard Data Systems 8,400 (a) 260,400
TMP Worldwide 2,700 (a) 199,294
Telephone & Data Systems 1,900 190,475
True North Communications 3,400 149,600
United States Cellular 2,200 (a) 138,600
Univision Communications, Cl. A 2,050 (a) 212,175
Viad 9,500 258,875
Westwood One 3,400 (a) 116,025
Young & Rubicam 3,200 183,000
3,890,709
TECHNOLOGY--20.9%
Atmel 5,900 (a) 217,563
Avnet 2,900 171,825
BEA Systems 2,200 (a) 108,763
CIENA 1,900 (a) 316,706
Credence Systems 2,500 (a) 137,969
Cypress Semiconductor 5,400 (a) 228,150
Digital Lightwave 1,600 (a) 160,800
Intuit 10,600 (a) 438,575
Jabil Circuit 5,400 (a) 267,975
Kulicke & Soffa Industries 2,400 (a) 142,500
Lattice Semiconductor 1,800 (a) 124,425
Macrovision 2,200 (a) 140,628
Microchip Technology 5,500 (a) 320,461
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
NVIDIA 5,600 (a) 355,950
Novellus Systems 5,100 (a) 288,469
Power-One 1,600 (a) 182,300
Powerwave Technologies 5,100 (a) 224,400
Rational Software 3,000 (a) 278,812
SDL 750 (a) 213,891
SanDisk 1,900 (a) 116,256
Sanmina 3,200 (a) 273,600
Sawtek 3,300 (a) 189,956
Semtech 2,400 (a) 183,562
Sybase 8,900 (a) 204,700
Symantec 4,800 (a) 258,900
Synopsys 4,700 (a) 162,444
Tech Data 3,900 (a) 169,894
TranSwitch 1,500 (a) 115,781
Varian Semiconductor Equipment Associates 2,400 (a) 150,750
Vignette 2,050 (a) 106,632
Vishay Intertechnology 7,450 (a) 282,634
Vitesse Semiconductor 2,500 (a) 183,906
6,719,177
UTILITIES--7.8%
Allegheny Energy 10,500 287,438
Constellation Energy Group 8,200 267,013
DTE Energy 5,900 180,319
Dynegy, Cl. A 6,000 409,875
Energy East 8,600 163,937
GPU 5,500 148,844
ITXC 4,300 152,247
Illuminet Holdings 2,400 122,100
NSTAR 6,800 276,675
Northern States Power 5,200 104,975
OGE Energy 10,550 195,175
Pinnacle West Capital 3,700 125,337
TECO Energy 4,700 94,294
2,528,229
TOTAL COMMON STOCKS
(cost $29,479,640) 30,676,337
Principal
SHORT-TERM INVESTMENTS--4.1% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT;
Greenwich Capital Markets,Tri-Party
Repurchase Agreement, 6.58%, dated
6/30/2000, due 7/3/2000, in the amount
of $1,320,724 (fully collateralized by
$1,250,000 U.S. Treasury Inflation Protected
Securities, 3.625%, 7/15/2002, value $1,349,170)
(cost $1,320,000) 1,320,000 1,320,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $30,799,640) 99.4% 31,996,337
CASH AND RECEIVABLES (NET) .6% 190,604
NET ASSETS 100.0% 32,186,941
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments--Note 1(b) 30,799,640 31,996,337
Cash 208,118
Dividends and interest receivable 20,035
Prepaid expenses 17,778
32,242,268
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 22,930
Accrued expenses and other liabilities 32,397
55,327
--------------------------------------------------------------------------------
NET ASSETS ($) 32,186,941
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 29,299,931
Accumulated undistributed investment income--net 43,563
Accumulated net realized gain (loss) on investments 1,646,750
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 1,196,697
--------------------------------------------------------------------------------
NET ASSETS ($) 32,186,941
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
2,245,970
NET ASSET VALUE, offering and redemption price per share ($) 14.33
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends 124,652
Interest 32,674
TOTAL INCOME 157,326
EXPENSES:
Investment advisory fee--Note 3(a) 84,355
Custodian fees--Note 3(a) 16,157
Auditing fees 11,303
Prospectus and shareholders' reports 5,034
Registration fees 4,053
Legal fees 4,003
Shareholder servicing costs 447
Trustees' fees and expenses--Note 3(b) 107
Miscellaneous 3,382
TOTAL EXPENSES 128,841
Less--reduction in investment advisory fee due to
undertaking--Note 3(a) (16,368)
NET EXPENSES 112,473
INVESTMENT INCOME--NET 44,853
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 1,928,255
Net unrealized appreciation (depreciation) on investments (698,636)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 1,229,619
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,274,472
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 44,853 32,597
Net realized gain (loss) on investments 1,928,255 455,052
Net unrealized appreciation (depreciation)
on investments (698,636) 1,039,391
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,274,472 1,527,040
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (1,590) (38,834)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 17,993,538 6,399,007
Dividends reinvested 1,590 38,834
Cost of shares redeemed (2,643,944) (2,869,302)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 15,351,184 3,568,539
TOTAL INCREASE (DECREASE) IN NET ASSETS 16,624,066 5,056,745
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 15,562,875 10,506,130
END OF PERIOD 32,186,941 15,562,875
Undistributed investment income--net 43,563 300
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,279,558 527,232
Shares issued for dividends reinvested 107 2,989
Shares redeemed (191,271) (236,335)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,088,394 293,886
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended December 31,
------------------------
(Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C>
Net asset value, beginning of period 13.44 12.16 12.50
Investment Operations:
Investment income--net .03(b) .03(b) .02
Net realized and unrealized
gain (loss) on investments .86 1.28 (.34)
Total from Investment Operations .89 1.31 (.32)
Distributions:
Dividends from investment income--net .00(c) (.03) (.02)
Net asset value, end of period 14.33 13.44 12.16
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 6.63(d) 10.82 (2.53)(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .50(d) .97 .67(d)
Ratio of net investment income
to average net assets .20(d) .26 .18(d)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .07(d) .49 .60(d)
Portfolio Turnover Rate 52.16(d) 77.73 75.74(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 32,187 15,563 10,506
(A) FROM MAY 1, 1998 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company, operating as a series company currently offering twelve
series, including the MidCap Stock Portfolio (the "portfolio"). The portfolio is
only offered to separate accounts established by insurance companies to fund
variable annuity contracts and variable life insurance policies. The portfolio
is a diversified series. The portfolio's investment objective is to provide
investment results that are greater than the total return performance of
publicly-traded common stocks of medium-size domestic companies in the
aggregate, as represented by the Standard & Poor's MidCap 400 Index. The Dreyfus
Corporation ("Dreyfus") serves as the portfolio's investment adviser. Dreyfus is
a direct subsidiary of Mellon Bank, N.A., ("Mellon") which is a wholly-owned
subsidiary of Mellon Financial Corporation. Effective March 22, 2000, Dreyfus
Service Corporation ("DSC"), a wholly-owned subsidiary of Dreyfus, became the
distributor of the portfolio's shares, which are sold to the public without a
sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
As of June 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held 309,506 shares of the portfolio.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securi
ties exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange or
the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked prices.
Bid price is used when no asked price is available. Securities for which there
are no such valuations are valued at fair value as determined in good faith
under the direction of the Board of Trustees.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $984 during the period ended June 30, 2000 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
The portfolio may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the portfolio's investment adviser, subject to the
seller's agreement to repurchase and the portfolio's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the portfolio's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the terms of the repurchase price plus accrued interest
at all times. If the value of the underlying securities falls below the value of
the repurchase price plus accrued interest, the portfolio will require the
seller to deposit additional collateral by the next business day. If the request
for additional collateral is not met, or the seller defaults on its repurchase
obligation, the portfolio maintains its right to sell the underlying securities
at market value and may claim any resulting loss against the seller.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the portfolio not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
The portfolio has an unused capital loss carryover of approximately $188,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1999. If not
applied, the carryover expires in fiscal 2006.
NOTE 2--Bank Line of Credit:
The portfolio participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
portfolio at rates which are related to the Federal Funds rate in effect at the
time of borrowings. During the period ended June 30, 2000, the portfolio did not
borrow under the line of credit.
NOTE 3--Investment Advisory Fee and Other Transactions With Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of .75 of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31, 2000, to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate annual expenses,
exclusive of taxes, brokerage fees, interest on borrowings and extraordinary
expenses, exceed an annual rate of 1% of the value of the portfolio's average
daily net assets. The reduction in investment advisory fee, pursuant to the
undertaking, amounted to $16,368 during the period ended June 30, 2000.
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $38 pursuant to the
transfer agency agreement.
The portfolio compensates Mellon under a custody agreement for providing
custodial services for the portfolio. During the period ended June 30, 2000, the
portfolio was charged $16,157 pursuant to the custody agreement.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$25,939,471 and $11,361,689, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$1,196,697, consisting of $3,538,199 gross unrealized appreciation and
$2,341,502 gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Investment Portfolios, MidCap Stock Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 174SA006
Dreyfus
Investment Portfolios,
Technology Growth
Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Portfolio
Dreyfus Investment Portfolios, Technology Growth Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Technology Growth Portfolio, covering the six-month period from
January 1, 2000 through June 30, 2000. Inside, you'll find valuable information
about how the portfolio was managed during the reporting period, including a
discussion with the portfolio manager, Mark Herskovitz.
During most of the first quarter of 2000, technology stocks continued to rally
on the strength of investor enthusiasm for the "new economy." In mid-March,
however, investor sentiment changed dramatically amid fears of higher interest
rates. As a result, many technology stocks subsequently fell out of favor, and
many investors shifted their attention to other market sectors. Within the
technology sector, stocks of young, relatively untested Internet companies were
hardest hit, while well-established, profitable companies engaged in the
build-out of data, video and voice telecommunications infrastructure were
generally the most resilient.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, Technology Growth
Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Mark Herskovitz, Primary Portfolio Manager
How did Dreyfus Investment Portfolios, Technology Growth Portfolio perform
relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
Technology Growth Portfolio produced a total return of 13.10%.(1) In comparison,
the Morgan Stanley High Technology 35 Index produced a total return of 10.42%(2)
and the Standard & Poor' s 500 Composite Stock Price Index ("S&P 500 Index")
produced a total return of -0.43% (3) for the same period.
The portfolio's performance was affected by a dramatic shift in market sentiment
away from technology-related stocks, which had reached lofty valuations after a
spectacular 1999, and into formerly out-of-favor industrial and value-oriented
stocks beginning in mid-March. We hasten to add that the correction within the
volatile technology sector was not unexpected, and we continue to urge investors
to maintain a long-term perspective and a diversified investment approach.
What is the portfolio's investment approach?
The portfolio seeks capital appreciation by investing primarily in growth
companies of any size that we believe are leading producers or beneficiaries of
technological innovation. These investments may include companies in the
computer, semiconductor, electronics, communications, health care,
biotechnology, computer software and hardware, electronic components and
systems, networking and cable broadcasting, telecommunications, defense and
aerospace, and environmental sectors.
When evaluating investment opportunities, we first assess economic and market
conditions in an attempt to identify trends that we believe are likely to drive
demand within the various technology-related sectors. Second, we strive to
identify the companies that are most likely to benefit from these overall
trends. Typically, these companies are leaders in their market segments, and are
characterized by rapid earnings growth and dominant market shares. We conduct
extensive fundamental research to understand these companies' competitive
advantages and to
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
evaluate their ability to maintain their leadership positions over time.
This process enables us to select leading technology companies for the
portfolio. Many of those stocks are considered core holdings that we believe
will lead their industry segments over the long term. We complement these
positions with non-core holdings that we believe will provide above-average
gains over a shorter time frame.
Although the portfolio looks for companies with the potential for strong
earnings growth rates, some of the portfolio's investments may currently be
experiencing losses. Moreover, the portfolio may invest in small-, mid- and
large-cap securities in all available trading markets, including initial public
offerings (IPOs) and the aftermarket. The portfolio's strategy with respect to
IPOs is relatively conservative, in that management has chosen only to
participate in IPOs of companies that meet the portfolio's investment criteria
described above and that we believe have the potential to become full positions
within the portfolio.
What other factors influenced the portfolio's performance?
The portfolio's performance was adversely influenced by a dramatic shift in
market sentiment that began in mid-March. Before this change, the stock market's
advance continued to be driven by technology stocks that investors believed
would be most likely to succeed in the "new economy." While we believe that the
strong business fundamentals of these businesses have not changed -- indeed,
they may have improved, in our opinion -- technology stocks had appreciated to
very high prices relative to their earnings, book values and other value
measures.
Investors became concerned that the Federal Reserve Board's efforts to slow
economic growth might cause demand for new technologies to slacken. While there
has been little evidence of a slowdown in demand, a major measure of technology
stock performance, the Nasdaq Composite Index, fell substantially between
mid-March and the end of April, including a notable single-day drop on April 14
On the other hand, the portfolio's performance was positively influenced by our
stock selection and diversification strategies. We continued to focus primarily
on companies that our research indicated were fundamentally sound and in good
positions to prosper from techno-
logical advances. During the six-month period, these included telecommunications
equipment suppliers, computer storage manufacturers, data network providers and
contract manufacturers. We also placed greater emphasis on large,
well-established technology leaders such as Texas Instruments, Oracle and Cisco
Systems. On the other hand, we tended to avoid some of the more speculative
industry groups, including so-called "pure play" Internet companies facing
intense competition and uncertain revenue streams.
What is the portfolio's current strategy?
We have continued to conduct extensive research to identify technology companies
that have strong or improving business fundamentals and rising demand for their
products and services. Accordingly, we have recently begun to focus on companies
that we believe will benefit from advances in technologies for wireless Internet
access.
Despite the recent contraction of valuations, we again caution that technology
stocks are likely to continue to experience high levels of volatility, and
investors should not be surprised to see periodic and significant advances and
declines. As always, our risk management strategy is to maintain a broadly
diversified technology portfolio and to focus on fundamentally sound companies.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN UNDERTAKING IN EFFECT THAT MAY BE EXTENDED,
TERMINATED OR MODIFIED AT ANY TIME. HAD THESE EXPENSES NOT BEEN ABSORBED, THE
PORTFOLIO'S RETURN WOULD HAVE BEEN LOWER.
(2) SOURCE: BLOOMBERG L.P. -- REFLECTS REINVESTMENT OF NET DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY HIGH TECHNOLOGY 35
INDEX IS AN UNMANAGED, EQUAL DOLLAR-WEIGHTED INDEX OF 35 STOCKS FROM THE
ELECTRONICS-BASED SUBSECTORS.
(3) SOURCE: LIPPER INC. -- REFLECTS THE REINVESTMENT OF INCOME DIVIDENDS AND,
WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD & POOR'S 500
COMPOSITE STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK
MARKET PERFORMANCE.
The Portfolio
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--93.1% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMPUTER SERVICES--2.0%
<S> <C> <C>
Automatic Data Processing 62,800 3,363,725
DATA STORAGE--7.8%
Brocade Communications Systems 25,000 (a) 4,587,109
EMC 63,600 (a) 4,893,225
Network Appliance 47,000 (a) 3,783,500
13,263,834
HARDWARE--9.8%
Apple Computer 45,000 (a) 2,356,875
Dell Computer 47,000 (a) 2,317,688
Flextronics International 70,000 (a) 4,808,125
Handspring 5,300 (a) 143,100
Sanmina 45,000 (a) 3,847,500
Sun Microsystems 34,000 (a) 3,091,875
16,565,163
INTERNET--3.0%
CMGI 38,000 (a) 1,740,875
VeriSign 18,700 (a) 3,300,550
5,041,425
NETWORKING--8.3%
Cisco Systems 61,000 (a) 3,877,313
Finisar 50,000 (a) 1,309,375
Juniper Networks 35,000 (a) 5,094,687
Sycamore Networks 34,000 (a) 3,752,750
14,034,125
SEMICONDUCTORS--13.6%
Intel 32,500 4,344,844
Micrel 76,000 (a) 3,301,250
PMC-Sierra 19,000 (a) 3,376,062
Taiwan Semiconductor Manufacturing, ADR 100,000 (a) 3,875,000
Texas Instruments 52,000 3,571,750
Vitesse Semiconductor 60,000 (a) 4,413,750
22,882,656
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT--6.5%
Applied Materials 45,000 (a) 4,078,125
PRI Automation 60,000 (a) 3,923,438
Teradyne 40,000 (a) 2,940,000
10,941,563
SOFTWARE--14.7%
BEA Systems 40,000 (a) 1,977,500
Microsoft 45,000 (a) 3,600,000
Oracle 55,000 (a) 4,623,437
Rational Software 36,500 (a) 3,392,219
Siebel Systems 23,600 (a) 3,860,075
Tibco Software 33,400 (a) 3,581,628
Veritas Software 33,000 (a) 3,729,516
24,764,375
TELECOMMUNICATION EQUIPMENT--17.0%
Ciena 27,500 (a) 4,583,906
JDS Uniphase 30,000 (a) 3,596,250
Lucent Technologies 60,000 3,555,000
Nokia Oyj, ADR 80,000 3,995,000
Nortel Networks 77,000 5,255,250
SDL 14,000 (a) 3,992,625
Tellabs 53,000 (a) 3,627,188
28,605,219
TELECOMMUNICATION SERVICES--10.4%
Metromedia Fiber Network, Cl. A 91,900 (a) 3,647,281
NEXTLINK Communications, Cl. A 90,000 (a) 3,414,375
Qwest Communications International 74,000 (a) 3,676,875
WorldCom 150,000 (a) 6,881,250
17,619,781
TOTAL COMMON STOCKS
(cost $122,920,564) 157,081,866
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM INVESTMENTS--9.3% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS:
5.99%, 8/17/2000 260,000 258,183
5.47%, 8/31/2000 550,000 544,967
5.79%, 9/14/2000 7,529,000 7,442,868
5.67%, 10/5/2000 6,768,000 6,667,089
5.70%, 10/12/2000 762,000 749,770
TOTAL SHORT-TERM INVESTMENTS
(cost $15,656,071) 15,662,877
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $138,576,635) 102.4% 172,744,743
LIABILITIES, LESS CASH AND RECEIVABLES (2.4%) (4,072,223)
NET ASSETS 100.0% 168,672,520
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 138,576,635 172,744,743
Cash 74,267
Receivable for investment securities sold 5,971,705
Dividends receivable 5,495
178,796,210
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 106,718
Payable for investment securities purchased 9,974,441
Accrued expenses 42,531
10,123,690
--------------------------------------------------------------------------------
NET ASSETS ($) 168,672,520
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 145,226,925
Accumulated investment (loss) (243,000)
Accumulated net realized gain (loss) on investments (10,479,513)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 34,168,108
--------------------------------------------------------------------------------
NET ASSETS ($) 168,672,520
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of
Beneficial Interest authorized) 7,675,626
NET ASSET VALUE, offering and redemption price per share ($) 21.98
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 290,009
Cash dividends (net of $2,229 foreign taxes withheld at source) 23,586
TOTAL INCOME 313,595
EXPENSES:
Investment advisory fee--Note 2(a) 482,033
Professional fees 29,037
Registration fees 25,526
Custodian fees--Note 2(a) 13,556
Prospectus and shareholders' reports 3,145
Trustees' fees and expenses--Note 2(b) 2,681
Shareholder servicing costs 194
Miscellaneous 423
TOTAL EXPENSES 556,595
INVESTMENT (LOSS) (243,000)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (10,476,822)
Net unrealized appreciation (depreciation) on investments 19,430,935
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 8,954,113
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 8,711,113
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (243,000) (30,810)
Net realized gain (loss) on investments (10,476,822) 156,245
Net unrealized appreciation (depreciation)
on investments 19,430,935 14,737,173
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 8,711,113 14,862,608
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
NET REALIZED GAIN ON INVESTMENTS (128,126) --
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 103,135,603 55,130,348
Dividends reinvested 128,126 --
Cost of shares redeemed (8,881,462) (4,285,690)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 94,382,267 50,844,658
TOTAL INCREASE (DECREASE) IN NET ASSETS 102,965,254 65,707,266
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 65,707,266 --
END OF PERIOD 168,672,520 65,707,266
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 4,713,470 3,639,182
Shares issued for dividends reinvested 5,513 --
Shares redeemed (421,849) (260,690)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 4,297,134 3,378,492
(A) FROM AUGUST 31, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31,
1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 19.45 12.50
Investment Operations:
Investment (loss)--net (.04)(b) (.02)(b)
Net realized and unrealized gain (loss) on investments 2.59 6.97
Total from Investment Operations 2.55 6.95
Distributions:
Dividends from net realized gain on investments (.02) --
Net asset value, end of period 21.98 19.45
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TOTAL RETURN (%) 13.10(c) 55.60(c)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .43(c) .36(c)
Ratio of net investment (loss) to average net assets (.19)(c) (.14)(c)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation -- .09(c)
Portfolio Turnover Rate 65.98(c) 20.01(c)
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Net Assets, end of period ($ x 1,000) 168,673 65,707
(A) FROM AUGUST 31, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company operating as a series company currently offering twelve
series, including the Technology Growth Portfolio (the "portfolio"). The
portfolio is only offered to separate accounts established by insurance
companies to fund variable annuity contracts and variable life insurance
policies. The portfolio is a diversified series. The portfolio's investment
objective is to provide long-term capital growth. The Dreyfus Corporation
("Dreyfus") serves as the portfolio's investment adviser. Dreyfus is a direct
subsidiary of Mellon Bank, N.A. ("Mellon"), which is a wholly-owned subsidiary
of Mellon Financial Corporation. Effective March 22, 2000, Dreyfus Service
Corporation ("DSC" ), a wholly-owned subsidiary of Dreyfus, became the
distributor of the portfolio's shares, which are sold to the public without a
sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
price is available. Securities for which there are no such valuations are valued
at fair value as determined in good faith under the direction of the Board of
Trustees. Investments denominated in foreign currencies are translated to U.S.
dollars at the prevailing rates of exchange. Forward currency exchange contracts
are valued at the forward rate.
