Dreyfus
High Yield
Strategies Fund
ANNUAL REPORT March 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's 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 FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Selected Information
7 Statement of Investments
16 Statement of Assets and Liabilities
17 Statement of Operations
18 Statement of Cash Flows
19 Statement of Changes in Net Assets
20 Financial Highlights
21 Notes to Financial Statements
26 Report of Independent Auditors
27 Important Tax Information
28 Dividend Reinvestment Plan
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus High Yield
Strategies Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus High Yield Strategies
Fund, covering the 12-month period from April 1, 1999 through March 31, 2000.
Inside, you' ll find valuable information about how the fund was managed during
the reporting period, including a discussion with Roger King, portfolio manager
and a member of the Dreyfus Taxable Fixed Income Team that manages the fund.
Tighter monetary policy represented the most significant influence on the bond
market over the past year. This was primarily a result of efforts by the Federal
Reserve Board to forestall a potential re-emergence of inflationary pressures.
The Federal Reserve raised short-term interest rates five times during the
reporting period, for a total increase of 125 basis points.
Higher interest rates generally led to an erosion of bond prices, especially
during 1999. During the first quarter of 2000, however, some bonds began to
rally, led higher by long-term U.S. Treasury securities, which rose because of
reduced supply amid robust demand from domestic and foreign investors.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus High Yield Strategies Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
April 12, 2000
DISCUSSION OF FUND PERFORMANCE
Roger King, Portfolio Manager Dreyfus Taxable Fixed Income Team
How did Dreyfus High Yield Strategies Fund perform relative to its benchmark?
For the 12-month period ended March 31, 2000, Dreyfus High Yield Strategies Fund
achieved a total return of -2.54%.(1) This compares to a -0.98% return for the
fund' s benchmark, the Merrill Lynch High-Yield Master II Index for the same
period.(2)
We attribute both the market' s and the fund's lackluster performance to a
continued shift in investor sentiment. Investors apparently believed that other
options offered better opportunities for greater gains with fewer risks. As a
result, individuals and institutions committed little new money to high yield
bond investments. In the absence of buying interest, prices steadily declined
across the high yield market. Many of the fund's holdings have been affected by
such deteriorating price conditions.
What is the fund's investment approach?
The fund's primary investment objective is high current income. To achieve this
goal, we generally invest most of the fund's assets in fixed-income securities
of below-investment-grade credit quality. Issuers of below-investment-grade
securities may be companies in the early stages of development or may be firms
with a highly leveraged financial structure. To compensate investors for taking
on greater risk, such companies must offer higher yields than those offered by
more established or conservatively financed corporations.
Our approach to selecting individual issues is based on careful credit analysis
- -- our projection of each issuer' s ability to meet its obligations as they
become due. To diversify our portfolio, we buy debt from a wide range of
issuers. Newly established companies are significant issuers of high yield debt;
they often must pay higher interest rates than more established firms. In
addition to purchasing new issues and
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
special situations, we balance our portfolio by buying "seasoned" bonds. These
bonds are issued by companies with established track records, that have been
outstanding for a number of years and now have a shorter time period remaining
until final maturity or projected retirement of the bond. We also seek out bonds
that are convertible into the issuer' s common stock.
Central to our approach is our emphasis on special situations. We search for
out-of-favor companies whose bonds we believe to be undervalued. We attempt to
identify and anticipate trigger events that could lead the market to discover
the value we have seen and create potential price appreciation. This emphasis,
while providing enhanced performance potential, can increase net asset value
volatility.
What other factors influenced the fund's performance?
By April 1999, when the reporting period began, investors had become less
concerned that economic weakness overseas would spill over into the U.S.
economy. In fact, previously hard-hit Asian economies recovered sharply, Europe
emerged from recession and the U.S. economy continued to move ahead strongly. In
response, the high yield bond market began to recover from its precipitous drop
of 1998. This recovery, however, was short lived and default rates continued at
high levels.
By mid-1999, investor sentiment shifted away from concerns that the economy
might slow to fears that it might grow too quickly. The Federal Reserve Board
began a series of interest-rate hikes, increasing short-term rates by a quarter
point three times in 1999. Because higher interest rates increase borrowing
costs for issuers of high yield bonds, investor interest in high yield bonds
waned.
The high yield market' s general decline continued through the end of 1999,
driven largely by Y2K-related concerns. In anticipation of year-end liquidity
problems that proved unfounded, funds flowed out of high yield mutual funds, and
fund managers sold bonds to meet redemptions. At the same time, institutional
investors took a defensive stance, largely withdrawing from the market. A large
supply of high yield issues was met by weak demand, and prices declined across
the board.
Even with Y2K-related liquidity issues behind it, the high yield bond market has
not recovered. The Federal Reserve Board has continued to raise interest rates
in 2000, which has depressed bond prices. In the high yield market, increased
concerns about potential defaults had also put downward pressure on bond prices.