(b) Foreign currency transactions: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $2,234 during the period ended June 30, 2000, based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(e) Federal income taxes: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Investment Advisory Fee and Other Transactions With Affiliates:
(a) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of .75 of 1% of the value of the
portfolio's average daily net assets and is payable monthly.
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $38 pursuant to the
transfer agency agreement.
The portfolio compensates Mellon under a custody agreement for providing
custodial services for the portfolio. During the period ended June 30, 2000, the
portfolio was charged $13,556 pursuant to the custody agreement.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(b) Each board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receives 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$,160,809,026 and $77,658,502, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$34,168,108, consisting of $37,056,571 gross unrealized appreciation and
$2,888,463 gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Investment Portfolios, Technology Growth
Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 175SA006
Dreyfus
Investment Portfolios,
Founders Growth Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
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2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Portfolio
Dreyfus Investment Portfolios,
Founders Growth Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Founders Growth Portfolio, covering the six-month period from
January 1, 2000 through June 30, 2000. Inside, you'll find valuable information
about how the portfolio was managed during the reporting period, including a
discussion with its portfolio managers, Scott Chapman, CFA and Thomas Arrington,
CFA of Founders Asset Management LLC, the portfolio's sub-investment adviser.
While stock prices were little changed on average over the past six months, the
period was marked by high levels of volatility and dramatic shifts in investor
sentiment. Between January and mid-March, large-cap stocks generally continued
to advance, led by fast-growing technology stocks that, many investors believed,
would benefit most from the "new economy." Subsequently, however, technology
stocks corrected sharply over concerns about rising interest rates and extremely
high valuations. Other sectors of the large-cap stock market also declined,
erasing the gains achieved earlier in the year.
Also, primarily because of the precipitous drop in technology stock prices,
value-oriented stocks generally outperformed growth stocks during the reporting
period, a reversal of the trend established over the past several years. In
addition, small-capitalization stocks generally outperformed large-cap stocks,
particularly in the value-oriented segment of the market. In our view, these
short-term swings in investor sentiment highlight once again the importance of
broad diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, Founders Growth
Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PEFORMANCE
Scott Chapman, CFA and Thomas Arrington, CFA, Portfolio Managers Founders Asset
Management LLC, Sub-Investment Adviser
How did Dreyfus Investment Portfolios, Founders Growth Portfolio perform
relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
Founders Growth Portfolio produced a total return of -3.72%.(1) In comparison,
the portfolio's benchmark, the Standard & Poor's 500/BARRA Growth Index (the
"Index"), produced a total return of 2.63% for the same period.(2)
Midway through the reporting period, growth stocks suffered a sharp decline in
price, although the very largest companies were considered "safe havens" and did
not decline as much. The primary reason for the portfolio's underperformance of
the Index during the reporting period is that the portfolio contained more
aggressive growth companies that sold off sharply during March and April. In
contrast, the Index contained larger, less volatile companies that did not
perform as well when the market was gaining strength, but didn't perform as
poorly when the market was declining.
What is the portfolio's investment approach?
The portfolio invests primarily in large, well-managed growth companies whose
performance is not entirely dependent upon the fortunes of the economy.
Utilizing a bottom-up approach, we focus on individual stock selection rather
than on forecasting stock market trends. We look for high quality, proven
companies with an established track record of sustained earnings growth in
excess of industry averages. The companies we select must have a sustainable
competitive advantage, such as a dominant brand name, a high barrier to entry
from competition and/or large untapped market opportunities. Rather than having
a short-term focus on next quarter' s profits, we look at a company for its
long-term potential and its earning power over the next three to five years.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
At the beginning of the year growth stocks performed very strongly, continuing
the trend from the fourth quarter of 1999. The acquisition by America Online of
TimeWarner symbolized the dominance of the "new economy" over the old, as an
Internet company acquired a well-established publishing firm.
In March, the federal government's bid to break up Microsoft accelerated, and
other technology stocks sold off in sympathy. In addition, investor sentiment
became pessimistic as the Federal Reserve Board took a more aggressive stance
toward raising interest rates in an attempt to slow the economy. By the end of
the first quarter, a shift away from high-priced growth stocks took place, even
though these companies reported strong profits. By June, technology stocks began
to recover when the U.S. economy appeared to be slowing.
Despite the volatility in technology stocks during the reporting period, many of
the portfolio's best-performing stocks came from that sector. For example, JDS
Uniphase, a company that is replacing the world's 100-year-old voice-centric
telecommunications system with a network that is designed to easily accommodate
data traffic, was one of the portfolio's top performers. However, many Internet
companies had a very difficult period, as investors fled "dot.coms" that
reported losses. Even a profitable company like Yahoo, a competitor to America
Online, essentially gave back most of its share price gains from the fourth
quarter of 1999.
Another strong area for the portfolio was health care, partly due to a number of
news events. First, scientists from the National Institute of Health and private
industry announced that they had deciphered the genetic code for human life, a
discovery that should make it possible for companies to create more effective
drugs to treat diseases. Second, the congressional debate over the expansion of
Medicare to cover prescription drugs -- viewed as a negative for the industry --
lost steam as the national election season approached.
Certain stock groups produced mixed results, such as retail. For example,
Kohl's, a 300-unit chain offering midprice no-frills merchandise, produced
strong gains for the portfolio. However, Costco Wholesale's stock fell sharply
after the company announced that earnings growth was likely to fall.
What is the portfolio's current strategy?
The portfolio emphasizes large- and mid-capitalization growth companies that
provide a demonstrated track record of sustainable earnings growth along with
what we believe are considerable competitive advantages.
Although we focus on a five-year horizon when valuing companies, the reality is
that in the short term, investor fears of higher rates often result in volatile
price movements. Yet most of the companies in the portfolio have continued to
beat Wall Street's expectations for earnings. In the final analysis, we believe
that it is profitability that drives stock price performance for the long term,
not short-term market sentiment. Rather than becoming overly concerned by
quarter-to-quarter volatility, our continuing strategy is to invest in companies
which we believe have strong long-term prospects.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD AND POOR'S 500/BARRA GROWTH
INDEX IS A CAPITALIZATION-WEIGHTED INDEX OF ALL THE STOCKS IN THE STANDARD AND
POOR'S 500 COMPOSITE STOCK PRICE INDEX THAT HAVE HIGH PRICE-TO-BOOK RATIOS. THE
S&P 500 INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET
PERFORMANCE.
The Portfolio
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--94.4% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
AUTOMOTIVE--1.0%
<S> <C> <C>
General Motors, Cl. H 2,003 (a) 175,763
BANKING-2.6%
Bank of New York 1,759 81,794
Citigroup 3,842 231,481
Fifth Third Bancorp 2,321 146,803
460,078
BIOTECHNOLOGY--1.8%
Amgen 2,249 (a) 157,992
Genentech 659 (a) 113,348
PE - Celera Genomics Group 450 (a) 42,075
313,415
BUSINESS SERVICES--.4%
Omnicom Group 865 77,039
COMPUTER EQUIPMENT--5.2%
Dell Computer 3,842 (a) 189,459
EMC 5,367 (a) 412,924
Sun Microsystems 3,558 (a) 323,556
925,939
COMPUTER NETWORKING--5.4%
Cisco Systems 10,874 (a) 691,179
Foundry Networks 1,560 172,380
Network Appliance 1,274 (a) 102,557
966,116
COMPUTER SOFTWARE/SERVICES--9.4%
Automatic Data Processing 1,587 85,004
Business Objects, ADS 497 (a) 43,798
Inktomi 712 84,194
Mercury Interactive 2,043 (a) 197,660
Oracle 3,859 (a) 324,397
Redback Networks 866 (a) 154,148
Siebel Systems 1,248 (a) 204,126
VeriSign 1,606 (a) 283,459
Veritas Software 1,625 (a) 183,650
Yahoo! 955 (a) 118,301
1,678,737
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER PRODUCTS--.7%
Colgate-Palmolive 1,550 92,806
Gillette 1,125 39,305
132,111
CONSUMER SERVICES--.6%
DeVRY 4,315 (a) 114,078
DIVERSIFIED--2.5%
Berkshire Hathaway, Cl. B 22 (a) 38,720
Corning 1,484 400,495
439,215
ELECTRONICS--3.3%
General Electric 6,916 (a) 366,548
Jabil Circuit 2,690 (a) 133,491
PE - Biosystems Group 646 (a) 42,555
Sanmina 555 (a) 47,453
590,047
FINANCIAL SERVICES--.9%
Affymetrix 306 (a) 50,528
American Express 1,426 74,330
Schwab (Charles) 1,047 35,205
160,063
FOOD & BEVERAGES--1.0%
Coca-Cola 3,223 185,121
LEISURE & ENTERTAINMENT--1.8%
Disney (Walt) 2,459 95,440
Harley-Davidson 1,161 44,699
Viacom, Cl. B 2,638 (a) 179,879
320,018
MANUFACTURING--2.1%
Danaher 1,256 62,094
Tyco International 6,595 312,438
374,532
MEDICAL SUPPLIES & EQUIPMENT--2.8%
Baxter International 3,400 239,063
Guidant 3,729 (a) 184,586
Medtronic 1,658 82,589
506,238
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OIL & GAS--.3%
Coastal 773 47,056
OIL SERVICES--.9%
Halliburton 3,377 159,352
PHARMACEUTICAL--9.8%
Abbott Laboratories 4,201 187,207
Bristol-Myers Squibb 1,607 93,608
IDEC Pharmaceuticals 492 (a) 57,718
Lilly (Eli) & Co. 2,116 211,336
MedImmune 1,519 (a) 112,406
Merck & Co. 3,017 231,178
Pfizer 15,179 728,568
Schering-Plough 2,578 130,189
1,752,210
PUBLISHING & BROADCASTING--6.6%
AMFM 3,655 (a) 252,195
AT&T - Liberty Media Group, Cl. A 7,218 (a) 175,037
Comcast, Cl. A 5,431 219,956
EchoStar Communications, Cl. A 2,159 71,483
Time Warner 4,950 376,200
USA Networks 3,842 (a) 83,083
1,177,954
RETAIL--5.3%
Costco Wholesale 4,047 (a) 133,551
Home Depot 4,602 229,812
Kohl's 2,621 (a) 145,793
Lowe's Cos. 1,734 71,202
Wal-Mart Stores 4,367 251,648
Walgreen 3,652 117,549
949,555
SEMICONDUCTORS & EQUIPMENT--13.2%
Analog Devices 4,013 (a) 304,988
Applied Micro Circuits 1,308 (a) 129,165
Broadcom, Cl. A 686 (a) 150,191
Intel 4,314 (a) 576,722
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & EQUIPMENT (CONTINUED)
JDS Uniphase 4,006 (a) 480,219
LSI Logic 1,199 (a) 64,896
Maxim Integrated Products 1,390 (a) 94,433
PMC-Sierra 521 (a) 92,575
Texas Instruments 4,819 331,005
Vitesse Semiconductor 2,014 a 148,155
2,372,349
SUPERMARKETS--.5%
Kroger 4,214 (a) 92,971
TELECOMMUNICATION EQUIPMENT--8.9%
Ciena 662 (a) 110,347
Comverse Technology 1,276 (a) 118,668
E-Tek Dynamics 813 (a) 214,480
Ericsson (LM) Telephone, Cl. B, ADR 3,921 78,420
Lucent Technologies 4,050 239,963
Nokia, ADS 8,616 430,262
Qwest Communications International 1,296 (a) 64,395
RF Micro Devices 915 (a) 80,177
Sycamore Networks 501 55,298
Tellabs 2,591 (a) 177,322
Williams Communications Group 987 (a) 32,756
1,602,088
TELECOMMUNICATION SERVICES--7.4%
Juniper Networks 1,828 266,088
Level 3 Communications 1,047 92,136
NEXTEL Communications, Cl. A 1,768 (a) 108,180
Nortel Networks 5,589 381,449
SBC Communications 4,467 193,198
Sprint (PCS Group) 1,753 (a) 104,304
Vodafone AirTouch, ADR 2,138 88,593
VoiceStream Wireless 777 (a) 90,363
1,324,311
TOTAL COMMON STOCKS
(cost $14,083,026) 16,896,356
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM INVESTMENTS--5.6% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY;
Federal Home Loan Mortgage,
6.30%, 7/3/2000 (cost $999,650) 1,000,000 999,650
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $15,082,676) 100.0% 17,896,006
LIABILITIES, LESS CASH AND RECEIVABLES (.0%) (1,573)
NET ASSETS 100.0% 17,894,433
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 15,082,676 17,896,006
Cash 45,015
Dividends receivable 4,233
Prepaid expenses 125
17,945,379
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 36,452
Accrued expenses 14,494
50,946
--------------------------------------------------------------------------------
NET ASSETS ($) 17,894,433
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 16,705,097
Accumulated undistributed investment income--net 515
Accumulated net realized gain (loss) on investments (1,624,509)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 2,813,330
--------------------------------------------------------------------------------
NET ASSETS ($) 17,894,433
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
942,177
NET ASSET VALUE, offering and redemption price per share ($) 18.99
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 48,835
Cash dividends (net of $202 foreign taxes withheld at source) 15,126
TOTAL INCOME 63,961
EXPENSES:
Investment advisory fee--Note 3(a) 47,584
Auditing fees 16,303
Custodian fees--Note 3(a) 9,731
Prospectus and shareholders' reports 3,547
Registration fees 3,120
Legal fees 1,160
Shareholder servicing costs 256
Loan commitment fees--Note 2 20
Miscellaneous 245
TOTAL EXPENSES 81,966
Less--reduction in investment advisory fee due to
undertaking--Note 3(a) (18,520)
NET EXPENSES 63,446
INVESTMENT INCOME--NET 515
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (1,567,512)
Net unrealized appreciation (depreciation) on investments 839,528
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (727,984)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (727,469)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income (loss)--net 515 (4,575)
Net realized gain (loss) on investments (1,567,512) 96,574
Net unrealized appreciation (depreciation)
on investments 839,528 1,692,462
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (727,469) 1,784,461
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net -- (1,120)
Net realized gain on investments (86,561) (323,640)
TOTAL DIVIDENDS (86,561) (324,760)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 15,676,408 4,177,592
Dividends reinvested 86,561 324,760
Cost of shares redeemed (4,539,275) (1,020,907)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 11,223,694 3,481,445
TOTAL INCREASE (DECREASE) IN NET ASSETS 10,409,664 4,941,146
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 7,484,769 2,543,623
END OF PERIOD 17,894,433 7,484,769
Undistributed investement income--net 515 --
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 803,234 252,994
Shares issued for dividends reinvested 4,166 19,754
Shares redeemed (241,951) (56,020)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 565,449 216,728
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended December 31,
---------------------
(Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C>
Net asset value, beginning of period 19.87 15.90 12.50
Investment Operations:
Investment income (loss)--net .00(b,c) (.02)(b) .01
Net realized and unrealized
gain (loss) on investments (.75) 5.79 3.39
Total from Investment Operations (.75) 5.77 3.40
Distributions:
Dividends from investment income--net -- (.01) --
Dividends from net realized gain on investments (.13) (1.79) --
Total Distributions (.13) (1.80) --
Net asset value, end of period 18.99 19.87 15.90
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (3.72)(d) 39.01 27.20(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .50(d) 1.00 .25(d)
Ratio of net investment income (loss)
to average net assets .00(d,e) (.11) .05(d)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .14(d) 1.33 .31(d)
Portfolio Turnover Rate 101.25(d) 115.08 75.65(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 17,894 7,485 2,544
(A) FROM SEPTEMBER 30, 1998 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(D) NOT ANNUALIZED.
(E) AMOUNT REPRESENTS LESS THAN .01%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company operating as a series company currently offering twelve
series, including the Founders Growth Portfolio (the "portfolio"). The portfolio
is only offered to separate accounts established by insurance companies to fund
variable annuity contracts and variable life insurance policies. The portfolio
is a diversified series. The portfolio's investment objective is to provide
long-term capital growth. The Dreyfus Corporation ("Dreyfus") serves as the
portfolio's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank,
N.A. ("Mellon"), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Founders Asset Management LLC ("Founders") serves as the
portfolio's sub-investment adviser. Founders is a 90%-owned subsidiary of
Mellon. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of Dreyfus, became the distributor of the portfolio's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
bid and asked prices, except for open short positions, where the asked price is
used for valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Forward currency exchange contracts are valued
at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $1,356 during the period ended June 30, 2000 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(E) FEDERAL INCOME TAXES: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The portfolio participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the portfolio has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to the portfolio at rates based on
prevailing market rates in effect at the time of borrowings. During the period
ended June 30, 2000, the portfolio did not borrow under the Facility.
NOTE 3--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of .75 of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31, 2000, to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate annual expenses,
exclusive of taxes, brokerage
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
fees, interest on borrowings, commitment fees and extraordinary expenses, exceed
an annual rate of 1% of the value of the portfolio's average daily net assets.
The reduction in investment advisory fee, pursuant to the undertaking, amounted
to $18,520 during the period ended June 30, 2000.
Pursuant to a Sub-Investment Advisory Agreement with Founders, the
sub-investment advisory fee is payable monthly by Dreyfus, and is based upon the
value of the portfolio's average daily net assets, computed at the following
annual rates:
AVERAGE NET ASSETS
0 to $100 million. . . . . . . . . . . . . . . . . . .25 of 1%
In excess of $100 million to $1 billion. . . . . . . .20 of 1%
In excess of $1 billion to $1.5 billion. . . . . . . .16 of 1%
In excess of $1.5 billion. . . . . . . . . . . . . . .10 of 1%
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $15 pursuant to the
transfer agency agreement.
The portfolio compensates Mellon under a custody agreement for providing
custodial services for the portfolio. During the period ended June 30, 2000, the
portfolio was charged $9,731 pursuant to the custody agreement.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund
an annual fee of $1,000 and an attendance fee of $250 per meeting. The Chairman
of the Board received an additional 25% of such compensation. Subject to the
fund's Emeritus Program Guidelines, Emeritus Board members, if any, receive 50%
of the fund's annual retainer fee and per meeting fee paid at the time the Board
member achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$21,838,330 and $11,693,448, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$2,813,330, consisting of $3,017,837 gross unrealized appreciation and $204,507
gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Portfolio
NOTES
For More Information
Dreyfus Investment Portfolios, Founders Growth Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Founders Asset Management LLC
Founders Financial Center
2930 East Third Avenue
Denver, CO 80206
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 176SA006
Dreyfus
Investment Portfolios,
Founders International Equity Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios,
Founders International Equity Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Founders International Equity Portfolio, covering the six-month
period from January 1, 2000 through June 30, 2000. Inside, you'll find valuable
information about how the portfolio was managed during the reporting period,
including a discussion with the portfolio manager, Douglas A. Loeffler, CFA, of
Founders Asset Management LLC, the portfolio's sub-investment adviser.
When the reporting period began, it had become apparent that global economic
growth was substantially stronger than many analysts had expected. In fact, most
global markets had already rebounded sharply from 1998's currency and credit
crises in emerging market countries. The rally continued into the first quarter
of 2000, before peaking in early March.
In April, many developed and emerging market countries around the world
experienced heightened levels of volatility when expensively priced technology
stocks began to decline sharply in the wake of evidence that inflationary
pressures were building. This correction, combined with a strong U.S. dollar
relative to many foreign currencies, erased much of the reporting period's early
gains.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, Founders
International Equity Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Douglas A. Loeffler, CFA, Portfolio Manager Founders Asset Management LLC,
Sub-Investment Adviser
How did Dreyfus Investment Portfolios, Founders International Equity Portfolio
perform relative to its benchmark?
For the six-month period ended June 30, 2000, the portfolio produced a total
return of -2.83%.(1) This compares with a -2.95% return for the portfolio's
benchmark, the Morgan Stanley Capital International (MSCI) World ex U.S. Index,
for the same period.(2)
We attribute the portfolio's modest outperformance to successful stock selection
in an environment that, for much of the reporting period, did not favor the
growth investment style.
What is the portfolio's investment approach?
The portfolio focuses on individual stock selection. We do not attempt to
predict interest rates or market movements nor do we have country allocation
models or targets. Rather, we choose investments on a company-by-company basis,
searching to find what we believe to be the best-managed, best-positioned
companies, wherever they may be.
Starting with roughly 1,000 of the largest companies outside the United States,
we perform rigorous stock-by-stock analyses. Our goal is to identify companies
that we believe have achieved and can sustain earnings or revenue growth through
a strong brand name, growing market share, high barriers to entry or untapped
market opportunities. In our view, these factors are the marks of companies
whose growth, in both revenues and earnings, should exceed that of global
industry peers as well as that of their local markets.
The portfolio will typically hold 60-80 stocks, broadly invested across
countries and industries, representing what we believe to be the best growth
ideas in the world. We generally sell a stock when it reaches its target price
or when we determine that circumstances have changed and it will most likely not
reach the previously set target sale price.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
When the reporting period began, the portfolio benefited from strong global
demand for growth stocks. After a brief January pause, the year-end 1999 rally
continued into the first quarter of 2000. The global advance was driven by the
telecommunications, media and technology industries, on which the portfolio
placed a relatively heavy emphasis.
From mid-March through the end of May, however, global stock markets were marked
by rapid swings and shifts in investor sentiment. Investors grew concerned over
stock valuations that were extraordinarily high when compared to historical
norms. Overseas markets, and especially the emerging markets, were highly
vulnerable to rising interest rates. While demand for stocks remained high,
supply grew rapidly as firms rushed new shares to market in order to take
advantage of high prices. However, investors paused to rethink valuations when
central banks raised interest rates and markets grew glutted with new issues. As
a result, stock prices turned downward, negatively affecting portfolio
performance.
More specifically, Japan was weak through the entire reporting period; both the
market and economy continued to disappoint investors. However, our emphasis on
individual stock selection helped the portfolio's performance. European markets
moved slightly ahead in local currency terms, benefiting the portfolio, as
countries continued to move away from a centralized economic model and towards a
competitive, market-driven structure. However, weakness in the euro and British
pound relative to the U.S. dollar negatively affected the performance of the
portfolio's European investments for U.S. investors.
What is the portfolio's current strategy?
We have maintained our focus during a challenging period for global growth
stocks, continuing our quest to uncover what we believe to be the strongest
growth opportunities worldwide.
Since mid-March, we have worked to reduce the overall volatility of the
portfolio. In particular, we have focused on the price we pay for
stocks, looking for a clearer path from concept to profitability and reducing
our investment in stocks with no current earnings.
Accordingly, Europe is currently our largest area of regional exposure. We have
reduced our investments in European financial firms, concentrating instead on
companies positioned to take advantage of the ongoing convergence of the
telecommunications and entertainment industries. We de-emphasized investments in
the United Kingdom, avoiding exposure to its weak financial services industry.
Japan continues to be the portfolio's largest single-country weighting. In our
Japanese investments, we have focused on selecting well-run companies that we
believe are positioned for growth, including telecommunications companies and
high-end consumer electronics manufacturers. We are also seeking to take
advantage of selected opportunities in emerging market countries. These include
Latin American stocks tied closely to U.S. market performance, as well as Asian
manufacturers of semiconductors and telecommunications equipment. On the other
hand, we have sharply reduced our holdings of commodity telecommunication
providers, particularly in markets with many new entrants. In the media industry
group, we are focusing primarily on company valuations and potential
profitability.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURN WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC.-- REFLECTS REINVESTMENT OF NET DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY CAPITAL INTERNATIONAL
(MSCI) WORLD EX U.S. INDEX IS AN UNMANAGED INDEX OF GLOBAL STOCK MARKET
PERFORMANCE, EXCLUDING THE U.S., CONSISTING SOLELY OF EQUITY SECURITIES.
The Portfolio
<TABLE>
<CAPTION>
June 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
COMMON STOCKS--88.3% Shares Value ($)
-------------------------------------------------------------------------------------------
BRAZIL--1.3%
<S> <C> <C>
Aracruz Celulose, ADR 6,275 121,186
CANADA--1.0%
AT&T Canada, Cl. B, ADR 2,775 (a) 92,095
DENMARK--1.4%
Novo Nordisk, Cl. B 800 136,000
FINLAND--6.1%
HPY Holding 4,150 189,997
Nokia, ADS 3,525 176,030
Perlos 6,075 191,792
Tietoenator 925 30,835
588,654
FRANCE--10.5%
Accor 2,975 121,816
Alcatel 3,675 240,808
Altran Technologies 550 107,593
Bouygues 100 66,766
Dassault Systemes 1,275 118,812
Total Fina Elf 1,150 176,157
Vivendi 1,950 171,949
1,003,901
HONG KONG--1.8%
China Mobile (Hong Kong) 20,000 (a) 176,382
ISRAEL--2.0%
Check Point Software Technologies, ADR 525 (a) 111,169
Partner Communications, ADR 8,900 (a) 84,550
195,719
ITALY--5.1%
Alleanza Assicurazioni 15,425 203,178
Saipem 25,800 152,816
San Paolo-IMI 7,425 131,512
487,506
JAPAN--19.1%
Ajinomoto 10,000 128,484
Don Quijote 746 130,383
MURATA MANUFACTURING 730 104,965
Mitsubishi Electric 22,000 238,602
NEC 8,000 251,677
COMMON STOCKS (CONTINUED) Shares Value ($)
-------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
NIPPON TELEGRAPH & TELEPHONE 11 146,528
Nippon Television Network 150 97,780
PIONEER 7,000 273,122
TOKYO GAS 52,000 146,396
TOYODA GOSEI 2,000 127,161
Taiyo Yuden 2,000 125,461
Takeda Chemical Industries 1,000 65,753
1,836,312
LUXEMBOURG--1.3%
Societe Europeenne des Satellites 750 125,902
MEXICO--3.0%
Cemex, ADR 5,200 121,550
Telefonos de Mexico, ADR 2,975 169,947
291,497
NETHERLANDS--8.7%
ASM Lithography, ADR 3,485 (a) 153,776
Heineken 2,175 132,250
Koninklijke (Royal) Philips Electronics, ADR 6,550 311,125
STMicroelectronics 1,350 84,984
TNT Post 5,650 152,238
834,373
SOUTH KOREA--2.9%
Samsung Electronics, GDR 1,400 (b) 275,100
SPAIN--3.0%
Altadis 10,450 160,372
Banco Santander Central Hispano 11,525 121,468
Grupo Prisa 500 (a) 11,589
Telefonica, ADR 15 (a) 961
294,390
SWEDEN--6.3%
Electrolux , Cl. B 6,925 107,541
ForeningsSparbanken 9,800 143,825
Nordic Baltic 20,550 155,473
Telefonaktiebolaget LM Ericsson, Cl. B, ADR 9,950 199,000
605,839
SWITZERLAND--2.6%
Swatch 110 139,689
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
-------------------------------------------------------------------------------------------
SWITZERLAND (CONTINUED)
Synthes-Stratec 240 (b) 109,332
249,021
UNITED KINGDOM--9.6%
BP Amoco, ADS 2,450 138,578
Cable & Wireless 11,100 188,388
Energis 1,875 (a) 70,470
Marconi 9,975 130,110
Nycomed Amersham 14,575 145,015
Scoot.com 24,150 (a) 56,408
Vodafone AirTouch 47,885 193,914
922,883
UNITED STATES--2.6%
Global TeleSystems 5,225 (a) 63,027
NTL 3,150 (a) 188,606
251,633
TOTAL COMMON STOCKS
(cost $7,695,207) 8,488,393
---------------------------------------------------------------------------------------------
PREFERRED STOCKS--.8%
---------------------------------------------------------------------------------------------
GERMANY;
Marschollek, Lautenschlaeger
(cost $82,341) 165 82,466
--------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--8.3% Amount ($) Value ($)
---------------------------------------------------------------------------------------------
COMMERCIAL PAPER;
Federal Home Loan Banks, 6.48% 7/3/2000
(cost $799,712) 800,000 799,712
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $8,577,260) 97.4% 9,370,571
CASH AND RECEIVABLES (NET) 2.6% 245,307
NET ASSETS 100.0% 9,615,878
(A) NON-INCOME PRODUCING.
(B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF SECURITIES ACT OF
1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT JUNE 30, 2000, THESE SECURITIES
AMOUNTED TO$384,432 OR APPROXIAMATELY 4.0% OF NET ASSETS.
SEE NOTES TO STATEMENT OF INVESTMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 8,577,260 9,370,571
Cash 325,881
Dividends receivable 4,741
Prepaid expenses 522
9,701,715
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 4,343
Payable for investment securities purchased 46,055
Payable for shares of Beneficial Interest redeemed 14,124
Accrued expenses 21,315
85,837
--------------------------------------------------------------------------------
NET ASSETS ($) 9,615,878
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 8,556,721
Accumulated undistributed investment income--net 11,786
Accumulated net realized gain (loss) on investments
and foreign currency transactions 253,995
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 793,376
--------------------------------------------------------------------------------
NET ASSETS ($) 9,615,878
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial
Interest authorized) 480,687
NET ASSET VALUE, offering and redemption price per share ($) 20.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $6,796 foreign taxes withheld at source) 40,716
Interest 21,231
TOTAL INCOME 61,947
EXPENSES:
Investment advisory fee--Note 3(a) 33,440
Custodian fees 32,449
Auditing fees 10,503
Prospectus and shareholders' reports 5,219
Registration fees 1,476
Legal fees 1,185
Trustees' fees and expenses--Note 3(b) 669
Shareholder servicing costs 250
Loan commitment fees--Note 2 11
Miscellaneous 4,308
TOTAL EXPENSES 89,510
Less--expense reimbursement from The Dreyfus Corporation
due to undertaking--Note 3(a) (39,349)
NET EXPENSES 50,161
INVESTMENT INCOME-NET 11,786
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments and foreign currency
transactions 263,001
Net unrealized appreciation (depreciation) on investments and
foreign currency transactions (514,280)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (251,279)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (239,493)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income (loss)-net 11,786 (2,916)
Net realized gain (loss) on investments 263,001 645,007
Net unrealized appreciation (depreciation)
on investments (514,280) 980,443
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (239,493) 1,622,534
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
NET REALIZED GAIN ON INVESTMENTS (343,289) (282,839)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 5,696,163 1,317,844
Dividends reinvested 343,289 282,839
Cost of shares redeemed (448,557) (629,761)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 5,590,895 970,922
TOTAL INCREASE (DECREASE) IN NET ASSETS 5,008,113 2,310,617
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 4,607,765 2,297,148
END OF PERIOD 9,615,878 4,607,765
Undistributed investment income--net 11,786 --
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 272,869 67,505
Shares issued for dividends reinvested 16,201 13,155
Shares redeemed (21,249) (27,794)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 267,821 52,866
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended December 31,
------------------------
(Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C>
Net asset value, beginning of period 21.65 14.36 12.50
Investment Operations:
Investment income (loss)-net .04(b) (.02)(b) (.01)
Net realized and unrealized
gain (loss) on investments (.59) 8.73 1.87
Total from Investment Operations (.55) 8.71 1.86
Distributions:
Dividends from net realized gain on investments (1.10) (1.42) --
Net asset value, end of period 20.00 21.65 14.36
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (2.83)(c) 60.69 14.88(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .75(c) 1.50 .38(c)
Ratio of net investment income (loss)
to average net assets .18(c) (.11) (.08)(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .59(c) 2.27 .81(c)
Portfolio Turnover Rate 108.14(c) 190.80 29.25(c)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 9,616 4,608 2,297
(A) FROM SEPTEMBER 30, 1998 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company operating as a series company currently offering twelve
portfolios, including the Founders International Equity Portfolio (the
"portfolio"). The portfolio is only offered to separate accounts established by
insurance companies to fund variable annuity contracts and variable life
insurance policies. The portfolio is a diversified series. The portfolio's
investment objective is to provide long-term capital growth. The Dreyfus
Corporation ("Dreyfus") serves as the portfolio's investment adviser. Dreyfus is
a direct subsidiary of Mellon Bank, N.A. ("Mellon"), which is a wholly-owned
subsidiary of Mellon Financial Corporation. Founders Asset Management LLC
("Founders") serves as the portfolio's sub-investment adviser. Founders is a 90%
-owned subsidiary of Mellon. Effective March 22, 2000, Dreyfus Service
Corporation ("DSC" ), a wholly-owned subsidiary of the Dreyfus, became the
distributor of the portfolio's shares, which are sold to the public without a
sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
As of June 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held 179,367 shares of the portfolio.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Forward currency exchange contracts are valued
at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $2,765 during the period ended June 30, 2000, based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(E) FEDERAL INCOME TAXES: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The portfolio participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the portfolio has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to the portfolio at rates based on
prevailing market rates in effect at the time of borrowings. During the period
ended June 30, 2000, the portfolio did not borrow under the Facility.
NOTE 3--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions with Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31,
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
2000, to reduce the investment advisory fee and reimburse such excess expenses
paid by the portfolio, to the extent that the portfolio's aggregate annual
expenses, exclusive of taxes, brokerage fees, interest on borrowings and
extraordinary expenses, exceed an annual rate of 1.50% of the value of the
portfolio's average daily net assets. The expense reimbursement, pursuant to the
undertaking, amounted to $39,349 during the period ended June 30, 2000.
Pursuant to a Sub-Investment Advisory Agreement with Founders, the
sub-investment advisory fee is payable monthly by Dreyfus, and is based upon the
value of the portfolio's average daily net assets, computed at the following
annual rates:
AVERAGE NET ASSETS
0 to $100 million. . . . . . . . . . . . . . . . . .35 of 1%
In excess of $100 million to $1 billion. . . . . . .30 of 1%
In excess of $1 billion to $1.5 billion. . . . . . .26 of 1%
In excess of $1.5 billion. . . . . . . . . . . . . .20 of 1%
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $15 pursuant to the
transfer agency agreement.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$10,524,287 and $6,652,202, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$793,311, consisting of $1,014,536 gross unrealized appreciation and $221,225
gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Portfolio
For More Information
Dreyfus
Investment Portfolios,
Founders International Equity Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Founders Asset Management LLC
Founders Financial Center
2930 East Third Avenue
Denver, CO 80206
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 177SA006
Dreyfus Investment Portfolios, Founders Passport Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
17 Financial Highlights
18 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios,
Founders Passport Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Founders Passport Portfolio, covering the six-month period from
January 1, 2000 through June 30, 2000. Inside, you'll find valuable information
about how the portfolio was managed during the reporting period, including a
discussion with its portfolio manager, Tracy Stouffer of Founders Asset
Management LLC, the portfolio's sub-investment adviser.
When the reporting period began, it had become apparent that global economic
growth was substantially stronger than many analysts had expected. In fact, most
global markets had already rebounded sharply from 1998's currency and credit
crises in emerging market countries. The rally continued into the first quarter
of 2000, before peaking in early March.
In April, the markets of many developed and emerging market countries around the
world experienced heightened levels of volatility when expensively priced
technology stocks began to decline sharply in the wake of evidence that
inflationary pressures were building. This correction, combined with a strong
U.S. dollar relative to many foreign currencies, erased much of the reporting
period's early gains.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, Founders Passport
Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Tracy Stouffer, Portfolio Manager Founders Asset Management LLC, Sub-Investment
Adviser
How did Dreyfus Investment Portfolios, Founders Passport Portfolio perform
relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
Founders Passport Portfolio produced a total return of -5.26%.(1) In comparison,
the portfolio's benchmarks, the Morgan Stanley Capital International World ex
U.S. Index(2) and the Morgan Stanley Capital International World ex U.S. Small
Cap Index,(3) produced total returns of -2.95% and 5.00%, respectively, for the
same period.
We attribute the portfolio's underperformance of the indices during the
reporting period to the volatility in international "new economy" stocks such as
technology, telecommunications and media, which performed in line with similar
companies in the United States. Between March and May of 2000, stock prices of
these companies declined sharply due to concerns regarding their very high
levels as well as fears of inflation and a rising interest-rate environment.
What is the portfolio's investment approach?
The portfolio invests primarily in foreign companies with annual revenues or
market capitalizations of $1 billion or less that have demonstrated strong
earnings growth as well as dominance in their market niches. Although our recent
focus has been on technology and telecommunications, the portfolio is broadly
diversified and currently holds more than 100 stocks in many industries.
Because of this broad mandate, we believe it is very important for us to meet
with corporate management teams to assess their business strategies. We also
believe it is important to travel to the countries in which they are located to
assess the local business environment. When it comes to international small-cap
stocks, it is especially important to learn as much as we can because there is a
limited amount of Wall Street research available on many of these companies.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
The reporting period began on a positive note. The much anticipated Y2K concerns
never materialized and international fund managers who had a high level of cash
reserves were able to put the money to work early in the year. In this
environment, small-cap stocks flourished, as investors were willing to assume
additional risk in return for higher return potential.
However, in early March the U.S. stock market turned volatile when it appeared
that the domestic economy was growing too fast to keep inflation at bay. The
Federal Reserve Board (the "Fed" ) responded by raising short-term interest
rates. A "flight to size" ensued during which the hardest hit stocks were the
small caps. Often, we found it difficult to sell these shares on the open
market, and this lack of liquidity caused share prices to fall sharply.