Finally, investor preference for investment alternatives -- technology stocks in
particular -- has reduced demand for high yield bonds. Results over the past
fiscal quarter improved for the fund on a relative basis, due to capital
appreciation from certain special situation investments.
What is the fund's current strategy?
We are positioning the fund carefully in an attempt to protect it from market
volatility as well as to take advantage of potential gains from special
situations. Credit quality continues to improve, with an increase in the
percentage of the portfolio rated "BB" credit quality. The portfolio also
continues to focus on selected special situations with upside potential.
While the high yield market in its current distressed state may well offer the
cheapest prices seen in the past 10 years, we currently see no trigger event
that will spark renewed investor interest or confidence. For that reason, we
continue to focus on more defensive sectors that potentially can do well in all
economic environments.
April 12, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
BASED UPON NET ASSET VALUE PER SHARE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS.
(2) SOURCE: BLOOMBERG L.P. -- REFLECTS THE REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MERRILL LYNCH HIGH-YIELD MASTER II
INDEX IS AN UNMANAGED PERFORMANCE BENCKMARK COMPOSED OF U.S. DOMESTIC AND YANKEE
BONDS RATED BELOW INVESTMENT GRADE WITH AT LEAST $100 MILLION PAR AMOUNT
OUTSTANDING AND GREATER THAN OR EQUAL TO ONE YEAR TO MATURITY.
The Fund
SELECTED INFORMATION
March 31, 2000 (Unaudited)
Market Price per share March 31, 2000 $8 7/8
Shares Outstanding March 31, 2000 64,258,674
New York Stock Exchange Ticker Symbol DHF
MARKET PRICE (NEW YORK STOCK EXCHANGE)
<TABLE>
Fiscal Year Ended March 31, 2000
-----------------------------------------------------------------
QUARTER ENDED QUARTER ENDED QUARTER ENDED QUARTER ENDED
JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31,
1999 1999 1999 2000
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High $12 1/2 $12 1/4 $11 7/16 $11 1/16
Low 11 5/8 11 1/8 9 9/16 8 7/16
Close 12 1/16 11 3/8 9 15/16 8 7/8
PERCENTAGE (LOSS) based on change in Market Price*
April 29, 1998 (commencement of operations) through March 31, 2000 (25.52)%
April 1, 1999 through March 31, 2000 (14.35)
July 1, 1999 through March 31, 2000 (18.18)
October 1, 1999 through March 31, 2000 (16.03)
January 1, 2000 through March 31, 2000 (8.44)
NET ASSET VALUE PER SHARE
April 29, 1998 (commencement of operations) $ 15.00
March 31, 1999 11.83
June 30, 1999 11.70
September 30, 1999 11.06
December 31, 1999 10.46
March 31, 2000 10.06
PERCENTAGE (LOSS) based on change in Net Asset Value*
April 29, 1998 (commencement of operations) through March 31, 2000 (15.58)%
April 1, 1999 through March 31, 2000 (2.54)
July 1, 1999 through March 31, 2000 (4.38)
October 1, 1999 through March 31, 2000 (2.10)
January 1, 2000 through March 31, 2000 (1.40)
*WITH DIVIDENDS REINVESTED.
</TABLE>
<TABLE>
STATEMENT OF INVESTMENTS
March 31, 2000
Principal
BONDS AND NOTES--124.5% Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
AIRCRAFT & AEROSPACE--6.6%
Air 2 US, Ser. D,
<S> <C> <C>
Enhanced Equipment Notes, 12.266%, 2020 10,000,000 (a) 10,457,750
Aircraft Finance Trust,
Asset- Backed Notes,
Ser. 1999-1A, Cl. D, 11%, 2024 10,000,000 (a) 10,006,250
American Pacific,
Sr. Notes, 9.25%, 2005 13,825,000 14,136,063
Stellex Industries, Ser. B,
Sr. Sub. Notes, 9.5%, 2007 13,000,000 8,385,000
42,985,063
AUTOMOTIVE--11.3%
Advanced Accessory Systems/Capital, Ser. B,