Not all stocks in the portfolio fell in value during the period. The companies
that tended to perform well posted stronger than expected earnings during the
period. One example was Logitech International, a Swiss company that makes
computer accessories such as PC video cameras and multimedia speakers. Indeed, a
number of Swiss companies performed well, not just because of strong profits,
but because there is a new small-cap stock index in Switzerland that makes it
easier for Swiss investors to participate in the small-cap marketplace.
The Chinese stock market also produced strong returns as that nation experienced
an economic recovery. The portfolio's economically cyclical holdings generally
performed well in an improving business environment. One example: Huaneng Power
International, a leading electric utility, is benefiting from increasing
economic activity in China. Another example is China Eastern Airlines Ltd.,
which can benefit from rising per capita income throughout China as trade opens
up with the West.
Other strong stocks in the portfolio in the reporting period were profitable
companies in a variety of industries and locations, such as a construction
company in France, a doll manufacturer in Germany and a semiconductor designer
in Ireland.
What is the portfolio's current strategy?
Our current strategy is to continue to focus on finding small, fast-growing
companies throughout the world regardless of industry or location. Currently, we
like the valuation in Asia and the larger markets of Europe.
Finally, we continue to actively pursue stocks of companies in new technologies.
Although the first half of 2000 was a volatile period for these stocks, we
believe that in general, new economy companies offer great opportunity for
growth.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURN WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF NET DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY CAPITAL INTERNATIONAL
(MSCI) WORLD EX U.S. INDEX IS AN UNMANAGED INDEX OF GLOBAL STOCK MARKET
PERFORMANCE, EXCLUDING THE U.S., CONSISTING SOLELY OF EQUITY SECURITIES.
(3) SOURCE: MORGAN STANLEY CAPITAL INTERNATIONAL -- THE MORGAN STANLEY CAPITAL
INTERNATIONAL (MSCI) WORLD EX U.S. SMALL CAP INDEX IS A WEIGHTED AVERAGE OF THE
PERFORMANCE OF SECURITIES IN 21 COUNTRIES THAT INCLUDES COMPANIES WITH MARKET
CAPITALIZATIONS BETWEEN U.S. $200 MILLION AND $800 MILLION.
The Portfolio
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
JUNE 30, 2000 (Unaudited)
COMMON STOCKS--91.2% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA--1.6%
<S> <C> <C>
Aristocrat Leisure 33,080 111,674
Challenger International 3,425 7,477
ERG 15,485 120,002
Sausage Software 59,700 (a) 90,176
Securenet 16,500 (a) 90,897
420,226
AUSTRIA--.3%
Austria Technologie & Systemtechnik 875 (a) 66,766
BELGIUM--.1%
G.I.B. 850 31,205
CANADA--5.7%
Agrium 17,625 151,180
Canadian Hunter Exploration 8,975 (a) 190,642
Crestar Energy 4,925 (a) 75,009
Ensign Resource Service 4,475 147,494
GSI Lumonics 2,825 (a) 98,558
GT Group Telecom 2,750 (a) 43,369
Genesis Exploration 10,525 (a) 78,195
Hemosol 6,000 (a) 58,963
NHC Communications 3,181 (a) 24,815
Precision Drilling 5,700 (a) 220,208
Rio Alto Exploration 7,150 (a) 130,869
Sierra Wireless 1,825 (a) 98,609
WestJet Airlines 12,150 (a) 184,638
1,502,549
CHINA--4.1%
Angang New Steel, Cl. H 1,810,000 183,424
Beijing Yanuha Petrochemical, Cl. H 668,000 77,977
China Eastern Airlines, Cl. H 1,080,000 (a) 137,154
China Shipping Development, Cl. H 648,000 (a) 118,036
China Southern Airlines, Cl. H 316,000 (a) 75,397
Huaneng Power International, Cl. H 412,000 134,768
Shandong International Power Development, Cl. H 74,000 10,916
Shanghai Petrochemical, Cl. H 1,480,000 201,242
Yanzhou Coal Mining, Cl. H 676,000 139,612
1,078,526
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
DENMARK--.2%
DSV, De Sammensluttede Vognmaend 2,775 62,073
FINLAND--1.9%
Comptel 3,375 67,923
F-Secure 7,350 (a) 84,896
Hartwall 4,225 84,626
JOT Automation 10,500 70,004
Menire 4,000 (a) 19,076
Tecnomen 4,500 (a) 38,629
Teleste 5,675 (a) 138,027
503,181
FRANCE--7.4%
A Novo 520 127,962
Carbone Lorraine 1,875 74,039
Cerep 3,225 (a) 221,472
Custom Silicon Configuration Services 1,000 (a) 15,394
Elior 9,025 (a) 113,884
Faurecia 3,125 123,249
Neopost 4,825 (a) 156,241
Net2S 500 (a) 10,015
Netgem 800 (a) 30,476
Penauille Polyservices 275 132,066
Pierre & Vacances 1,650 (a) 98,360
Pinguely-Haulotte 11,200 232,880
Remy Cointreau 3,225 (a) 104,738
Riber 7,250 (a) 148,673
SR Teleperformance 1,000 38,057
Silicon-On-Insulator Technologies 25 (a) 5,842
Societe Manutan 150 13,055
Sommer Allibert 3,525 109,270
Vallourec 400 16,787
Wavecom 625 (a) 75,708
Zodiac 500 101,627
1,949,795
GERMANY--7.5%
ACG 250 (a) 53,651
Adcon Telemetry 5,225 (a) 82,229
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
GERMANY (CONTINUED)
Amatech 2,000 (a) 69,627
Articon Information Systems 672 (a) 46,149
COR Insurance Technologies 10,475 (a) 178,840
Comroad 240 (a) 36,855
DIS Deutscher Industrie Service 800 96,906
GPC Biotech 2,300 (a) 118,462
Grenkeleasing 2,200 (a) 71,344
Kontron Embedded Computers 1,450 (a) 130,003
Ruecker 5,075 (a) 77,933
SAI Automotive 300 2,618
SZ Testsysteme 5,575 (a) 132,936
Techem 6,225 (a) 148,435
Tecis 700 66,733
Thiel Logistik 3,375 (a) 316,113
U.C.A. Unternehmer Consult 225 (a) 11,116
Wedeco Water Technology 3,375 (a) 130,694
Zapf Creaton 3,365 210,225
1,980,869
GREECE--.3%
M.J. Maillis 5,690 71,332
Metrolife 200 (a) 1,871
73,203
HONG KONG--3.2%
Brilliance China Automotive 2,680 46,565
China Everbright 54,000 42,255
China Pharmaceutical Enterprise and Investment 460,000 56,057
China Resources Beijing Land 674,000 89,917
Cosco Pacific 240,000 189,338
Giordano International 64,000 97,286
HKCB Bank 148,000 (a) 42,788
Hong Kong Exchanges & Clearing 58,000 (a) 78,493
Quality Healthcare Asia 109,000 (a) 32,159
Shenzhen International 1,485,000 (a) 106,676
VTech 12,000 45,894
Yuxing Infotech 20,000 (a) 10,968
838,396
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INDONESIA--.1%
Gulf Indonesia Resources 2,500 20,000
IRELAND--1.8%
ITG 11,288 (a) 117,355
Parthus Technologies 72,875 210,006
Trinity Biotech 49,500 (a) 145,406
472,767
ISRAEL--6.5%
BATM Advanced Communications 2,725 237,648
BreezeCom 6,600 (a) 287,100
Card-Guard Scientific Survival 3,525 (a) 167,271
Commtouch Software 5,400 (a) 175,500
GEO Interactive Media 6,250 (a) 119,914
M-Systems Flash Disk Pioneers 2,900 (a) 225,837
Oridion Systems 1,575 (a) 41,613
RADVision 7,975 (a) 222,802
RT-SET 7,450 (a) 115,825
TTI Team Telecom International 1,800 (a) 64,388
Valor Computerized Systems 6,470 (a) 56,774
1,714,672
ITALY--.8%
Buzzi Unicem 4,250 (a) 38,327
ERG 34,375 103,246
Ericsson 1,350 78,584
220,157
JAPAN--12.2%
ADERANS 2,500 115,966
AMADA 23,000 195,560
ANDO ELECTRONIC 4,000 (a) 92,584
Aica Kogyo 3,000 23,750
Central Glass 1,000 5,319
FUJI OIL 10,000 89,277
HISAMITSU PHARMACEUTICAL 6,000 (a) 92,452
HUNET 22,000 169,183
IDEC IZUMI 10,500 148,299
Ichiyoshi Securities 4,000 33,670
JOINT 3,500 119,367
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
JAPAN (CONTINUED)
KATOKICHI 4,000 101,464
KINSEKI 9,000 152,622
KOA 4,000 124,327
KURODA ELECTRIC 60 1,984
MICRONICS JAPAN 2,000 46,859
MORITEX 2,000 182,333
NIPPON THOMPSON 18,000 273,784
RORZE 1,000 49,220
RYOYO ELECTRO 9,000 179,879
SHIMACHU 9,900 210,439
Sumisho Lease 1,000 15,021
TOHOKU PIONEER 3,000 195,560
TOKO 8,000 60,539
TOSHIBA TUNGALOY 31,000 216,458
TSUBAKI NAKASHIMA 12,500 184,223
Tokyo Individualized Educational Institute 2,000 (a) 109,589
XEBIO 1,600 37,638
3,227,366
NETHERLANDS--3.3%
AOT 12,000 68,674
ASM International 700 (a) 18,550
BE Semiconductor Industries 5,600 (a) 87,330
Beter Bed 2,125 63,642
IFCO Systems 3,725 (a) 99,126
IHC Caland 5,325 259,028
PinkRoccade 1,225 (a) 63,678
Unique International 800 19,152
Van der Moolen 3,475 194,890
874,070
NEW ZEALAND--.0%
Advantage 6,125 (a) 7,959
NORWAY--3.9%
Bergesen 6,250 128,059
c.Rel 27,625 (a) 35,376
Frontline 17,825 (a) 217,889
ProSafe 9,075 (a) 134,174
Smedvig, Cl. B 15,500 252,625
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NORWAY (CONTINUED)
TGS Nopec Geophysical 20,325 (a) 268,561
1,036,684
SOUTH KOREA--.9%
Daeduck Electronics 3,200 32,430
Daum Communications 900 (a) 85,559
LG Home Shopping 330 31,371
Shin Sung ENG 15,700 84,320
233,680
SPAIN--.6%
Abengoa 1,250 33,562
Cortefiel 3,625 78,555
Prosegur 3,750 43,815
155,932
SWEDEN--2.0%
Biacore International 3,450 (a) 147,580
Glocalnet 525 (a) 753
Karo Bio 3,850 (a) 143,667
Kipling 100 (a) 1,411
Observer 6,305 88,229
Perbio Science 15,000 (a) 117,750
SwitchCore 2,890 (a) 30,249
529,639
SWITZERLAND--7.7%
ESEC 90 (a) 221,528
Kudelski 13 (a) 163,336
Logitech International 350 (a) 248,806
Phonak 22 63,311
Rieter 800 269,410
Sarna Kunststoff 100 122,459
Saurer 500 (a) 311,658
Straumann 150 226,481
Swisslog 200 97,967
Tecan 157 150,476
Think Tools 300 (a) 173,586
2,049,018
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM--19.1%
AIT 6,625 122,964
Abacus Polar 2,075 14,516
Actinic 52,450 (a) 78,755
Advanced Power Components 6,975 43,374
Alphameric 7,800 40,105
Anite 39,650 96,219
Arena Leisure 20,225 (a) 57,056
Axis-Shield 7,500 (a) 81,333
Bodycote International 28,100 92,697
Cedar 3,975 (a) 40,695
Chloride 90,975 265,196
Debenhams 56,600 185,855
Dialog Semiconductor 2,050 (a) 103,630
Easynet 4,357 (a) 65,207
Enodis 34,625 170,067
Eyretel 106,850 (a) 340,325
Fibernet 3,275 (a) 91,928
Future Integrated Telephony 2,837 (a) 10,331
HIT Entertainment 43,925 289,802
ITE 22,825 24,925
Imagination Technologies 28,725 (a) 124,166
Incepta 102,950 206,110
Intermediate Capital 18,100 193,539
International Quantum Epitaxy 2,100 (a) 172,200
Lex Service 10,975 55,514
Man (E D & F) 36,000 280,923
Mayflower 14,775 33,390
Mentmore Abbey 15,400 47,649
Mitie 11,975 66,111
Nestor Healthcare 22,925 164,116
Orchestream 49,250 (a) 233,803
Oxford Asymmetry International 16,500 (a) 124,377
Oxford GlycoSciences 5,688 (a) 163,141
Pace Micro Technology 16,900 244,019
QXL.com 64,600 (a) 97,979
Redstone Telecom 14,400 (a) 57,565
Robotic Technology Systems 10,600 (a) 108,520
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
Scipher 4,850 (a) 38,876
Sportsworld Media 149 (a) 1,209
Staffware 650 20,457
Superscape 23,825 (a) 74,077
Ted Baker 12,575 101,275
Telemetrix 23,750 117,611
Volex 3,175 72,155
Xenova 23,875 (a) 29,512
5,043,274
TOTAL COMMON STOCKS
(cost $22,415,301) 24,092,007
------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--.5%
--------------------------------------------------------------------------------
GERMANY;
Hugo Boss
(cost $121,646) 800 141,162
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--6.8% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER;
Federal Home Loan Banks, 6.48%, 7/3/2000
(cost $1,799,352) 1,800,000 1,799,352
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $24,336,299) 98.5% 26,032,521
CASH AND RECEIVABLES (NET) 1.5% 394,011
NET ASSETS 100.0% 26,426,532
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 24,336,299 26,032,521
Cash 513,825
Receivable for investment securities sold 1,614,470
Dividends receivable 28,058
Prepaid expenses 903
Due from The Dreyfus Corporation and affliliates 33,220
28,222,997
--------------------------------------------------------------------------------
LIABILITIES ($):
Payable for investment securities purchased 1,607,056
Payable for shares of Beneficial Interest redeemed 125
Accrued expenses 189,284
1,796,465
--------------------------------------------------------------------------------
NET ASSETS ($) 26,426,532
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 28,391,295
Accumulated investment (loss) (53,925)
Accumulated net realized gain (loss) on investments
and foreign currency transactions (3,607,353)
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 1,696,515
--------------------------------------------------------------------------------
NET ASSETS ($) 26,426,532
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial
Interest authorized) 1,219,304
NET ASSET VALUE, offering and redemption price per share ($) 21.67
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $13,662 foreign taxes withheld at source) 103,560
Interest 46,692
TOTAL INCOME 150,252
EXPENSES:
Investment advisory fee--Note 3(a) 136,118
Custodian fees 306,519
Professional fees 10,105
Prospectus and shareholders' reports 6,117
Registration fees 4,971
Trustees' fees and expenses--Note 3(b) 678
Shareholder servicing costs 213
Loan commitment fees--Note 2 35
Miscellaneous 14,894
TOTAL EXPENSES 479,650
Less--expense reimbursement from The Dreyfus Corporation
due to undertaking--Note 3(a) (275,473)
NET EXPENSES 204,177
INVESTMENT (LOSS) (53,925)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments and foreign currency
transactions (3,577,954)
Net unrealized appreciation (depreciation) on investments and
foreign currency transactions (2,247,759)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (5,825,713)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (5,879,638)
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income (loss)--net (53,925) (44,299)
Net realized gain (loss) on investments (3,577,954) 2,285,760
Net unrealized appreciation (depreciation)
on investments (2,247,759) 3,162,746
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (5,879,638) 5,404,207
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
NET REALIZED GAIN ON INVESTMENTS (1,358,339) (913,689)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 33,276,148 5,886,112
Dividends reinvested 1,358,339 913,689
Cost of shares redeemed (15,805,785) (2,242,808)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 18,828,702 4,556,993
TOTAL INCREASE (DECREASE) IN NET ASSETS 11,590,725 9,047,511
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 14,835,807 5,788,296
END OF PERIOD 26,426,532 14,835,807
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,176,902 316,947
Shares issued for dividends reinvested 49,939 39,642
Shares redeemed (630,367) (134,149)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 596,474 222,440
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended December 31,
-------------------------
(Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C>
Net asset value, beginning of period 23.82 14.46 12.50
Investment Operations:
Investment income (loss)--net (.05)(b) (.10)(b) .00(c)
Net realized and unrealized
gain (loss) on investments (.99) 11.04 1.97
Total from Investment Operations (1.04) 10.94 1.97
Distributions:
Dividends from investment income--net -- -- (.00)(c)
Dividends from net realized gain on investments (1.11) (1.58) (.01)
Total Distributions (1.11) (1.58) (.01)
Net asset value, end of period 21.67 23.82 14.46
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (5.26)(d) 76.05 15.79(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .75(d) 1.50 .38(d)
Ratio of net investment income (loss)
to average net assets (.20)(d) (.60) .02(d)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation 1.01(d) 2.14 .30(d)
Portfolio Turnover Rate 256.37(d) 319.31 3.98(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 26,427 14,836 5,788
(A) FROM SEPTEMBER 30, 1998 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31,1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(D) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company, operating as a series company currently offering twelve
series, including the Founders Passport Portfolio (the "portfolio) . The
portfolio is only offered to separate accounts established by insurance
companies to fund variable annuity contracts and variable life insurance
policies. The portfolio is a diversified series. The portfolio's investment
objective is capital appreciation. The Dreyfus Corporation ("Dreyfus") serves as
the portfolio's investment adviser. Dreyfus is a direct subsidiary of Mellon
Bank, N.A. ("Mellon"), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Founders Asset Management LLC ("Founders") serves as the
portfolio's sub-investment adviser. Founders is a 90%-owned subsidiary of
Mellon. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of Dreyfus, became the distributor of the portfolio's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Trustees. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Series' books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains or losses arise from changes in the value of
assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $5,444 during the period ended June 30, 2000 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(E) FEDERAL INCOME TAXES: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The portfolio participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the portfolio has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to the portfolio at rates based on
prevailing market rates in effect at the time of borrowings. During the period
ended June 30, 2000, the portfolio did not borrow under the Facility.
NOTE 3--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31, 2000, to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate annual expenses
exclusive of taxes, brokerage fees, interest on borrowings and extraordinary
expenses, exceed an annual rate of 1.50% of the value of the portfolio's
average daily net assets. The expense reimbursement, pursuant to the
undertaking, amounted to $275,473 during the period ended June 30, 2000.
Pursuant to a Sub-Investment Advisory Agreement with Founders, the
sub-investment advisory fees are payable monthly by Dreyfus, and is based upon
the value of the portfolio's average daily net assets, computed at the following
annual rates:
AVERAGE NET ASSETS
0 to $100 million. . . . . . . . . . . . . . . . . .35 of 1%
In excess of $100 million to $1 billion. . . . . . .30 of 1%
In excess of $1 billion to $1.5 billion. . . . . . .26 of 1%
In excess of $1.5 billion. . . . . . . . . . . . . .20 of 1%
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $18 pursuant to the
transfer agency agreement.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$78,487,301 and $63,109,564, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$1,696,222, consisting of $2,931,683 gross unrealized appreciation and
$1,235,461 gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTES
For More Information
Dreyfus Investment Portfolios,
Founders Passport Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Founders Asset Management LLC
Founders Financial Center
2930 East Third Avenue
Denver, CO 80206
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 178SA006
Dreyfus
Investment Portfolios,
European Equity
Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios,
European Equity Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, European Equity Portfolio, covering the six-month period from
January 1, 2000 through June 30, 2000. Inside, you'll find valuable information
about how the fund was managed during the reporting period, including a
discussion with the portfolio manager, Joanna Bowen of Newton Capital Management
Limited, the portfolio's sub-investment adviser.
When the reporting period began, it had become apparent that global economic
growth was substantially stronger than many analysts had expected. In fact, most
global markets had already rebounded sharply from 1998's currency and credit
crises in emerging market countries. The rally continued into the first quarter
of 2000, before peaking in early March.
In April, many developed and emerging market countries around the world
experienced heightened levels of volatility when expensively priced technology
stocks began to decline sharply in the wake of evidence that inflationary
pressures were building. This correction, combined with a strong U.S. dollar
relative to many foreign currencies, erased much of the reporting period's early
gains.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, European Equity
Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Joanna Bowen, Portfolio Manager Newton Capital Management Limited,
Sub-Investment Adviser
How did Dreyfus Investment Portfolios, European Equity Portfolio perform
relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
European Equity Portfolio produced a total return of 2.45%.(1) In contrast, the
Financial Times Eurotop 300 Index, which serves as the portfolio's benchmark,
returned -3.52% in U.S. dollar terms for the same period.(2)
The portfolio's performance was positively impacted by two factors. First, the
portfolio's emphasis on technology, telecommunications and media boosted
performance during the first quarter of 2000. Second, a shift to more
value-oriented stocks cushioned the portfolio during the sharp second-quarter
downturn in the European stock market. However, the euro's continuing decline
relative to the U.S. dollar adversely affected performance.
What is the portfolio's investment approach?
The portfolio, which seeks to outperform the European stock market in U.S.
dollar terms, invests primarily in the 300 largest European companies. We
identify investment themes, such as the impact of new technologies, aging
populations and the communications revolution and long-term trends in currency
movements. We invest in companies that we believe are best positioned to benefit
from these trends. Within markets and sectors, we seek attractively priced
companies that possess a sustainable competitive advantage. In addition, we
attempt to identify and forecast key economic variables, such as gross domestic
product, inflation and interest rates.
What other factors influenced the portfolio's performance?
The euro, which began the year at about $1.02, ended the six-month period at
about 94 cents to the dollar. Stated another way, a U.S.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
investor who bought a portfolio of European stocks on January 1, 2000 would have
lost about 8 percent in dollar terms, even if the European stocks, which are
measured in euros, stayed the same price. The primary reason for the euro's
decline versus the dollar is that the United States has been growing more
rapidly and attracting more investment capital from around the world.
Indeed, the linkage between Europe and the U.S. goes beyond currency. Many of
Europe's leading companies share the same trends as their U.S. counterparts.
When market sectors, such as technology, decline in the U.S., a similar effect
takes place in Europe. The key to stock market performance during the first half
of 2000 was to take advantage of rising prices in technology, telecommunications
and media during the first quarter, while selling shares in these holdings
before they fell sharply in March and April. For example, the portfolio's
position in the large telephone companies was lower than the benchmark's
weighting because valuations had become extended and we believed increased
competition was a risk that could erode profitability.
However, certain areas of technology held up better in the second quarter, and
the portfolio benefited from holding, rather than selling, these stocks. For
instance, Telefonaktiebolaget LM Ericsson, a manufacturer of wireless phones and
infrastructure, continued to benefit from the demand for wireless telephony
infrastructure. Koninklijke (Royal) Philips Electronics, with its large exposure
to semiconductors, also held up well.
By and large, the portfolio's best-performing stocks in the second part of the
period were "defensive," meaning they provided protection during the downturn.
Examples included Koninklijke Numico, a Netherlands-based company specializing
in baby food and nutritional supplements, and Koninklijke Ahold, a food retailer
with more than 3,600 stores primarily in the Netherlands and the U.S. Another
profitable move was purchasing pharmaceutical stocks, which had lagged the
market. The portfolio holds two German healthcare companies: Fresenius, which
operates kidney dialysis centers in Europe and the U.S., and Altana, a
pharmaceutical company with some chemicals operations.
What is the portfolio's current strategy?
Given the euphoria of the first quarter and the correction of the second, we
believe the market will increasingly focus on stock fundamentals. The portfolio
continues to concentrate on investing in stocks that, in our opinion, provide
growth at a reasonable valuation and with relatively low risk. The fund has
adopted a more sector-neutral stance. However, the portfolio continues to
underweight banks where we believe the intense competitive environment will
continue to impact margins and stock valuations. Pricing continues to be an
important theme and the fund makes efforts to make investments in stocks with
pricing power and avoid those companies that suffer from pricing competition.
For example, Italy's cement market has become more attractive to investors
because it has recently consolidated through mergers, resulting in better
pricing and, therefore, greater profitability for the companies that remain.
Technology, telecommunications and media stocks were volatile during the
reporting period. Recently the portfolio has taken advantage of the correction
in the telecommunications sector to increase weightings. Information technology
service companies are also looking more attractive at these valuation levels.
The fund continues to hold an overweighted position in these sectors through
holdings in stocks that we believe offer good growth prospects.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: BLOOMBERG, L.P. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE FINANCIAL TIMES EUROTOP 300 INDEX IS
A MARKET CAPITALIZATION INDEX OF EUROPE'S 300 LARGEST COMPANIES.
The Portfolio
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--91.7% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
BELGIUM--1.1%
<S> <C> <C>
Lernout & Hauspie Speech Products 4,980 (a) 219,431
FINLAND--2.7%
Nokia 10,400 530,198
FRANCE--12.2%
Axa 2,634 414,531
Elior 35,300 (a) 445,443
HighWave Optical 900 (a) 64,811
Lafarge 2,600 201,862
Rexel 4,890 375,458
Total Fina Elf 4,440 680,120
Vivendi 2,710 238,965
2,421,190
GERMANY--3.0%
Altana 4,200 332,495
Gehe 3,400 108,638
Techem 6,400 (a) 152,608
593,741
IRELAND--2.4%
Bank of Ireland 53,000 333,639
Independent News & Media 39,600 143,528
477,167
ITALY--5.8%
Freedomland-Internet Television Network 700 (a) 27,040
Italcementi 32,916 309,244
Parmalat Finanziaria 318,000 442,830
Telecom Italia 27,300 374,437
1,153,551
NETHERLANDS--13.7%
Be Semiconductor Industries 10,900 (a) 169,981
Ing Groep 8,100 546,985
Koninklijke Ahold 7,200 211,721
Koninklijke Numico 6,400 303,385
Koninklijke (Royal) Philips Electronics 7,900 372,230
PinkRoccade 4,800 249,514
Seagull Holding 8,400 (a) 185,877
VNU 7,300 376,684
Wegener 12,800 164,817
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NETHERLANDS (CONTINUED)
Wolters Kluwer 5,560 147,957
2,729,151
PORTUGAL--1.1%
Portugal Telecom 18,900 211,995
SPAIN--3.1%
Actividades de Construccion y Servicious 8,000 225,097
Telefonica 18,800 (a) 403,457
628,554
SWEDEN--3.2%
Nobel Biocare 6,100 135,327
Telefonaktiebolaget LM Ericsson 25,800 512,196
647,523
SWITZERLAND--4.6%
Givaudan 377 (a) 114,610
Roche Holding 39 379,206
UBS 2900 424,382
918,198
UNITED KINGDOM--38.3%
BP Amoco 30,000 288,476
Bank of Scotland 52,038 496,050
Billiton 39,600 161,565
Bodycote International 76,000 250,711
British Telecommunications 25,700 332,882
CGNU 31,600 527,205
COLT Telecom Group 1,900 (a) 63,398
Capital Shopping Centres 28,400 176,604
Glaxo Wellcome 23,300 680,985
Granada 19,000 190,194
Imperial Chemical Industries 39,200 311,840
New Dixons Group 58,100 237,044
Northern Rock 40,600 209,365
Pennon Group 9,000 89,478
Prudential 26,900 394,937
Rentokil Initial 63,500 144,466
Reuters Group 14,400 246,142
Severn Trent 39,100 427,278
Shell Transport & Trading 93,800 784,600
The Portfolio
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
--------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
Smith (David S) Holdings 89,000 216,410
Stagecoach Holdings 131,600 145,706
Standard Chartered 23,600 294,586
Taylor Nelson Sofres 55,700 223,873
Vodafone AirTouch 179,100 725,281
7,619,076
UNITED STATES--.5%
LHS Group 2,800 (a) 99,081
TOTAL COMMON STOCKS
(cost $17,752,622) 18,248,856
--------------------------------------------------------------------------------
PREFERRED STOCKS--2.7%
--------------------------------------------------------------------------------
GERMANY:
Fielmann 7,600 246,462
Fresenius 1,280 291,786
TOTAL PREFERRED STOCKS
(cost $506,886) 538,248
--------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $18,259,508) 94.4% 18,787,104
CASH AND RECEIVABLES (NET) 5.6% 1,112,985
NET ASSETS 100.0% 19,900,089
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 18,259,508 18,787,104
Cash 2,370,934
Cash denominated in foreign currencies 489,534 491,118
Receivable for investment securities sold 207,451
Dividends receivable 38,261
Prepaid expenses 177
21,895,045
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 7,531
Payable for investment securities purchased 1,493,414
Payable for shares of Beneficial Interest redeemed 476,869
Accrued expenses 17,142
1,994,956
--------------------------------------------------------------------------------
NET ASSETS ($) 19,900,089
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 19,065,159
Accumulated undistributed investment income--net 90,728
Accumulated net realized gain (loss) on investments
and foreign currency transactions 215,617
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 528,585
--------------------------------------------------------------------------------
NET ASSETS ($) 19,900,089
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
1,252,333
NET ASSET VALUE, offering and redemption price per share ($) 15.89
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $23,896 foreign taxes withheld at source) 149,599
Interest 32,767
TOTAL INCOME 182,366
EXPENSES:
Investment advisory fee--Note 2(a) 70,719
Custodian fees 32,197
Auditing fees 10,303
Prospectus and shareholders' reports 7,931
Registration fees 3,582
Legal fees 956
Shareholder servicing costs 501
Trustees' fees and expenses--Note 2(b) 255
Miscellaneous 5,642
TOTAL EXPENSES 132,086
Less--reduction in management fee due to undertaking--Note 2(a) (39,827)
NET EXPENSES 92,259
INVESTMENT INCOME--NET 90,107
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments and foreign currency transactions
266,159
Net realized gain (loss) on forward currency exchange contracts (39,128)
NET REALIZED GAIN (LOSS) 227,031
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (116,456)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 110,575
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 200,682
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 90,107 8,471
Net realized gain (loss) on investments 227,031 516,578
Net unrealized appreciation (depreciation)
on investments (116,456) 645,041
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 200,682 1,170,090
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net -- (13,354)
Net realized gain on investments (459,765) (62,723)
TOTAL DIVIDENDS (459,765) (76,077)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 52,478,703 6,149,601
Dividends reinvested 459,765 76,077
Cost of shares redeemed (39,371,390) (727,597)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 13,567,078 5,498,081
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,307,995 6,592,094
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 6,592,094 --
END OF PERIOD 19,900,089 6,592,094
Undistributed investment income--net 90,728 621
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 3,179,029 456,730
Shares issued for dividends reinvested 26,982 4,827
Shares redeemed (2,366,620) (48,615)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 839,391 412,942
(A) FROM APRIL 30, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31,
1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 15.96 12.50
Investment Operations:
Investment income--net .11(b) .04(b)
Net realized and unrealized
gain (loss) on investments .33 3.61
Total from Investment Operations .44 3.65
Distributions:
Dividends from investment income--net -- (.03)
Dividends from net realized gain on investments (.51) (.16)
Total Distributions (.51) (.19)
Net asset value, end of period 15.89 15.96
--------------------------------------------------------------------------------
TOTAL RETURN (%) 2.45(c) 29.20(c)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .65(c) 1.01(c)
Ratio of net investment income
to average net assets .63(c) .32(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .28(c) 2.38(c)
Portfolio Turnover Rate 99.81(c) 99.89(c)
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 19,900 6,592
(A) FROM APRIL 30, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company operating as a series company currently offering twelve
series, including the European Equity Portfolio (the "portfolio"). The portfolio
is only offered to separate accounts established by insurance companies to fund
variable annuity contracts and variable life insurance policies. The portfolio
is a diversified series. The portfolio's investment objective is to provide
long-term capital growth. The Dreyfus Corporation ("Dreyfus") serves as the
portfolio's investment adviser. Dreyfus is a direct subsidiary of Mellon Bank,
N.A. which is a wholly-owned subsidiary of Mellon Financial Corporation. Newton
Capital Management Limited ("Newton"), an affiliate of Dreyfus, serves as the
portfolio's sub-investment adviser. Effective March 22, 2000, Dreyfus Service
Corporation ("DSC"), a wholly-owned subsidiary of Dreyfus, became the
distributor of the portfolio's shares, which are sold to the public without a
sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
bid and asked prices, except for open short positions, where the asked price is
used for valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Forward currency exchange contracts are valued
at the forward rate.
(b) Foreign currency transactions: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $32,009 during the period ended June 30, 2000, based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(e) Federal income taxes: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(a) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus had
undertaken from January 1, 2000 through February 29, 2000, to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate annual expenses,
exclusive of taxes, brokerage fees, interest on borrowings and extraordinary
expenses, exceeded an annual rate of 1.50% of the value of the portfolio's
average daily net assets, and thereafter, through December 31, 2000, to reduce
the investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate annual expenses
(exclusive of certain expenses as described above) exceed an annual rate of
1.25% of the value of the portfolio's average daily net assets. The reduction in
investment advisory fee, pursuant to the undertakings, amounted to $39,827
during the period ended June 30, 2000.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Newton, the
sub-investment fee is payable monthly by Dreyfus, and is based upon the value of
the portfolio's average daily net assets, computed at the following annual
rates:
Average Net Assets
0 to $100 million. . . . . . . . . . . . . . . . . .35 of 1%
In excess of $100 million to $1 billion. . . . . . .30 of 1%
In excess of $1 billion to $1.5 billion. . . . . . .26 of 1%
In excess of $1.5 billion. . . . . . . . . . . . . .20 of 1%
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $100 pursuant to the
transfer agency agreement.
(b) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 3--Securities Transactions:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts, during
the period ended June 30, 2000, amounted to $25,334,440 and $12,963,042,
respectively.
The portfolio enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings and to settle foreign currency transactions. When executing
forward currency exchange contracts, the portfolio is obligated to buy or sell a
foreign currency at a specified rate on a certain date in the future. With
respect to sales of forward currency exchange contracts, the portfolio would
incur a loss if the value of the contract increases between the date the forward
contract is opened and the date the forward contract is closed. The portfolio
realizes a gain if the value of the contract decreases between those dates. With
respect to purchases of forward currency exchange contracts, the portfolio would
incur a loss if the value of the contract decreases between the date the forward
contract is opened and the date the forward contract is closed. The portfolio
realizes a gain if the value of the contract increases between those dates. The
portfolio is also exposed to credit risk associated with counter party
nonperformance on these forward currency exchange contracts which is typically
limited to the unrealized gain on each open contract. At June 30, 2000, there
were no forward currency exchange contracts outstanding.
(b) At June 30, 2000, accumulated net unrealized appreciation on investments was
$527,596, consisting of $1,306,131 gross unrealized appreciation and $778,535
gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Portfolio
For More Information
Dreyfus Investment Portfolios, European Equity Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Newton Capital Management Limited
71 Queen Victoria Street
London, EC4V 4DR
England
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 181SA006
Dreyfus Investment Portfolios, Japan Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
8 Statement of Assets and Liabilities
9 Statement of Operations
10 Statement of Changes in Net Assets
11 Financial Highlights
12 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios,
Japan Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Japan Portfolio, covering the six-month period from January 1, 2000
through June 30, 2000. Inside, you'll find valuable information about how the
portfolio was managed during the reporting period, including a discussion with
the portfolio manager, Miki Sugimoto.
When the reporting period began, it had become apparent that global economic
growth was substantially stronger than many analysts had expected. In fact, most
global markets had already rebounded sharply from 1998's currency and credit
crises in emerging market countries. The rally continued into the first quarter
of 2000, before peaking in early March.
In April, many developed and emerging market countries around the world
experienced heightened levels of volatility when expensively priced technology
stocks began to decline sharply in the wake of evidence that inflationary
pressures were building. This correction, combined with a strong U.S. dollar
relative to many foreign currencies, erased much of the reporting period's early
gains.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, Japan Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Miki Sugimoto, Portfolio Manager
How did Dreyfus Investment Portfolios, Japan Portfolio perform relative to its
benchmark?
For the six-month period ended June 30, 2000 Dreyfus Investment Portfolios,
Japan Portfolio produced a total return of 16.84%.(1) This compares with the
-5.37% total return provided by the Morgan Stanley Capital International (MSCI)
Japan Index, the portfolio's benchmark, for the same period.(2)
We attribute the portfolio's strong performance to our move away from stocks
with relatively high valuations and our emphasis on low-valued stocks that we
believe have the ability to achieve reasonable earnings growth. In addition, in
early March the portfolio benefited from a wave of initial public offerings
(IPOs) within the small-cap stock market sector. Investors should note that as
the portfolio's asset base increases, IPOs are likely to have a diminished
effect on the portfolio's performance.
What is the portfolio's investment approach?
The portfolio seeks long-term capital growth. To pursue this goal, the portfolio
invests primarily in stocks of Japanese companies. Generally, the portfolio
invests at least 60% of its assets in Japanese companies with market
capitalizations of at least $1.5 billion at the time of investment. The
portfolio's investments may include common, preferred and convertible stocks,
including those purchased through IPOs.
The portfolio manager utilizes a "top-down," theme-driven investment approach to
stock selection. The portfolio manager first attempts to identify overall
economic trends, and then begins to narrow the search to industry groups that
are believed to have the potential to benefit from these trends. The portfolio
manager also considers economic variables, such as the relative valuations of
equities and bonds, and trends in the currency exchange markets. The investment
themes and economic variables provide a framework for the portfolio's stock
selection process.
We consider three primary criteria when selecting stocks for the portfolio.
First, we look either for industries with positive long-term
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
outlooks or industries that are undergoing dramatic change. Second, we look for
companies with quality management teams and strong franchises. Third, we strive
to identify high quality companies with high intrinsic values as measured by
fundamental valuation criteria such as earnings outlook, business prospects, and
asset values.
What other factors influenced the portfolio's performance?
During the past six months the portfolio emphasized two investment themes, both
of which have positively affected performance. First, we favored stocks with
lower valuations and reasonable earnings growth, primarily within the non-bank
finance and pharmaceutical sectors. Second, we preferred stocks that have
benefited from the Japanese recovery, particularly those within the capital
expenditure sector that stand to benefit from an improving euro currency.
From mid-February to mid-April, the global equity markets experienced a sharp
correction in many telecommunications, media and technology companies. During
this period, we began to shift the portfolio's emphasis away from the higher
priced stocks in these areas and toward companies that had lower valuations and
reasonable earnings growth. With that in mind, we found many attractive stocks
within the non-bank consumer finance sector. Despite generally strong earnings
growth, the sector traded on a low earnings multiple due to investors' concerns
over changes in Japanese regulations that lowered the maximum lending ability of
individual finance companies from 40% to 29% of their total assets. This
regulatory change was intended to allow smaller finance companies to be more
competitive with the larger, well-established finance companies. We believed
that investors' concerns were largely unfounded and that share prices would
eventually begin to reflect companies' earnings growth.
The pharmaceutical sector was another area in which the portfolio benefited from
this theme. By focusing on relatively low-priced stocks, we were able to achieve
attractive returns from holdings such as Daiichi Pharmaceutical, a company whose
stock price had fallen because it postponed the release of several new drugs
last year. We also benefited from our investment in Nippon Shinyaku, a company
whose name translates to "Japan's new drug." As a small company, we believe
Nippon Shinyaku is an excellent candidate for merger-and-acquisitions
activities, which are occurring more frequently within this industry group.
Overall, the pharmaceutical sector may benefit from the prospect of market
consolidation, as many foreign pharmaceutical companies are looking to expand
into Japan, which is the world' s second-largest pharmaceutical market.