Sr. Sub. Notes, 9.75%, 2007 7,000,000 6,125,000
Aetna Industries,
Sr. Notes, 11.875%, 2006 14,195,000 12,988,425
Anchor Lamina,
Sr. Sub. Notes, 9.875%, 2008 11,025,000 8,213,625
HCC Industries,
Sr. Sub. Notes, 10.75%, 2007 11,750,000 6,521,250
J.H. Heafner,
Sr. Notes, 10%, 2008 9,000,000 7,695,000
Lear,
Sr. Notes, 7.96%, 2005 20,000,000 18,570,060
United Auto Group:
Ser. A, Sr. Sub. Notes, 11%, 2007 12,000,000 12,060,000
Ser. B, Sr. Sub. Notes, 11%, 2007 1,000,000 1,005,000
73,178,360
BROADCASTING--6.0%
Acme Intermediate Holdings/Finance, Ser. B,
Sr. Secured Discount Notes, 0/12%, 2005 4,800,000 (b) 3,288,000
Acme Television/Finance, Ser. B,
Sr. Discount Notes, 0/10.875%, 2004 5,400,000 (b) 4,833,000
CD Radio,
Sr. Discount Notes, 0/15%, 2007 11,750,000 (b) 6,286,250
Telemundo Holdings,
Sr. Discount Notes, 0/11.5%, 2008 22,050,000 (b) 14,277,375
Tri-State Outdoor Media Group,
Sr. Notes, 11%, 2008 10,400,000 9,984,000
38,668,625
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ----------------------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS--4.9%
American Builders & Contractors, Ser. B,
Sr. Sub. Notes, 10.625%, 2007 10,000,000 8,350,000
American Eco, Ser. B,
Sr. Notes, 9.625%, 2008 20,645,000 7,948,325
ICF Kaiser International,
Sr. Sub. Notes, 13%, 2003 12,324,000 (c) 6,146,595
United Rentals,
Sr. Sub. Notes, 9.5%, 2008 10,000,000 9,200,000
31,644,920
BUSINESS SERVICES--1.4%
Employee Solutions, Ser. B,
Sr. Notes, 10%, 2004 10,000,000 4,550,000
U.S. Office Products,
Sr. Notes, 9.75%, 2008 12,250,000 4,471,250
9,021,250
CABLE TELEVISION--6.1%
Coaxial Communications/Phoenix,
Sr. Notes, 10%, 2006 5,650,000 5,452,250
Coaxial/Finance,
Sr. Discount Notes, 0/12.875%, 2008 11,000,000 (b) 6,792,500
Star Choice Communications,
Sr. Secured Notes, 13%, 2005 12,000,000 11,970,000
UIH Australia/Pacific:
Ser. B, Sr. Discount Notes, 0/14.75%, 2006 13,745,000 (b) 12,714,125
Ser. D, Sr. Discount Notes, 0/14.75%, 2006 2,655,000 (b) 2,455,875
39,384,750
CHEMICALS--5.7%
GNI Group,
Sr. Notes, 10.875%, 2005 9,000,000 3,645,000
ISG Resources,
Sr. Sub. Notes, 10%, 2008 10,050,000 8,894,250
Lyondell Chemical, Ser. A,
Notes, 9.625%, 2007 9,500,000 9,072,500
Sterling Chemicals:
Ser. A, Sr. Sub. Notes, 11.25%, 2007 8,450,000 6,907,875
Ser. B, Secured Notes, 12.375%, 2006 1,500,000 1,537,500
Sr. Sub. Notes, 11.75%, 2006 2,000,000 1,700,000
Trans-Resources:
Ser. B, Sr. Discount Notes, 0/12%, 2008 12,000,000 (b) 2,940,000
Ser. B, Sr. Notes, 10.75%, 2008 3,500,000 2,117,500
36,814,625
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
CONSUMER--9.9%
Amazon.com,
Sr. Discount Notes, 0/10%, 2008 9,500,000 (b) 5,605,000
BPC Holding, Ser. B,
Sr. Secured Notes, 12.5%, 2006 5,792,000 5,299,680
Carson, Ser. B,
Sr. Sub. Notes, 10.375%, 2007 10,000,000 10,750,000
Concord Camera, Ser. B,
Sr. Notes, 11%, 2005 15,000,000 14,812,500
Corning Consumer Products,
Sr. Sub. Notes, 9.625%, 2008 9,000,000 5,895,000
Decora Industries,
Sr. Secured Notes, 11%, 2005 12,000,000 6,420,000
E & S Holdings, Ser. B,
Sr. Sub. Notes, 10.375%, 2006 4,500,000 1,777,500
Revlon Consumer Products,
Sr. Sub. Notes, 8.625%, 2008 6,500,000 2,892,500
Sparkling Spring Water,
Sr. Sub. Notes, 11.5%, 2007 13,000,000 10,465,000
63,917,180
ENERGY--3.5%
Anker Coal Group, Ser. B,
Sr. Notes, 9.75%, 2007 6,680,000 4,255,762
Belden & Blake, Ser. B,
Sr. Sub. Notes, 9.875%, 2007 12,000,000 6,420,000
Michael Petroleum, Ser. B,
Sr. Notes, 11.5%, 2005 3,410,000 (c) 1,381,050
Northern Offshore ASA,
Sr. Notes, 10%, 2005 5,000,000 3,025,000
Petsec Energy, Ser. B,
Sr. Sub. Notes, 9.5%, 2007 15,250,000 (c) 7,701,250