Our second theme, emphasizing stocks that are benefiting from a recovering
Japanese economy and are directly tied into the euro, led us to stocks within
the capital expenditure sector, primarily larger cap machinery companies that
depend on exports for revenues. For example, we benefited from our holdings in
Komori, a printing company that exports one-third of its goods to Europe, and
Makita, a drilling company that also depends heavily on its export business.
What is the portfolio's current strategy?
In an uncertain investment environment, we continue to favor companies with
lower valuations and reasonable earnings growth, particularly those companies
within the non-bank financial and pharmaceutical sectors.
In addition, we are closely monitoring the U.S. economy and its equity markets.
In today's globalized investment environment, the U.S. is one of Japan's largest
markets and we are keeping a watchful eye for any changes that could have an
effect on Japan' s export business over the near term. In the meantime, we are
pleased with the economic recovery that has taken place in Japan during the past
six months, particularly within the larger cap industrial sectors, and are
optimistic about Japan' s prospects going forward.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES
NOT REFLECT THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN
CONNECTION WITH INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE
RETURNS. RETURN FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY
THE DREYFUS CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31,
2000, AT WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE
EXPENSES NOT BEEN ABSORBED, THE PORTFOLIO'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF NET DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY CAPITAL INTERNATIONAL
(MSCI) JAPAN INDEX IS A MARKET CAPITALIZATION INDEX OF JAPANESE COMPANIES BASED
ON MSCI-SELECTED CRITERIA.
The Portfolio
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--95.7% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--4.1%
<S> <C> <C>
Kao 2,000 61,219
TOSOH 8,000 40,435
101,654
COMMUNICATIONS--2.7%
NIPPON TELEGRAPH AND TELEPHONE 5 66,604
CONSTRUCTION--2.7%
RAITO KOGYO 16,000 66,660
CONSUMER CYCLICAL--9.9%
ADERANS 1,800 83,495
KIRIN BREWERY 4,000 50,071
NISSAN MOTOR 19,000 (a) 112,187
245,753
CONSUMER ELECTRONICS--7.8%
ALPINE ELECTRONICS 4,000 61,030
CASIO COMPUTER 6,000 67,454
FUNAI ELECTRIC 400 (a) 66,131
194,615
ELECTRICAL COMPONENTS--3.5%
IBIDEN 2,000 39,112
YASKAWA Electric 4,000 (a) 47,879
86,991
ELECTRONICS--11.1%
ANDO ELECTRONIC 3,000 (a) 69,438
FUJITSU 2,000 69,343
NEC 2,000 62,919
NIKON 2,000 74,256
275,956
FINANCIAL--16.3%
ACOM 1,000 84,270
AIFUL 800 73,916
Credit Saison 1,700 39,509
Dai-Tokyo Fire & Marine Insurance 19,000 67,671
Ichiyoshi Securities 2,000 16,835
Promise 900 71,252
Sumitomo Marine & Fire Insurance 9,000 52,461
405,914
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
MACHINERY--14.3%
GLORY 4,000 71,800
KOMORI 5,000 87,577
Makita 7,000 66,859
S.E.S. 4,000 62,352
TSUKISHIMA KIKAI 10,000 66,604
355,192
NON-FERROUS METALS--4.1%
Sumitomo Electric 6,000 103,051
PHARMACEUTICAL--9.2%
DAIICHI PHARMACEUTICAL 5,000 127,067
KYORIN Pharmaceutical 1,000 41,568
Nippon Shinyaku 6,000 60,595
229,230
REAL ESTATE--2.8%
Mitsubishi Estate 6,000 70,742
SERVICES--7.2%
Aoi Advertising Promotion 300 4,535
H.I.S. 1,500 74,256
MEITEC 2,500 99,197
177,988
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $2,204,633) 95.7% 2,380,350
CASH AND RECEIVABLES (NET) 4.3% 106,006
NET ASSETS 100.0% 2,486,356
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Portfolio
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 2,204,633 2,380,350
Cash 104,501
Receivable for investment securities sold 114,535
Dividends receivable 220
Prepaid expenses 440
Due from The Dreyfus Corporation and affliliates 4,024
2,604,070
--------------------------------------------------------------------------------
LIABILITIES ($):
Payable for investment securities purchased 105,090
Payable for shares of Beneficial Interest redeemed 10
Accrued expenses 12,614
117,714
--------------------------------------------------------------------------------
NET ASSETS ($) 2,486,356
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 2,094,105
Accumulated investment (loss)--net (16,523)
Accumulated net realized gain (loss) on investments
and foreign currency transactions 233,165
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 175,609
--------------------------------------------------------------------------------
NET ASSETS ($) 2,486,356
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
166,374
NET ASSET VALUE, offering and redemption price per share ($) 14.94
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $1,013 foreign taxes withheld at source) 5,741
Interest 1,931
TOTAL INCOME 7,672
EXPENSES:
Investment advisory fee--Note 2 (a) 11,454
Auditing fees 12,691
Prospectus and shareholders' reports 6,204
Legal fees 5,880
Custodian fees 2,971
Trustees' fees and expenses--Note 2 (b) 150
Registration fees 25
Shareholder servicing costs 9
Miscellaneous 3,415
TOTAL EXPENSES 42,799
Less--expense reimbursement from The Dreyfus Corporation due to
undertaking--Note 2 (a) (25,619)
NET EXPENSES 17,180
INVESTMENT (LOSS)--NET (9,508)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments and foreign currency
transactions 292,981
Net realized gain (loss) on forward currency exchange contracts (57,557)
NET REALIZED GAIN (LOSS) 235,424
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions 119,356
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 354,780
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 345,272
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income (loss)--net (9,508) 505
Net realized gain (loss) on investments 235,424 (2,259)
Net unrealized appreciation (depreciation)
on investments 119,356 56,253
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 345,272 54,499
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (7,520) --
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 100,129 2,000,000
Dividends reinvested 7,520 --
Cost of shares redeemed (13,544) --
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 94,105 2,000,000
TOTAL INCREASE (DECREASE) IN NET ASSETS 431,857 2,054,499
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 2,054,499 --
END OF PERIOD 2,486,356 2,054,499
Undistributed investment income (loss)--net (16,523) 505
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 6,900 160,000
Shares issued for dividends reinvested 440 --
Shares redeemed (967) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 6,373 160,000
(A) FROM DECEMBER 15, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31,
1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.84 12.50
Investment Operations:
Investment income--net (.06)(b) .00(b,c)
Net realized and unrealized
gain (loss) on investments 2.21 .34
Total from Investment Operations 2.15 .34
Distributions:
Dividends from investment income--net (.05) --
Net asset value, end of period 14.94 12.84
--------------------------------------------------------------------------------
TOTAL RETURN (%) 16.84(d) 2.64(d)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .75(d) .07(d)
Ratio of net investment income
to average net assets (.41)(d) .03(d)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation 1.11(d) 1.35(d)
Portfolio Turnover Rate 222.29(d) --
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 2,486 2,054
(A) FROM DECEMBER 15, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company operating as a series company currently offering twelve
series, including the Japan Portfolio (the "portfolio"). The portfolio is only
offered to separate accounts established by insurance companies to fund variable
annuity contracts and variable life insurance policies. The portfolio is a
diversified series. The portfolio's investment objective is to provide long-term
capital growth. The Dreyfus Corporation ("Dreyfus") serves as the portfolio's
investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A.
("Mellon"), which is a wholly-owned subsidiary of Mellon Financial Corporation.
Newton Capital Management Limited ("Newton") an affiliate of Dreyfus, serves as
the portfolio's sub-investment adviser. Effective March 22, 2000, Dreyfus
Service Corporation ("DSC"), a wholly-owned subsidiary of Dreyfus, became the
distributor of the portfolio's shares which are sold to the public without a
sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
As of June 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held 160,440 shares of the portfolio.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Trustees. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
$1,931 based on available cash balances left on deposit. Income earned under
this arrangement is included in interest income.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain, are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(E) FEDERAL INCOME TAXES: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31, 2000, to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate annual expenses,
exclusive of taxes, brokerage fees, interest on borrowings and extraordinary
expenses, exceed an annual rate of 1.50% of the value of the portfolio's average
daily net assets. The expense reimbursement, pursuant to the undertaking,
amounted to $25,619 during the period ended June 30, 2000.
Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Newton, the
sub-investment advisory fees are payable monthly by Dreyfus, and are based upon
the value of the portfolio's average daily net assets, computed at the following
annual rates:
AVERAGE NET ASSETS
0 to $100 million. . . . . . . . . . . . . . . . . .35 of 1%
In excess of $100 million to $1 billion. . . . . . .30 of 1%
In excess of $1 billion to $1.5 billion. . . . . . .26 of 1%
In excess of $1.5 billion. . . . . . . . . . . . . .20 of 1%
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 25, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 25, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 3--Securities Transactions:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
contracts, during the period ended June 30, 2000, amounted to $5,001,434 and
$5,016,085, respectively.
The portfolio enters into forward currency exchange contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings and to settle foreign currency transactions. When executing
forward currency exchange contracts, the portfolio is obligated to buy or sell a
foreign currency at a specified rate on a certain date in the future. With
respect to sales of forward currency exchange contracts, the portfolio would
incur a loss if the value of the contract increases between the date the forward
contract is opened and the date the forward contract is closed. The portfolio
realizes a gain if the value of the contract decreases between those dates. With
respect to purchases of forward currency exchange contracts, the portfolio would
incur a loss if the value of the contract decreases between the date the forward
contract is opened and the date the forward contract is closed. The portfolio
realizes a gain if the value of the contract increases between those dates. The
portfolio is also exposed to credit risk associated with counter party
nonperformance on these forward currency exchange contracts which is typically
limited to the unrealized gain on each open contract. At June 30, 2000, there
were no forward currency exchange contracts outstanding.
(B) At June 30, 2000, accumulated net unrealized appreciation on investments was
$175,717, consisting of $244,568 gross unrealized appreciation and $68,851 gross
unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Investment Portfolios, Japan Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Newton Capital Management Limited
71 Queen Victoria Street
London, EC4V 4DR, England
Custodian
Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 189SA006
Dreyfus
Investment Portfolios, Emerging Markets Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios,
Emerging Markets Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Emerging Markets Portfolio, covering the six-month period from
January 1, 2000 through June 30, 2000. Inside, you'll find valuable information
about how the portfolio was managed during the reporting period, including a
discussion with the portfolio manager, Daniel Beneat.
When the reporting period began, it had become apparent that global economic
growth was substantially stronger than many analysts had expected. In fact, most
global markets had already rebounded sharply from 1998's currency and credit
crises in emerging market countries. The rally continued into the first quarter
of 2000, before peaking in early March.
In April, many developed and emerging market countries around the world
experienced heightened levels of volatility when expensively priced technology
stocks began to decline sharply in the wake of evidence that inflationary
pressures were building. This correction, combined with a strong U.S. dollar
relative to many foreign currencies, erased much of the reporting period's early
gains.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Variable Investment Portfolios, Emerging
Markets Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Daniel Beneat, Portfolio Manager
How did Dreyfus Investment Portfolios, Emerging Markets Portfolio perform
relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
Emerging Markets Portfolio produced a total return of -7.54%.(1) This compares
with the -8.97% total return provided by the fund's benchmark, the Morgan
Stanley Capital International Emerging Markets Free (MSCI EMF) Index, for the
same period.(2)
We attribute the portfolio's performance to a stock market environment
characterized by high levels of volatility within emerging market countries. In
response to this volatility, we began shifting the portfolio's emphasis in
mid-March 2000, moving away from Asia and toward Europe. In addition, we shifted
emphasis away from small-cap to large-cap, more liquid companies. These shifts
caused the portfolio to slightly outperform its benchmark.
What is the portfolio's investment approach?
The portfolio seeks long-term capital growth by investing primarily in the
stocks of companies organized, or with a majority of their assets or business,
in emerging market countries. Normally, the portfolio will not invest more than
25% of its total assets in the securities of companies in any single emerging
market country.
When selecting stocks for the portfolio, we use a "top-down" country allocation
approach. We strive to identify and forecast key trends in global economic
variables, such as gross domestic product, inflation and interest rates;
investment themes, such as the impact of new technologies and the globalization
of industries and brands; relative values of equity securities, bonds and cash;
and long-term trends in currency movements.
Within those countries, we use a "bottom-up" approach to company and sector
analysis, which focuses on companies that we believe are attractively priced and
possess sustainable competitive advantage in
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
their country or sector. Our security-selection approach evaluates growth
factors on a company-by-company basis, looking at factors such as revenue
prospects, operating cash flow, ability to achieve consistent earnings and
management's ability to achieve higher operating margins.
What other factors influenced the portfolio's performance?
At the beginning of the reporting period, the emerging markets experienced high
levels of volatility, primarily due to two factors: a shift in investor
sentiment and a rising interest-rate environment in the United States. Investor
sentiment began to shift away from emerging markets after leading economic
indicators hinted that a slowdown in the U.S. was likely. In such an
environment, many industry analysts became concerned that slower growth in the
U.S. might adversely affect investments in other regions.
As interest rates continued to rise in the U.S., exports from many emerging
nations declined. As a result, stock prices and the portfolio's performance
suffered. By mid-March, investor sentiment shifted once again, this time away
from the previously favored growth style of investing and toward the value style
of investing. As a result, many technology and telecommunications stocks, which
produced the highest returns during the first three months of the year, quickly
fell out of favor. For example, several of the portfolio's technology holdings
in Taiwan, Korea, and to a lesser degree telecom companies in Brazil, were hurt
during this period. In response, we trimmed our exposure in these areas. As a
result, our performance improved from mid-March through the end of the reporting
period, allowing the fund to recapture some of its previous gains.
What is the portfolio's current strategy?
We have focused our asset-allocation strategy primarily on investments in the
European region. This stance is based on our belief that European economies
should improve if the U.S. economy slows down. We have also emphasized large-cap
names because we believe that they tend to perform better than their small-cap
counterparts in more volatile market environments.
In addition, we have increased our exposure to South Africa, where the currency
is linked to the euro. Because South Africa exports most of its goods to Europe,
this emphasis ties directly into our strategy of tilting the portfolio in favor
of Europe.
At this time, we are favoring investments in Brazil, where we are currently
emphasizing telecommunications and commodity-oriented stocks, such as paper and
steel companies. We have also enjoyed successes from several of our investments
in Mexico and Chile, where we believe stock prices are very reasonable
Conversely, we have limited our holdings in Southeast Asia -- particularly in
Korea, China and Hong Kong. In Korea, two large hedge funds were forced to
liquidate a large portion of their equity holdings, which resulted in lower
stock prices in many large-cap names. In China and Hong Kong, we are having
difficulties finding companies that offer adequate liquidity.
Finally, we are currently maintaining our diversification strategy, spreading
investments within the portfolio across numerous countries and industry groups
in seeking investment opportunities for our shareholders.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: BLOOMBERG, L.P. -- REFLECTS REINVESTMENT OF NET DIVIDENDS AND,
WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN STANLEY CAPITAL
INTERNATIONAL EMERGING MARKETS FREE (MSCI EMF) INDEX IS A MARKET
CAPITALIZATION-WEIGHTED INDEX COMPOSED OF COMPANIES REPRESENTATIVE OF THE MARKET
STRUCTURE OF 26 EMERGING MARKET COUNTRIES IN EUROPE, LATIN AMERICA AND THE
PACIFIC BASIN.
The Portfolio
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--101.1% Shares Value ($)
--------------------------------------------------------------------------------------------------------------
BRAZIL--13.1%
<S> <C> <C>
Aracruz Celulose, ADR 2,000 38,625
Companhia Paranaense de Energia--Copel , ADR 5,000 46,563
Companhia Vale do Rio Doce, ADR 1,000 (a) 28,594
Gerdau, ADR 2,700 34,256
Tele Norte Leste, ADR 2,600 61,425
Uniao de Bancos Brasileiros, GDR 2,200 63,250
272,713
CHILE--1.3%
Enersis, ADR 750 (a) 14,953
Santa Isabel, ADR 1,500 11,719
26,672
CZECH REPUBLIC--1.9%
Ceske Radiokomunikace, GDR 500 (a) 22,250
Cesky Telecom, GDR 1,000 (a) 16,750
39,000
GREECE--5.6%
Alpha Bank, GDR 3,600 35,190
Hellenic Bottling 1,000 15,876
Hellenic Telecommunications Organization 1,000 24,465
National Bank of Greece 630 24,781
STET Hellas Telecommunications, ADR 800 (a) 15,900
116,212
HONG KONG--6.2%
ASM Pacific Technology 6,000 22,474
Cathay Pacific Airways 5,000 9,268
China Telecom, ADR 250 (a) 44,453
HSBC 4,074 46,512
TCC International 30,000 6,311
129,018
HUNGARY--2.8%
MOL Magyar Olaj-es Gazipari, GDR 750 10,425
Magyar Tavkozlesi, ADR 1,375 47,352
57,777
INDIA--6.8%
India Fund 3,000 (a) 42,563
Infosys Technologies, ADR 300 53,175
COMMON STOCKS (CONTINUED) Shares Value ($)
--------------------------------------------------------------------------------------------------------------
INDIA (CONTINUED)
Videsh Sanchar Nigam, GDR 3,000 47,250
142,988
ISRAEL--4.1%
Bank Hapoalim 3,350 9,714
Bank Leumi Le-Israel 5,000 10,323
Bezeq Israeli Telecommunication 4,000 22,288
Teva Pharmaceutical, ADR 800 44,350
86,675
MALAYSIA--4.9%
Malaysian Pacific Industries 2,000 20,526
Tenaga Nasional 25,000 81,579
102,105
MEXICO--12.2%
Alfa 6,000 13,731
Cemex 5,000 23,470
Coca-Cola Femsa, ADR 1,500 28,313
Corporacion Interamericana de Entretenimiento, Cl. B 6,500 (a) 25,454
Fomento Economico Mexicano, ADR 1,000 (a) 43,063
Grupo Radio Centro, ADR 2,000 22,750
Grupo Televisa, GDR 750 (a) 51,703
Telefonos de Mexico, Cl. L, ADR 800 45,700
254,184
PHILIPPINES--.1%
Manila Electric, Cl. B 750 1,101
RUSSIA--2.7%
OAO Lukoil, ADR 750 38,438
Surgutneftegaz, ADR 750 10,055
Vimpel- Communications, ADR 400 (a) 8,850
57,343
SINGAPORE--2.0%
DBS Group 1,500 19,266
NatSteel 10,000 13,770
Neptune Orient Lines 10,000 (a) 9,257
42,293
SOUTH AFRICA--8.7%
Anglovaal Industries 20,000 (a) 18,673
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
--------------------------------------------------------------------------------------------------------------
SOUTH AFRICA (CONTINUED)
Anglovaal Mining 2,000 (a) 15,339
DataTec 1,100 (a) 7,593
Dimension Data 4,500 (a) 37,234
Harmony Gold Mining, ADR 6,000 33,375
Profurn 38,017 22,429
Sappi 3,200 (a) 24,071
Sasol, ADR 3,500 23,187
181,901
SOUTH KOREA--11.5%
H&CB, GDR 1,096 (a,b) 25,646
Korea Electric Power, ADR 2,000 (a) 36,875
Korea Telecom, ADR 1,000 (a) 48,375
LG Chemical, GDR 800 (a,b) 15,800
Pohang Iron & Steel, ADR 500 12,000
SK Telecom, ADR 1,155 (a) 41,941
Samsung Electronics, GDR 300 (b) 58,950
239,587
TAIWAN--12.9%
China Steel, GDR 2,000 27,250
Evergreen Marine, GDR 1,500 (a) 14,775
Hon Hai Precision, GDR 2,000 (a) 49,700
Macronix International, ADR 1,129 28,866
Siliconware Precision Industries, ADR 3,500 (a) 32,375
Taiwan Semiconductor Manufacturing, ADR 1,920 74,400
Winbond Electronics, GDR 1,443 41,703
269,069
TURKEY--3.8%
Akbank, ADR 15,000 22,875
Haci Omer Sabanci, ADR 6,780 19,831
Netas Northern Electric Telekomunikasyon 200,000 22,244
Tansas Izmir Buyuksehir Belediyesi Ic ve Dis Ticaret 100,000 (a) 15,474
80,424
COMMON STOCKS (CONTINUED) Shares Value ($)
--------------------------------------------------------------------------------------------------------------
VENEZUELA--.5%
Compania Anonima Nacional Telefonos
de Venezuela, ADR 400 10,875
--------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $2,175,019) 101.1% 2,109,937
LIABILITIES, LESS CASH AND RECEIVABLES (1.1%) (23,021)
NET ASSETS 100.0% 2,086,916
(A) NON-INCOME PRODUCING.
(B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT JUNE 30, 2000,
THESE SECURITIES AMOUNTED TO $100,396 OR APPROXIMATELY 4.8% OF NET ASSETS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 2,175,019 2,109,937
Dividends receivable 5681
Due from The Dreyfus Corporation and affliliates 2,808
2,118,426
--------------------------------------------------------------------------------
LIABILITIES ($):
Cash overdraft due to Custodian 19,588
Payable for shares of Beneficial Interest redeemed 8
Accrued expenses 11,914
31,510
--------------------------------------------------------------------------------
NET ASSETS ($) 2,086,916
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 2,073,776
Accumulated undistributed investment income--net 15,903
Accumulated net realized gain (loss) on investments
and foreign currency transactions 62,319
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions (65,082)
--------------------------------------------------------------------------------
NET ASSETS ($) 2,086,916
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares Beneficial Interest authorized)
165,957
NET ASSET VALUE, offering and redemption price per share ($) 12.58
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $1,442 foreign taxes withheld at source) 35,212
Interest 2,019
TOTAL INCOME 37,231
EXPENSES:
Investment advisory fee--Note 2 (a) 13,291
Auditing fees 10,191
Prospectus and shareholders' reports 5,807
Legal fees 5,215
Custodian fees 4,717
Trustees' fees and expenses--Note 2 (b) 138
Registration fees 21
Shareholder servicing costs 6
Miscellaneous 3,429
TOTAL EXPENSES 42,815
Less--expense reimbursement from The Dreyfus Corporation due to
undertaking--Note 2 (a) (21,550)
NET EXPENSES 21,265
INVESTMENT INCOME--NET 15,966
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments and foreign currency
transactions 62,344
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (240,669)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (178,325)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (162,359)
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 15,966 3,777
Net realized gain (loss) on investments 62,344 1,895
Net unrealized appreciation (depreciation)
on investments (240,669) 175,587
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (162,359) 181,259
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (3,840) --
Net realized gain on investments (1,920) --
TOTAL DIVIDENDS (5,760) --
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 185,495 2,000,000
Dividends reinvested 5,760 --
Cost of shares redeemed (117,479) --
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 73,776 2,000,000
TOTAL INCREASE (DECREASE) IN NET ASSETS (94,343) 2,181,259
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 2,181,259 --
END OF PERIOD 2,086,916 2,181,259
Undistributed investment income--net 15,903 3,777
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 14,902 160,000
Shares issued for dividends reinvested 407 --
Shares redeemed (9,352) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 5,957 160,000
(A) FROM DECEMBER 15, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.63 12.50
Investment Operations:
Investment income--net .10(b) .02
Net realized and unrealized
gain (loss) on investments (1.12) 1.11
Total from Investment Operations (1.02) 1.13
Distributions:
Dividends from investment income--net (.02) --
Dividends from net realized gain on investments (.01) --
Total Distributions (.03) --
Net asset value, end of period 12.58 13.63
--------------------------------------------------------------------------------
TOTAL RETURN (%) (7.54)(c) 9.04(c)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .99(c) .09(c)
Ratio of net investment income
to average net assets .75(c) .18(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation 1.01(c) 1.51(c)
Portfolio Turnover Rate 66.30(c) .43(c)
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 2,087 2,181
(A) FROM DECEMBER 15, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company, operating as a series company currently offering twelve
series, including the Emerging Markets Portfolio (the "portfolio" ). The
portfolio is only offered to separate accounts established by insurance
companies to fund variable annuity contracts and variable life insurance
policies. The portfolio is a non-diversified series. The portfolio's investment
objective is to provide long-term capital growth. The Dreyfus Corporation
("Dreyfus" ) serves as the portfolio's investment adviser. Dryefus is a direct
subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon
Financial Corporation. Effective March 22, 2000, Dreyfus Service Corporation
("DSC"), a wholly-owned subsidiary of Dreyfus, became the distributor of the
portfolio's shares which are sold to the public without a sales charge. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor.
As of June 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held 160,407 shares of the portfolio.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Trustees. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $1,962 for the period ended June 30, 2000, based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(E) FEDERAL INCOME TAXES: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Investment Advisory Fee and Other Transactions With Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of 1.25% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31, 2000, to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate annual expenses,
exclusive of taxes, brokerage fees, interest on borrowings and extraordinary
expenses, exceed an annual rate of 2% of the value of the portfolio's average
daily net assets. The expense reimbursement, pursuant to the undertaking,
amounted to $21,550 during the period ended June 30, 2000.
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $5 pursuant to the
transfer agency agreement.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$1,569,545 and $1,392,150, respectively.
At June 30, 2000, accumulated net unrealized depreciation on investments was
$65,082, consisting of $154,067 gross unrealized appreciation and $219,149 gross
unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Portfolio
For More Information
Dreyfus Investment Portfolios,
Emerging Markets Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 191SA006
Dreyfus Investment Portfolios,
Emerging Leaders Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios, Emerging Leaders Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Emerging Leaders Portfolio, covering the six-month period from
January 1, 2000 through June 30, 2000. Inside, you'll find valuable information
about how the portfolio was managed during the reporting period, including a
discussion with the portfolio managers, Paul Kandel and Hilary Woods.
While small-cap stock prices were ultimately little changed over the past six
months, the period was marked by high levels of volatility and dramatic shifts
in investor sentiment. Between January and mid-March, both small- and large-cap
stocks generally continued to advance, led by fast-growing technology stocks
that, many investors believed, would benefit most from the "new economy."
Subsequently, however, technology stocks corrected sharply over concerns about
rising interest rates and extremely high valuations. Other sectors of the stock
market also declined, erasing most of the gains achieved earlier in the year.
Also, primarily because of the precipitous drop in technology stock prices,
small-capitalization stocks generally outperformed large-cap stocks,
particularly in the value-oriented segment of the market, a reversal of the
trends established over the past several years. In our view, these short-term
swings in investor sentiment highlight once again the importance of broad
diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, Emerging Leaders
Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Paul Kandel and Hilary Woods, Portfolio Managers
How did Dreyfus Investment Portfolios, Emerging Leaders Portfolio perform
relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
Emerging Leaders Portfolio produced a total return of 15.97%.(1) This compares
with a total return of 3.04% for the portfolio's benchmark, the Russell 2000
Index of small-capitalization stocks, for the same period.(2)
We attribute the portfolio's strong performance to our success in identifying
attractive individual investment opportunities among a wide range of sectors,
industries and investment styles. The portfolio also succeeded in emphasizing
some of the market's strongest sectors and de-emphasizing some of the market's
weakest sectors.
What is the portfolio's investment approach?
The portfolio seeks capital growth by investing in a diversified group of
small-cap companies with total market values of $1.5 billion or less at the time
of purchase. We focus primarily on companies we believe are emerging leaders in
their respective industries. The companies in which we invest offer products,
processes or services that we believe enhance their prospects for future
earnings growth. Using fundamental research, we look for stocks with dominant
positions in major product lines, sustained records of achievement and strong
balance sheets. We also base investment decisions on the expected impact of
changes in a company's management or organizational structure.
Our investment approach targets growth-oriented stocks (those companies with
earnings that are expected to grow faster than the overall market),
value-oriented stocks (those that appear underpriced according to a number of
financial measurements) and stocks that exhibit both growth and value
characteristics. We typically sell a stock when the reasons for buying it no
longer apply or when the company begins to show deteriorating fundamentals or
poor relative performance.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
Volatile market conditions prevailed during the first six months of 2000. Strong
U.S. economic growth generated concerns about prospects for rising inflation,
which prompted the Federal Reserve Board to raise short-term interest rates. In
this environment of uncertainty, the stock market rose and fell rapidly, with
both growth- and value-oriented stocks advancing and retreating at various
times. Technology emerged as the strongest sector of the equities market,
although prices of many of the most speculative technology stocks fell as
investors emphasized financial stability and profitability. Energy stocks also
climbed higher, boosted by rising prices for oil and natural gas. Many other
sectors did not fare as well. In particular, consumer staples companies faced a
highly competitive global environment that limited their ability to increase
prices and curtailed profitability.
These conditions affected our allocation of the portfolio's assets. We added to
our position in technology, a move that generally increased returns despite
losses among a few of our Internet-related holdings. Our best performers in
technology were largely concentrated among companies developing components and
systems to build out wireless and data telecommunications networks, such as
NetOptix and TranSwitch. We also emphasized the portfolio's position in the
energy sector relative to the benchmark, successfully capitalizing on rising
commodity prices through investments in energy exploration and production
companies, such as Ocean Energy and Newpark Resources. On the other hand, we
limited the portfolio's exposure to utilities, a sector that often suffers when
energy prices rise. Although the utilities component of the Russell 2000
performed poorly, the utilities in which we invested, such as natural gas
distributor Kinder Morgan, generally proved to be strong performers.
The portfolio's weakest performance resided in the consumer staples sector,
which suffered from rising interest rates and the competitive pressures we noted
earlier. Some of our consumer-related investments were also hurt by
company-specific events. For example, the stock of Insight Communications, a
technologically advanced Midwest cable television operator, fell when an
anticipated acquisition failed to materialize. Nevertheless, we continued to
hold our investment because we believed the company's fundamentals remained
strong.
What is the portfolio's current strategy?
As of the end of the reporting period, we have reduced our exposure to most
types of cyclicals, such as housing, autos, industrial commodities and
machinery, in light of lower than expected employment and economic figures,
which indicate that the rate of the U.S. economic growth may be slowing.
Conversely, we have initiated positions in cyclicals which we feel may benefit
from a plateauing in energy prices.
We have also reduced our holdings in the technology and energy sectors, bringing
the portfolio's allocations in these sectors more in line with those of the
benchmark. We have replaced those holdings with consumer and financial stocks,
many of which have fallen to levels we consider attractive. We continue to
adhere to our blended growth-and-value investment strategy in seeking to
outperform the Russell 2000 Index.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURNS WOULD HAVE BEEN LOWER
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL 2000 INDEX IS AN UNMANAGED
INDEX OF SMALL-CAP STOCK MARKET PERFORMANCE AND IS COMPOSED OF THE 2,000
SMALLEST COMPANIES IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED
OF THE 3,000 LARGEST U.S. COMPANIES BASED ON TOTAL MARKET CAPITALIZATION.
The Portfolio
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
June 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
COMMON STOCKS--93.8% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--2.9%
<S> <C> <C>
Earthgrains 2,000 38,875
True North Communications 1,000 44,000
82,875
CONSUMER DURABLES--1.7%
Universal Electronics 2,000 (a) 49,125
CONSUMER NON-DURABLES--4.4%
Bush Boake Allen 1,200 (a) 52,500
Church & Dwight 1,900 34,200
Cott 6,300 (a) 37,800
124,500
CONSUMER SERVICES--5.7%
Emmis Communications, Cl. A 1,000 (a) 41,375
Radio One, Cl. A 600 (a) 17,738
Radio One, Cl. D 1,200 (a) 26,475
Scholastic 800 (a) 48,900
Station Casinos 1,100 (a) 27,500
161,988
ELECTRONIC TECHNOLOGY--18.8%
Aeroflex 1,000 (a) 49,688
Alpha Industries 800 (a) 35,250
C-Cube Microsystems 2,000 (a) 39,250
Integrated Silicon Solution 1,500 (a) 57,000
Microsemi 1,300 (a) 44,119
Plexus 400 (a) 45,200
RF Monolithics 3,300 (a) 52,800
Robotic Vision Systems 2,700 (a) 48,600
Semitool 3,000 (a) 51,937
Tollgrade Communications 400 (a) 53,000
TranSwitch 700 (a) 54,031
530,875
ENERGY MINERALS--3.0%
Newpark Resources 3,700 (a) 34,919
Ocean Energy 3,600 (a) 51,075
85,994
FINANCE--11.3%
AmeriCredit 2,000 (a) 34,000
Annuity and Life Re 1,600 39,200
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCE (CONTINUED)
Brown & Brown 800 41,600
Cullen/Frost Bankers 1,500 39,469
Everest Re Group 1,500 49,312
First Midwest Bancorp 1,700 39,525
RenaissanceRe Holdings 900 39,206
Westamerica Bancorporation 1,400 36,575
318,887
HEALTH TECHNOLOGY--9.2%
Alpharma, Cl. A 1,100 68,475
Cell Genesys 1,800 (a) 50,400
Cell Therapeutics 1,900 (a) 58,187
Cytyc 800 (a) 42,700
Matrix Pharmaceutical 3,000 (a) 39,188
258,950
INDUSTRIAL SERVICES--4.9%
Jacobs Engineering Group 1,100 (a) 35,956
Marine Drilling 1,900 (a) 53,200
Rowan 1,600 (a) 48,600
137,756
NON-ENERGY MINERALS--1.5%
Compania de Minas Buenaventura, A.D.R. 2,400 41,550
PROCESS INDUSTRIES--7.0%
Caraustar Industries 2,500 37,813
Cytec Industries 1,700 (a) 41,969
Ivex Packaging 4,500 (a) 50,062
Methanex 20,000 (a) 68,125
197,969
PRODUCER MANUFACTURING--2.3%
Masco Tech 3,000 32,437
Titan International 6,000 31,875
64,312
RETAIL TRADE--1.2%
Casey's General Stores 3,300 34,238
TECHNOLOGY SERVICES--13.3%
Aspen Technology 1,200 (a) 46,200
iBasis 900 (a) 38,756
Laboratory Corporation of America Holdings 570 (a) 43,961
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY SERVICES (CONTINUED)
National Data 1,300 29,900
New Era of Networks 1,500 (a) 63,750
Paradyne Networks 1,200 (a) 39,075
Primus Knowledge Solutions 1,200 (a) 54,000
Triad Hospitals 2,500 (a) 60,469
376,111
TRANSPORTATION--3.3%
OMI 9,500 (a) 51,656
SkyWest 1,100 40,769
92,425
UTILITIES--3.3%
Cleco 1,000 33,500
Kinder Morgan 1,700 58,756
92,256
TOTAL COMMON STOCKS
(cost $2,198,952) 2,649,811
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--7.6% Amount ($) Value
------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS:
5.67%, 8/31/2000 12,000 11,890
5.71%, 9/7/2000 4,000 3,959
5.76%, 9/14/2000 41,000 40,531
5.69%, 10/5/2000 20,000 19,702
5.70%, 10/12/2000 140,000 137,753
TOTAL SHORT-TERM INVESTMENTS
(cost $213,763) 213,835
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $2,412,715) 101.4% 2,863,646
LIABILITIES, LESS CASH AND RECEIVABLES (1.4%) (38,943)
NET ASSETS 100.0% 2,824,703
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 2,412,715 2,863,646
Receivable for investment securities sold 67,955
Dividends receivable 1,341
Prepaid expenses 1,062
2,934,004
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 2,622
Cash overdraft due to Custodian 1,897
Payable for investment securities purchased 95,584
Accrued expenses 9,198
109,301
--------------------------------------------------------------------------------
NET ASSETS ($) 2,824,703
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 2,308,876
Accumulated investment (loss) (6,762)
Accumulated net realized gain (loss) on investments 71,658
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 450,931
--------------------------------------------------------------------------------
NET ASSETS ($) 2,824,703
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
181,361
NET ASSET VALUE, offering and redemption price per share ($) 15.58
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends 6,912
Interest 4,250
TOTAL INCOME 11,162
EXPENSES:
Investment advisory fee--Note 2(a) 10,731
Auditing fees 10,866
Legal fees 5,315
Prospectus and shareholders' reports 3,204
Custodian fees--Note 2(a) 1,956
Registration fees 82
Trustees' fees and expenses--Note 2(b) 47
Shareholder servicing costs 10
Miscellaneous 868
TOTAL EXPENSES 33,079
Less--expense reimbursement from The Dreyfus Corporation
due to undertaking--Note 2(a) (15,193)
NET EXPENSES 17,886
INVESTMENT (LOSS) (6,724)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments 75,469
Net unrealized appreciation (depreciation) on investments 298,212
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 373,681
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 366,957
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income (loss) (6,724) 922
Net realized gain (loss) on investments 75,469 (3,811)
Net unrealized appreciation (depreciation)
on investments 298,212 152,719
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 366,957 149,830
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (960) --
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 308,487 2,000,000
Dividends reinvested 960 --
Cost of shares redeemed (571) --
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 308,876 2,000,000
TOTAL INCREASE (DECREASE) IN NET ASSETS 674,873 2,149,830
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 2,149,830 --
END OF PERIOD 2,824,703 2,149,830
Undistributed investement income (loss)--net (6,762) 922
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 21,337 160,000
Shares issued for dividends reinvested 62 --
Shares redeemed (38) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 21,361 160,000
(A) FROM DECEMBER 15, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31,
1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.44 12.50
Investment Operations:
Investment income (loss)--net (.04)(b) .01
Net realized and unrealized gain (loss) on investments 2.19 .93
Total from Investment Operations 2.15 .94
Distributions:
Dividends from investment income--net (.01) --
Net asset value, end of period 15.58 13.44
--------------------------------------------------------------------------------
TOTAL RETURN (%) 15.97(c) 7.52(c)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .75(c) .07(c)
Ratio of net investment income to average net assets (.28)(c) .04(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation .63(c) 1.25(c)
Portfolio Turnover Rate 87.56(c) 1.79(c)
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 2,825 2,150
(A) FROM DECEMBER 15, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company, operating as a series company currently offering twelve
series, including the the Emerging Leaders Portfolio (the "portfolio"). The
portfolio is only offered to separate accounts established by insurance
companies to fund variable annuity contracts and variable life insurance
policies. The portfolio is a diversified series. The portfolio's investment
objective is to provide capital growth. The Dreyfus Corporation ("Dreyfus")
serves as the portfolio's investment adviser. Dreyfus is a direct subsidiary of
Mellon Bank, N.A. ("Mellon"), which is a wholly-owned subsidiary of Mellon
Financial Corporation. Effective March 22, 2000, Dreyfus Service Corporation
("DSC"), a wholly-owned subsidiary of Dreyfus, became the distributor of the
portfolio's shares, which are sold to the public without a sales charge. Prior
to March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor.
As of June 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held 160,062 shares of the portfolio.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses, which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles, which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
bid and asked prices, except for open short positions, where the asked price is
used for valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange.
(B) FOREIGN CURRENCY TRANSACTIONS: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments is recognized on the accrual
basis. Under the terms of the custody agreement, the fund received net earnings
credits of $280 during the period ended June 30, 2000 based on available cash
balances left on deposit. Income earned under this arrangement is included in
interest income.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain could be offset by capital loss
carryovers, if any, it is the policy of the fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Investment Advisory Fee and Other Transactions with Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of .90 of 1% of the value of the
portfolio's average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31, 2000 to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate annual expenses,
exclusive of taxes, brokerage fees, interest on borrowings and extraordinary
expenses, exceed an annual rate of 1.50% of the value of the portfolio's average
daily net assets. The expense reimbursement, pursuant to the undertaking,
amounted to $15,193 during the period ended June 30, 2000.