22,783,062
ENTERTAINMENT--3.8%
American Skiing, Ser. B,
Sr. Sub. Notes, 12%, 2006 12,900,000 10,997,250
Booth Creek Ski Holdings, Ser. B,
Sr. Notes, 12.5%, 2007 11,500,000 8,308,750
Production Resource Group,
Sr. Sub. Notes, 11.5%, 2008 13,000,000 5,265,000
24,571,000
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL--4.9%
AmeriCredit,
Sr. Notes, 9.875%, 2006 10,000,000 9,975,000
Imperial Credit Industries, Ser. B,
Sr. Notes, 9.875%, 2007 4,750,000 3,538,750
Macsaver Financial Services,
Notes (Gtd. by Heilig-Meyers):
7.4%, 2002 2,000,000 1,490,000
7.875%, 2003 5,000,000 3,475,000
7.6%, 2007 10,000,000 5,950,000
Reliance Group Holdings,
Sr. Notes, 9%, 2000 8,100,000 7,290,000
31,718,750
FOOD & BEVERAGES--4.7%
CKE Restaurants,
Conv. Sub. Deb., 4.25%, 2004 2,700,000 1,481,625
Cuddy International,
Sr. Notes, 10.75%, 2007 11,100,000 5,217,000
Envirodyne Industries,
Sr. Notes, 10.25%, 2001 4,019,000 2,145,141
North Atlantic Trading, Ser. B,
Sr. Notes, 11%, 2004 16,000,000 15,280,000
SFC,
Sr. Sub. Discount Deb., 0/11%, 2009 329,987 (a,b,d) 0
SFC New Holdings,
Sr. Notes, 11.25%, 2001 6,890,000 (a) 6,373,250
30,497,016
FOREST PRODUCTS--1.3%
U.S. Timberlands Klamath Falls/Finance,
Sr. Notes, 9.625%, 2007 9,750,000 8,628,750
GAMING--1.8%
Jazz Casino,
Sr. Sub. Notes, 5.987%, 2009 10,148,175 (e) 2,970,293
Venetian Casino/Las Vegas Sands,
Notes, 14.25%, 2005 11,600,000 8,758,000
11,728,293
INDUSTRIAL--9.1%
Alliance Laundry Systems,
Sr. Sub. Notes, 9.625%, 2008 13,000,000 10,562,500
Elgin National Industries, Ser. B,
Sr. Notes, 11%, 2007 13,250,000 11,063,750
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- ----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL (CONTINUED)
International Knife & Saw,
Sr. Sub. Notes, 11.375%, 2006 4,500,000 3,082,500
Key Components/Finance,
Sr. Notes, 10.5%, 2008 14,000,000 12,670,000
Numatics, Ser. B,
Sr. Sub. Notes, 9.625%, 2008 12,375,000 9,961,875
Precise Technology, Ser. B,
Sr. Sub. Notes, 11.125%, 2007 12,650,000 11,195,250
58,535,875
METALS--1.4%
Recycling Industries,
Sr. Sub. Notes, 13%, 2005 10,000,000 (c) 450,000
Renco Steel Holdings,
Sr. Notes, 11.5%, 2003 15,150,000 8,408,250
8,858,250
PAPER & PACKAGING--3.1%
Fonda Group, Ser. B,
Sr. Sub. Notes, 9.5%, 2007 3,000,000 2,505,000
Indesco International,
Sr. Sub. Notes, 9.75%, 2008 10,000,000 3,450,000
SF Holdings Group, Ser. B,
Sr. Secured Discount Notes, 0/12.75%, 2008 26,550,000 (b) 14,270,625
20,225,625
PUBLISHING--1.3%
Day International Group,
Sr. Sub. Notes, 9.5%, 2008 10,000,000 8,450,000
REAL ESTATE--1.3%
LNR Property, Ser. B,
Sr. Sub. Notes, 9.375%, 2008 10,000,000 8,650,000
RETAIL--1.4%
J Crew Operating,
Sr. Sub. Notes, 10.375%, 2007 2,000,000 1,780,000
Rite Aid:
Conv. Notes, 5.25%, 2002 2,500,000 912,500
Deb., 6.875%, 2013 2,500,000 1,287,500
Notes, 6%, 2000 5,000,000 (a) 3,600,000
Notes, 6.7%, 2001 2,000,000 1,310,000
8,890,000
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
SHIPPING--3.0%
Cenargo International,
First Pfd. Ship Mortgage, 9.75%, 2008 10,000,000 8,525,000
Holt Group,
Sr. Notes, 9.75%, 2006 17,500,000 10,937,500
19,462,500
TECHNOLOGY--9.4%
Amkor Technologies,
Sr. Notes, 9.25%, 2006 10,000,000 9,700,000
Axiohm Transactions Solutions,
Sr. Sub. Notes, 9.75%, 2007 10,000,000 (c) 2,050,000
Details, Ser. B,
Sr. Sub. Notes, 10%, 2005 9,000,000 8,415,000
Entex Information Services,
Sr. Sub. Notes, 12.5%, 2006 10,000,000 10,050,000
Hadco,
Sr. Sub. Notes, 9.5%, 2008 5,000,000 4,850,000
Orbital Imaging, Ser. B,
Sr. Notes, 11.625%, 2005 8,950,000 5,683,250
Packard Bioscience, Ser. B,
Sr. Sub. Notes, 9.375%, 2007 10,895,000 9,751,025
Viasystems,
Sr. Sub. Notes, 9.75%, 2007 11,960,000 10,106,200
60,605,475
TELECOMMUNICATION/CARRIERS--6.6%
FirstWorld Communications,
Sr. Discount Notes, 0/13%, 2008 18,660,000 (b) 8,863,500
GST Equipment,
Sr. Secured Notes, 13.25%, 2007 7,000,000 4,900,000
MGC Communications, Ser. B,
Sr. Secured Notes, 13%, 2004 11,000,000 11,385,000
McLeodUSA,
Sr. Discount Notes, 0/10.5%, 2007 6,750,000 (b) 5,332,500
RSL Communications,
Sr. Notes, 9.125%, 2008 15,000,000 12,075,000
42,556,000
TEXTILES--1.3%
Sassco Fashions,
Sr. Notes, 12.75%, 2004 9,800,000 8,673,000
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION--4.2%
Canadian Airlines,
Sr. Notes, 12.25%, 2006 6,450,000 (c) 3,273,375
Fine Air Services,
Sr. Notes, 9.875%, 2008 10,000,000 8,050,000
TFM, S.A. de C.V.,
Sr. Notes, 10.25%, 2007 8,000,000 7,700,000
ValuJet,
Sr. Notes, 10.25%, 2001 9,000,000 8,055,000
27,078,375
WIRELESS COMMUNICATIONS--10.5%
Dolphin Telecom,
Sr. Discount Notes, 0/11.5%, 2008 15,250,000 (b) 6,023,750
Filtronic,
Sr. Notes, 10%, 2005 10,000,000 9,700,000
Globalstar/Capital,
Sr. Notes, 11.375%, 2004 4,500,000 1,597,500
OrbCommunications Global/Capital,
Sr. Notes, 14%, 2004 13,000,000 12,415,000
SBA Communications,
Sr. Discount Notes, 0/12%, 2008 15,000,000 (b) 9,750,000
Satelites Mexicanos, Ser. B,
Sr. Notes, 10.125%, 2004 10,000,000 7,925,000
Telesystem International Wireless:
Ser. B, Sr. Discount Notes, 0/13.25%, 2007 6,000,000 (b) 3,870,000
Ser. C, Sr. Discount Notes, 0/10.5%, 2007 6,500,000 (b) 3,672,500
Winstar Communications:
Sr. Notes, 12.5%, 2008 5,000,000 (a) 4,900,000
Sr. Notes, 12.75%, 2010 8,000,000 (a) 7,800,000
67,653,750
TOTAL BONDS AND NOTES
(cost $1,015,256,371) 805,180,494
- -----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--.5% Shares Value ($)
- ----------------------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION--.0%
Classic Communications 12,000 (a) 189,000
CONSTRUCTION--.0%
FWT, Cl. A 229,600 45,920
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
ENERGY--.0%
Anker Coal Group (warrants) 156 (a,d) 0
PAPER & PACKAGING--.0%
SF Holdings Group, Cl. C 4,928 (a,d) 49
TECHNOLOGY--.0%
Orbital Imaging (warrants) 3,950 (a,d) 79,494
TELECOMMUNICATION/CARRIERS--.5%
FirstWorld Communications (warrants) 18,660 (a,d) 3,265,500
TRANSPORTATION--.0%
Highwaymaster Communications (warrants) 8,660 (a,d) 2,165
TOTAL COMMON STOCKS
(cost $250,217) 3,582,128
- -----------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--7.9% Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
BROADCASTING--4.6%
Cumulus Media, Ser. A,
Cum., $137.50 9,179 8,582,365
Paxson Communications:
Cum., $1,325 1,082 11,063,450
Cum., Conv., $975 1,073 (a) 9,871,600
29,517,415
CONSTRUCTION--.2%
FWT, Ser. A,
Cum., $.10 2,296,000 1,033,200
PAPER & PACKAGING--.0%
SF Holdings Group, Ser. B,
Cum., $1,375 20 91,000
RETAIL--.8%
HMV Media Group,
Sr. Cum., $12.875 (Units) 6,500 (a,d,f) 5,200,000
WIRELESS COMMUNICATIONS--2.3%
Winstar Communications, Ser. C,
Cum., $142.50 10,000 14,900,000
TOTAL PREFERRED STOCKS
(cost $54,161,108) 50,741,615
Principal
SHORT-TERM INVESTMENTS--1.5% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER;
UBS Finance,
6.28%, 4/3/2000
(cost $9,926,536) 9,930,000 9,926,536
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $1,079,594,232) 134.4% 869,430,773
LIABILITIES, LESS CASH AND RECEIVABLES (34.4%) (222,754,471)
NET ASSETS 100.00% 646,676,302
(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 MARCH 31, 2000,
THESE SECURITIES AMOUNTED TO $61,745,060 OR 9.5% OF NET ASSETS.