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the fund was charged $5 pursuant to the transfer
agency agreement.
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The portfolio compensates Mellon under a custody agreement for providing
custodial services for the portfolio. During the period ended June 30, 2000, the
portfolio was charged $1,956 pursuant to the custody agreement.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$2,197,590 and $1,984,486 respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$450,931, consisting of $543,727 gross unrealized appreciation and $92,796 gross
unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Investment Portfolios, Emerging Leaders
Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 192SA006
Dreyfus
Investment Portfolios, Founders Discovery Portfolio
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the portfolio are subject to change at any time based on
market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Contents
THE PORTFOLIO
------------------------------------------------------------
2 Letter from the President
3 Discussion of Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Portfolio
Dreyfus Investment Portfolios,
Founders Discovery Portfolio
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Investment
Portfolios, Founders Discovery Portfolio, covering the six-month period from
January 1, 2000 through June 30, 2000. Inside, you'll find valuable information
about how the portfolio was managed during the reporting period, including a
discussion with its portfolio manager, Robert Ammann of Founders Asset
Management LLC, the portfolio's sub-investment adviser.
While small-cap stock prices were ultimately little changed over the past six
months, the period was marked by high levels of volatility and dramatic shifts
in investor sentiment. Between January and mid-March, both small- and large-cap
stocks generally continued to advance, led by fast-growing technology stocks
that, many investors believed, would benefit most from the "new economy."
Subsequently, however, technology stocks corrected sharply over concerns about
rising interest rates and extremely high valuations. Other sectors of the stock
market also declined, erasing most of the gains achieved earlier in the year.
Also, primarily because of the precipitous drop in technology stock prices,
small-capitalization stocks generally outperformed large-cap stocks,
particularly in the value-oriented segment of the market, a reversal of the
trends established over the past several years. In our view, these short-term
swings in investor sentiment highlight once again the importance of broad
diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Investment Portfolios, Founders
Discovery Portfolio.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF PERFORMANCE
Robert Ammann, Portfolio Manager Founders Asset Management LLC, Sub-Investment
Adviser
How did Dreyfus Investment Portfolios, Founders Discovery Portfolio perform
relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Investment Portfolios,
Founders Discovery Portfolio produced a total return of 18.33%.(1) This compares
with the 3.04% total return provided by the Russell 2000 Index, the portfolio's
benchmark, for the same period.(2)
We attribute the portfolio's strong gains during the past six months to our
individual stock selection strategy in a difficult investment environment. We
found opportunities in a wide variety of small-cap companies, representing many
different industries, which have demonstrated an ability to provide long-term
earnings growth.
What is the portfolio's investment approach?
The portfolio invests primarily in equity securities of small and relatively
unknown U.S.-based companies that we believe possess high growth potential.
Typically, these companies are not listed on national securities exchanges, but
instead trade on the over-the-counter market. The portfolio may also invest in
larger companies if, in our opinion, they represent better prospects for capital
appreciation. Although the portfolio will normally invest in common stocks of
U.S.-based companies, it may invest up to 30% of its total assets in foreign
securities.
Rather than utilizing a "top-down" approach to stock selection, which relies on
forecasting stock market trends, we focus on a "bottom-up" approach, in which
stocks are chosen according to their own individual merits. Stock selection is
made on a company-by-company basis, with particular emphasis on companies that
we believe are well-managed and well-positioned within their industries.
The Portfolio
DISCUSSION OF PERFORMANCE (CONTINUED)
What other factors influenced the portfolio's performance?
The six-month reporting period was marked by high levels of stock market
volatility and changing investor preferences in three areas: technology versus
non-technology industry groups; small-cap versus mid- and large-cap stocks; and
growth- versus value- investment styles.
From the beginning of the year through mid-March 2000, the U.S. stock market
advanced sharply, driven primarily by strong gains within the technology sector.
During this period, the prices of many high-flying technology stocks continued
to climb, especially those stocks that were related to the "new economy" of
Internet-related products and services. In addition, small-cap companies
generally produced higher returns than their large-cap counterparts and the
growth style of investing outperformed the value style of investing.
By mid-March, however, those trends had generally begun to reverse themselves
when many technology stocks fell out of favor. Even during this downturn in the
technology sector as a whole, there were days when individual tech stocks
bounced back, which increased the stock market's volatility levels. In this
environment, which lasted through the end of May, large-cap stocks generally
produced higher returns than small-cap stocks, and the value style of investing
provided better returns than the growth style of investing. In such an
environment, the portfolio's strong performance was primarily due to its
holdings in the technology and health care sectors. In June, technology stocks
once again began to rebound, small-cap stocks performed better than large-cap
stocks, and growth-style investing outperformed the value-style investing
approach.
Within the technology area, which was the portfolio's largest sector
concentration during the period, we saw strong returns from semiconductor and
telecom equipment companies. A notable example is Brooks Automation, a supplier
of tool and factory hardware and software automation solutions, which provided
strong returns early in the period. In addition, Digital Microwave, currently a
top 10 holding in the portfolio, benefited from the development of "broadband
fixed wireless," which enables voice and data to be transmitted and received
without the costly need to lay fiber optic cable.
What is the portfolio's current strategy?
We are maintaining our bottom-up strategy of selecting stocks one at a time
based on their own individual merits. Accordingly, and in response to the
challenging market environment, we have recently been increasing our emphasis on
those stocks in which we have the most confidence because we believe they have
strong growth potential. This has led to a continued decline in the number of
stocks held in the portfolio, as well as some modest increases in portfolio
concentration among the portfolio's top holdings. As of June 30, 2000, the top
10 holdings comprised approximately 21% of the portfolio's assets.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, PORTFOLIO SHARES MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE PORTFOLIO'S PERFORMANCE DOES NOT REFLECT
THE DEDUCTION OF ADDITIONAL CHARGES AND EXPENSES IMPOSED IN CONNECTION WITH
INVESTING IN VARIABLE INSURANCE CONTRACTS, WHICH WILL REDUCE RETURNS. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF PORTFOLIO EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH DECEMBER 31, 2000, AT
WHICH TIME IT MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT
BEEN ABSORBED, THE PORTFOLIO'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL 2000 INDEX IS AN UNMANAGED
INDEX OF SMALL-CAP STOCK MARKET PERFORMANCE AND IS COMPOSED OF THE 2,000
SMALLEST COMPANIES IN THE RUSSELL 3000 INDEX. THE RUSSELL 3000 INDEX IS COMPOSED
OF THE 3,000 LARGEST U.S. COMPANIES BASED ON TOTAL MARKET CAPITALIZATION.
The Portfolio
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--89.3% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Auto Parts & Equipment--1.3%
<S> <C> <C>
Gentex 3,358 (a) 84,370
Biotechnology--1.1%
BioCryst Pharmaceuticals 836 (a) 23,983
Myriad Genetics 220 (a) 32,577
Protein Design Labs 103 (a) 16,990
73,550
Business Services--12.4%
Black Box 1,090 (a) 86,297
Braun Consulting 1,911 40,370
CDW Computer Centers 802 (a) 50,125
Corporate Executive Board 863 (a) 51,672
Digex, Cl. A 517 35,124
Dycom Industries 2,150 (a) 98,900
eLoyalty 1,713 21,841
Globix 1,425 (a) 41,770
Insight Enterprises 2,672 (a) 158,483
Management Network Group 2,119 74,165
Quanta Services 2,003 (a) 110,165
Razorfish, Cl. A 1,350 (a) 21,684
Tanning Technology 783 15,073
Zamba 2,061 (a) 11,335
817,004
Computer Networking--2.4%
Alteon Websystems 640 64,040
F5 Networks 1,644 89,701
153,741
Computer Software/Services--8.8%
Documentum 855 (a) 76,416
Eprise 1,078 17,720
Exchange Applications 1,814 (a) 48,298
Interwoven 480 52,793
Macromedia 400 (a) 38,675
Macrovision 1,516 (a) 96,906
Mercury Interactive 415 (a) 40,151
PC-Tel 1,638 62,244
Peregrine Systems 818 (a) 28,374
Pinnacle Systems 1,586 (a) 35,660
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Computer Software/Services (continued)
Remedy 518 (a) 28,879
Secure Computing 2,251 (a) 42,347
TenFold 685 (a) 11,260
579,723
Consumer Products--.8%
Fossil 2,550 (a) 49,566
Distribution--.3%
Patterson Dental 406 (a) 20,706
Electronics--3.4%
Methode Electronics, Cl. A 1,612 62,264
Optimal Robotics 1,222 (a) 46,894
SmartDisk 1,220 33,550
Titan 1,810 (a) 80,998
223,706
Financial Services--.7%
CompuCredit 1,550 (a) 46,500
Healthcare Services--1.7%
Accredo Health 1,233 (a) 42,616
Albany Molecular Research 1,289 (a) 70,170
112,786
Leisure & Entertainment--.7%
JAKKS Pacific 2,287 (a) 33,733
Liquid Audio 1,554 14,714
48,447
Manufacturing--7.3%
Adept Technology 940 (a) 43,945
American Superconductor 766 (a) 36,960
AstroPower 1,734 (a) 47,035
Capstone Turbine 450 20,278
GSI Lumonics 3,550 (a) 124,694
Insituform Technologies, Cl. A 945 (a) 25,633
Shaw Group 1,950 (a) 91,894
Trex 376 (a) 18,800
Valence Technology 1,720 (a) 31,712
Zomax 2,810 (a) 36,881
477,832
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Medical Supplies & Equipment--1.8%
MiniMed 269 (a) 31,742
PolyMedica 1,114 (a) 48,181
Zoll Medical 782 (a) 38,318
118,241
Oil & Gas--.3%
Syntroleum 1,170 (a) 20,036
Oil Services--7.0%
Cal Dive International 1,655 (a) 89,680
Core Laboratories 3,758 (a) 108,982
Helmerich & Payne 1,205 45,037
National-Oilwell 3,624 (a) 119,139
Veritas DGC 3,766 (a) 97,916
460,754
Pharmaceuticals--2.0%
Celgene 879 (a) 51,751
King Pharmaceuticals 1,028 (a) 45,104
Regeneron Pharmaceuticals 1,161 (a) 34,612
131,467
Photography & Imaging--.7%
Concord Camera 2,134 (a) 44,547
Publishing & Broadcasting--2.8%
Cox Radio, Cl. A 1,331 (a) 37,268
Entercom Communications 1,565 (a) 76,294
Pegasus Communications, Cl. A 1,440 (a) 70,650
184,212
Restaurants--.8%
CEC Entertainment 2,080 (a) 53,300
Retail--3.5%
Men's Wearhouse 1,711 (a) 38,177
Michaels Stores 2,060 (a) 94,374
Tweeter Home Entertainment Group 1,168 (a) 35,478
Ultimate Electronics 2,298 (a) 61,579
229,608
Semiconductors & Equipment--16.6%
ASM International 1,416 (a) 37,524
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
Semiconductors & Equipment (continued)
Advanced Energy Industries 962 (a) 56,698
American Xtal Technology 3,191 (a) 138,011
Brooks Automation 1,829 (a) 116,942
Cree 817 (a) 109,069
EMCORE 1,492 (a) 179,040
Kopin 933 (a) 64,610
M-Systems Flash Disk Pioneers 484 (a) 37,691
PRI Automation 608 (a) 39,757
Pericom Semiconductor 1,121 (a) 76,228
SanDisk 1,382 (a) 84,561
Silicon Storage Technology 640 (a) 56,520
Therma-Wave 2,048 45,696
Zoran 744 (a) 49,057
1,091,404
Telecommunication Equipment--9.9%
Digital Microwave 4,282 (a) 163,251
Harris 4,616 151,174
Netro 720 41,310
REMEC 3,319 (a) 138,983
Tekelec 894 (a) 43,080
Telaxis Communications 880 27,500
ViaSat 1,041 (a) 56,474
Vyyo 1,100 29,700
651,472
Telecommunication Services--2.1%
Aether Systems 100 20,500
ITXC 476 16,853
Spectrasite Holdings 2,680 76,045
TeleCorp, Cl. A 547 22,051
135,449
Transportation--.9%
C.H. Robinson Worldwide 1,129 55,885
Total Common Stocks
(cost $ 5,110,486) 5,864,306
The Portfolio
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
Short-Term Investments--36.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Agency Discount Notes;
Federal Home Loan Mortgage Corp.,
6.30%, 7/3/2000
(cost $2,359,174) 2,360,000 2,359,174
------------------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $7,469,660) 125.3% 8,223,480
Liabilities, Less Cash and Receivables (25.3%) (1,659,390)
Net Assets 100.0% 6,564,090
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
Assets ($):
Investments in securities--See Statement of Investments 7,469,660 8,223,480
Cash 171,728
Receivable for investment securities sold 30,046
Dividends receivable 913
8,426,167
--------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 10,200
Payable for investment securities purchased 1,840,125
Accrued expenses 11,752
1,862,077
--------------------------------------------------------------------------------
Net Assets ($) 6,564,090
--------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 5,742,565
Accumulated investment (loss) (10,147)
Accumulated net realized gain (loss) on investments 77,852
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 753,820
--------------------------------------------------------------------------------
Net Assets ($) 6,564,090
--------------------------------------------------------------------------------
Shares Outstanding
(unlimited number of $.001 par value shares of Beneficial Interest authorized)
400,619
NET ASSET VALUE, offering and redemption price per share ($) 16.38
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income ($):
Income:
Cash dividends 677
Interest 10,451
Total Income 11,128
Expenses:
Investment advisory fee--Note 2(a) 12,726
Custodian fees--Note 2(a) 13,266
Auditing fees 12,541
Prospectus and shareholders' reports 7,225
Legal fees 5,353
Registration fees 988
Trustees' fees and expenses--Note 2(b) 238
Shareholder servicing costs--Note 2(a) 6
Miscellaneous 241
Total Expenses 52,584
Less--expense reimbursement from The Dreyfus Corporation
due to undertaking--Note 2(a) (31,375)
Net Expenses 21,209
Investment (Loss) (10,081)
--------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 3 ($):
Net realized gain (loss) on investments 80,309
Net unrealized appreciation (depreciation) on investments 538,097
Net Realized and Unrealized Gain (Loss) on Investments 618,406
Net Increase in Net Assets Resulting from Operations 608,325
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
Operations ($):
Investment income (loss)--net (10,081) 1,214
Net realized gain (loss) on investments 80,309 5,863
Net unrealized appreciation (depreciation)
on investments 538,097 215,723
Net Increase (Decrease) in Net Assets
Resulting from Operations 608,325 222,800
--------------------------------------------------------------------------------
Dividends to Shareholders from ($):
Investment income--net (1,280) --
Net realized gain on investments (8,320) --
Total Dividends (9,600) --
--------------------------------------------------------------------------------
Beneficial Interest Transactions ($):
Net proceeds from shares sold 3,766,971 2,000,000
Dividends reinvested 9,600 --
Cost of shares redeemed (34,006) --
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions 3,742,565 2,000,000
Total Increase (Decrease) in Net Assets 4,341,290 2,222,800
--------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 2,222,800 --
End of Period 6,564,090 2,222,800
Undistributed investment income (loss)--net (10,147) 1,214
--------------------------------------------------------------------------------
Capital Share Transactions (Shares):
Shares sold 242,390 160,000
Shares issued for dividends reinvested 554 --
Shares redeemed (2,325) --
Net Increase (Decrease) in Shares Outstanding 240,619 160,000
(A) FROM DECEMBER 15, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
The Portfolio
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the portfolio would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the
portfolio's financial statements.
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.89 12.50
Investment Operations:
Investment income (loss)--net (.05)(b) .01
Net realized and unrealized gain (loss) on investments 2.60 1.38
Total from Investment Operations 2.55 1.39
Distributions:
Dividends from investment income--net (.01) --
Dividends from net realized gain on investments (.05) --
Total Distributions (.06) --
Net asset value, end of period 16.38 13.89
--------------------------------------------------------------------------------
Total Return (%) 18.33(c) 11.12(c)
--------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .75(c) .07(c)
Ratio of net investment income to average net assets (.35)(c) .06(c)
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus Corporation 1.10(c) 1.45(c)
Portfolio Turnover Rate 63.12(c) 7.49(c)
--------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 6,564 2,223
(A) FROM DECEMBER 15, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Investment Portfolios (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as an open-end management
investment company, operating as a series company currently offering twelve
series, including the Founders Discovery Portfolio (the "portfolio"). The
portfolio is only offered to separate accounts established by insurance
companies to fund variable annuity contracts and variable life insurance
policies. The portfolio is a diversified series. The portfolio's investment
objective is capital appreciation. The Dreyfus Corporation ("Dreyfus") serves as
the portfolio's investment adviser. Dreyfus is a direct subsidiary of Mellon
Bank, N.A. ("Mellon"), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Founders Asset Management LLC ("Founders") serves as the
portfolio's sub-investment adviser. Founders is a 90%-owned subsidiary of
Mellon. Effective March 22, 2000, Dreyfus Service Corporation ("DSC") a
wholly-owned subsidiary of Dreyfus, became the distributor of the portfolio's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
As of June 30, 2000, MBC Investments Corp., an indirect subsidiary of Mellon
Financial Corporation, held 160,554 shares of the portfolio.
The fund accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
The portfolio's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
sales price on the national securities market. Securities not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available. Securities for which
there are no such valuations are valued at fair value as determined in good
faith under the direction of the Board of Trustees. Investments denominated in
foreign currencies are translated to U.S. dollars at the prevailing rates of
exchange. Forward currency exchange contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The portfolio does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the portfolio's
books and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains or losses arise from changes in the value
of assets and liabilities other than investments in securities resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the portfolio received
net earnings credits of $1,661 during the period ended June 30, 2000 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the portfolio may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the portfolio not to distribute such
gain.
(E) FEDERAL INCOME TAXES: It is the policy of the portfolio to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(A) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment
advisory fee is computed at the annual rate of .90 of 1% of the value of the
portfolio' s average daily net assets and is payable monthly. Dreyfus has
undertaken from January 1, 2000 through December 31, 2000, to reduce the
investment advisory fee and reimburse such excess expenses paid by the
portfolio, to the extent that the portfolio's aggregate expenses exclusive of
taxes, brokerage fees, interest on borrowings and extraordinary expenses, exceed
an annual rate of 1.50% of the value of the portfolio's average daily net
assets. The expense reimbursement, pursuant to the undertaking, amounted to
$31,375 during the period ended June 30, 2000.
Pursuant to a Sub-Investment Advisory Agreement with Founders, the
sub-investment advisory fee is payable monthly by Dreyfus, and is
The Portfolio
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
based upon the value of the portfolio's average daily net assets, computed at
the following annual rates:
AVERAGE NET ASSETS
------------------------
0 to $100 million. . . . . . . . . . . . . . . . . .25 of 1%
In excess of $100 million to $1 billion. . . . . . .20 of 1%
In excess of $1 billion to $1.5 billion. . . . . . .16 of 1%
In excess of $1.5 billion. . . . . . . . . . . . . .10 of 1%
The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the portfolio. During the
period ended June 30, 2000, the portfolio was charged $5 pursuant to the
transfer agency agreement.
The portfolio compensates Mellon under a custody agreement for providing
custodial services for the portfolio. During the period ended June 30, 2000, the
portfolio was charged $13,266 pursuant to the custody agreement.
(B) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $25,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $1,000 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$4,868,640 and $1,806,950, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$753,820, consisting of $884,376 gross unrealized appreciation and $130,556
gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Portfolio
NOTES
For More Information
Dreyfus Investment Portfolios, Founders Discovery
Portfolio
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Founders Asset Management LLC
Founders Financial Center
2930 East Third Avenue
Denver, CO 80206
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-554-4611 or 516-338-3300
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Attn: Institutional Servicing
(c) 2000 Dreyfus Service Corporation 193SA006