(B) ZERO COUPON UNTIL A SPECIFIED DATE AT WHICH TIME THE STATED COUPON RATE
BECOMES EFFECTIVE UNTIL MATURITY.
(C) NON-INCOME PRODUCING---SECURITY IN DEFAULT.
(D) NON-INCOME PRODUCING.
(E) VARIABLE RATE SECURITY-INTEREST RATE SUBJECT TO PERIODIC CHANGE.
(F) WITH COMMON STOCK ATTACHED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 1,079,594,232 869,430,773
Interest receivable 26,331,471
Receivable for investment securities sold 10,361,932
Unrealized appreciation on interest rate swaps--Note 4(a) 6,614,749
Dividends receivable 304,875
Prepaid expenses and other assets 464,861
913,508,661
- -------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 709,707
Due to Shareholder Servicing Agent 76,634
Cash overdraft due to Custodian 13,202
Bank loan payable--Note 2 245,000,000
Payable for investment securities purchased 15,628,717
Swap expense payable 4,508,254
Interest payable--Note 2 739,594
Accrued expenses 156,251
266,832,359
- -------------------------------------------------------------------------------
NET ASSETS ($) 646,676,302
- -------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 954,105,414
Accumulated undistributed investment income--net 10,549,861
Accumulated net realized gain (loss) on investments (114,430,262)
Accumulated net unrealized appreciation (depreciation)
on investments and interest rate swaps--Note 4(b) (203,548,711)
- -------------------------------------------------------------------------------
NET ASSETS ($) 646,676,302
- -------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value
shares of Beneficial Interest authorized) 64,258,674
NET ASSET VALUE, per share ($) 10.06
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended March 31, 2000
- -------------------------------------------------------------------------------
INVESTMENT INCOME ($):
Interest 114,654,821
Cash dividends 5,055,615
TOTAL INCOME 119,710,436
EXPENSES:
Management fee--Note 3(a) 8,786,802
Interest expense--Note 2 15,666,800
Shareholder servicing costs--Note 3(a,b) 1,043,483
Trustees' fees and expenses--Note 3(c) 202,535
Prospectus and shareholders' reports 199,710
Professional fees 137,002
Custodian fees--Note 3(a) 79,288
Loan commitment fees--Note 2 57,250
Registration fees 52,444
Miscellaneous 68,485
TOTAL EXPENSES 26,293,799
INVESTMENT INCOME--NET 93,416,637
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (66,277,778)
Net unrealized appreciation (depreciation) on investments
and interest rate swaps (45,624,395)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (111,902,173)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (18,485,536)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CASH FLOWS
Year Ended March 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES ($):
Interest received 96,721,223
Dividends received 5,140,045
Interest and loan commitment fees paid (15,698,480)
Operating expenses paid (1,935,199)
Paid to The Dreyfus Corporation (8,876,164) 75,351,425
- -------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES ($):
Purchases of portfolio securities (275,807,347)
Proceeds from sales of portfolio securities 323,279,040
Purchases of short-term investments--net (4,659,240) 42,812,453
- -------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES ($):
Cash dividends paid (94,286,469)
Dividends reinvested (16,614,859)
Net repayments of reverse repurchase agreements (50,000,000) (127,671,610)
Decrease in cash 9,507,732
Cash at beginning of period 9,494,529
- -------------------------------------------------------------------------------
CASH AT END OF PERIOD (13,203)
- -------------------------------------------------------------------------------
RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES ($):
Net Increase in Net Assets Resulting from Operations (18,485,536)
- -------------------------------------------------------------------------------
ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Increase in dividends and interest receivable 1,440,643
Increase in interest and loan commitment fees 25,570
Decrease in accrued operating expenses (152,252)
Decrease in due from The Dreyfus Corporation and affiliates (89,362)
Net amortization of discount on investments (19,289,811)
Net realized gain on investments 66,277,778
Net unrealized depreciation on investments 45,624,395
- -------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 75,351,425
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended March 31,
-----------------------------------
2000 1999(a)
- -------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 93,416,637 85,720,719
Net realized gain (loss) on investments (66,277,778) (48,152,484)
Net unrealized appreciation (depreciation)
on investments (45,624,395) (157,924,316)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (18,485,536) (120,356,081)
- -------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (94,286,468) (74,301,027)
- -------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold -- 919,248,500
Dividends reinvested--Note 1(c) 16,614,859 18,142,050
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 16,614,859 937,390,550
TOTAL INCREASE (DECREASE) IN NET ASSETS (96,157,145) 742,733,442
- -------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 742,833,447 100,005
END OF PERIOD 646,676,302 742,833,447
Undistributed investment income--net 10,549,861 11,419,692
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold -- 61,352,500
Shares issued for dividends reinvested 1,443,677 1,455,830
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,443,677 62,808,330
(A) FROM APRIL 29, 1998 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements and market price data for the fund's shares.
Year Ended March 31,
-----------------------
2000 1999(a)
- --------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.83 15.00
Investment Operations:
Investment income--net 1.46 1.38
Net realized and unrealized
gain (loss) on investments (1.75) (3.35)
Total from Investment Operations (.29) (1.97)
Distributions:
Dividends from investment income--net (1.48) (1.20)
Net asset value, end of period 10.06 11.83
Market value, end of period 8 7_8 1 17_8
- --------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (14.35) (14.12)(c)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets 1.50 1.46(c)
Ratio of interest expense to average net assets 2.21 2.17(c)
Ratio of net investment income
to average net assets 13.20 11.64(c)
Portfolio Turnover Rate 28.37 59.40(d)
- -------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 646,676 742,833
(A) FROM APRIL 29, 1998 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1999.
(B) CALCULATED BASED ON MARKET VALUE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus High Yield Strategies Fund (the "fund" ) is registered under the
Investment Company Act of 1940, as amended (the "Act") as a non-diversified
closed-end management investment company. The fund' s primary investment
objective is to seek high current income by investing at least 65% of its total
assets in income securities rated below investment grade. The Dreyfus
Corporation (the "Manager" ) serves as the fund' s investment manager and
administrator. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon"), which is a wholly-owned subsidiary of Mellon Financial Corporation.
The fund' 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) 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 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. Interest rate swap transactions are valued based
on the net present value of all future cash settlement amounts based on implied
forward interest rates.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 fund received net
earnings credits of $18,488 during the period ended March 31, 2000 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income. The fund includes in interest income amounts paid
and received under its interest rate swap agreements.
(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 declared and paid at least annually.
To the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the fund not to distribute such gain.
For shareholders who elect to receive their distributions in additional shares
of the fund, in lieu of cash, such distributions will be reinvested either (i)
through receipt of additional unissued but authorized shares from the fund
(" newly issued shares") or (ii) by purchase of outstanding shares on the open
market on the New York Stock Exchange or elsewhere as defined in the dividend
reinvestment plan.
On March 30, 2000, the Board of Trustees declared a cash dividend of $.1167 per
share from investment income-net, payable on April 28, 2000 to shareholders of
record as of the close of business on April 13, 2000.
(d) Federal income taxes: It is the policy of the fund 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 Internal
Revenue Code of 1986, as amended, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes
The Fund has an unused capital loss carryover of approximately $64,412,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to March 31, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, $32,078,000 of the carryover expires in fiscal 2007 and
$32,334,000 expires in fiscal 2008.
NOTE 2--Borrowings:
The fund may borrow money from banks or enter into reverse repurchase agreements
for leveraging purposes.
The fund has entered into a $325,000,000 line of credit facility ("Facility")
which expires on June 15, 2001. Under the terms of the Facility the fund may
borrow under either a Eurodollar Loan, a Federal Funds Rate Loan or a
combination of the two. Interest is charged to the fund at rates in effect at
time of borrowing for the loan type chosen by the fund. In addition, the fund
pays a commitment fee of .10 of 1% on the unused portion of the Facility.
The average daily amount of borrowings outstanding during the period ended March
31, 2000 was approximately $268,770,000, with a related weighted average
annualized interest rate of 5.77%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management and administration agreement with the Manager, the
management and administration fee is computed at the annual rate of .90 of 1% of
the value of the fund's average weekly total assets minus the sum of accrued
liabilities (other than the aggregate indebtedness constituting financial
leverage) (the "Managed Assets") and is payable monthly.
The fund compensates ChaseMellon Shareholder Services, L.L.C., an affiliate of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the fund. During the period ended March 31, 2000, the fund was charged $29,108
pursuant to the transfer agency agreement.
The fund compensates Mellon, an affiliate of the Manager, under a custody
agreement for providing custodial services for the fund. During the period ended
March 31, 2000, the fund was charged $79,288 pursuant to the custody agreement.
(b) In accordance with the Shareholder Servicing Agreement, Paine Webber Inc.
provides certain shareholder services for which the fund pays a fee computed at
the annual rate of .10 of 1% of the value of the fund's average weekly Managed
Assets. During the period ended March 31, 2000, the fund was charged $976,311
pursuant to the Shareholder Servicing Agreement.
(c) Each Trustee who is not an "interested person" of the fund as defined in the
Act received, prior to August 1, 1999, $5,000 and as of August 1, 1999, receives
$17,000 per year plus $1,000 for each Board meeting attended and $2,000 for
separate committee meetings attended which are not held in conjunction with a
regularly scheduled Board meeting. In the event that there is a joint committee
meeting of the Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal
Funds, The Dreyfus/Laurel Funds Trust, collectively, (the "Dreyfus/Laurel
Funds" ) and the fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the fund. Each Trustee who is not an interested person
also receives $500 for Board meetings and separate committee meetings attended
that are conducted by telephone. The fund also reimburses each Trustee who is
not an "interested person" of the fund for travel and out-of-pocket expenses.
The Chairman of the Board receives an additional 25% of such compensation (with
the exception of reimbursable amounts).
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the period ended
March 31, 2000, amounted to $267,133,196 and $307,649,197, respectively.
In addition , the following summarizes open interest rate swap agreements at
March 31, 2000:
<TABLE>
RATE PAID RATE RECEIVED NET
SWAP NOTIONAL BY THE FUND BY THE FUND FLOATING TERMINATION UNREALIZED
COUNTER-PARTY PRINCIPAL ($) AT 3/31/2000 AT 3/31/2000 RATE INDEX DATE GAIN ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Chase 150,000,000 6.0875% 6.15% 3-month LIBOR 6/15/2003 4,953,233
J.P. Morgan 150,000,000 6.0205% 6.15% 3-month LIBOR 6/15/2001 1,661,516
6,614,749
</TABLE>
The fund enters into interest rate swaps to hedge its exposure to floating rate
financing currently utilized to leverage its portfolio. Interest rate swaps
involve the exchange of commitments to pay or receive interest, e.g., an
exchange of floating-rate payments for fixed rate payments. If forecasts of
interest rates and other factors are incorrect, investment performance will
diminish compared to what performance would have been if these investment
techniques were not used. Even if the forecasts are correct, there is the risk
that the positions may not correlate perfectly with the assets or liability
being hedged. The fund is also exposed to credit risk associated with counter
party nonperformance on these transactions as well as the fact that a liquid
secondary market for these transactions may not always exist.
(b) At March 31, 2000, accumulated net unrealized depreciation on investments
was $203,548,711, consisting of $23,854,415 gross unrealized appreciation and
$227,403,126 gross unrealized depreciation.
At March 31, 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 Fund
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
Dreyfus High Yield Strategies Fund
We have audited the accompanying statement of assets and liabilities of the
Dreyfus High Yield Strategies Fund (the "Fund"), including the statement of
investments, as of March 31, 2000, and the related statements of operations and
cash flows for the year then ended, and the statements of changes in net assets
and financial highlights for the year then ended and for the period from April
29, 1998 (commencement of operations) to March 31, 1999. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements and financial highlights. Our procedures included
confirmation of securities owned as of March 31, 2000 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Dreyfus High Yield Strategies Fund as of March 31, 2000, the results of its
operations and its cash flows for the year then ended, and the changes in its
net assets and financial highlights for the year then ended and for the period
from April 29, 1998 to March 31, 1999, in conformity with generally accepted
accounting principles.
New York, New York
May 9, 2000
IMPORTANT TAX INFORMATION (Unaudited)
For Federal tax purposes, the fund hereby designates 3.34% of the ordinary
dividends paid during the fiscal year ended March 31, 2000 as qualifying for the
corporate dividends received deduction. Shareholders will receive notification
in January 2001 of the percentage applicable to the preparation of their 2000
income tax returns.
The Fund
DIVIDEND REINVESTMENT PLAN (UNAUDITED)
To participate automatically in the Dividend Reinvestment Plan (the "Plan") of
the Dreyfus High Yield Strategies Fund (the "Fund" ) Fund shares must be
registered in either your name, or, if your Fund shares are held in nominee or
" street" name through your broker-dealer, your broker-dealer must be a
participant in the Plan. You may terminate your participation in the Plan, as
set forth below. All shareholders participating (the "Participants") in the Plan
will be bound by the following provisions:
ChaseMellon Shareholder Service, L.L.C. (the "Agent") will act as Agent for each
Participant, and will open an account for each Participant under the Plan in the
same name as their present shares are registered, and put into effect for them
the dividend reinvestment option of the plan as of the first record date for a
dividend or capital gains distribution.
Whenever the Fund declares an income dividend or capital gains distribution
payable in shares of the Fund or cash at the option of the shareholders, each
Participant that does not opt for cash distributions shall take such
distribution entirely in shares. If on the payment date for a dividend or
capital gains distribution, the net asset value is equal to or less than the
market price per share plus estimated brokerage commissions, the Agent shall
automatically receive such shares, including fractions, for each Participant's
account except in the circumstances described in the following paragraph. Except
in such circumstances, the number of additional shares to be credited to each
Participant' s account shall be determined by dividing the dollar amount of the
income dividend or capital gains distribution payable on their shares by the
greater of the net asset value per share determined as of the date of purchase
or 95% of the then current market price per share of the fund's shares on the
payment date.
Should the net asset value per share of the Fund shares exceed the market price
per share plus estimated brokerage commissions on the payment date for a share
or cash income dividend or capital gains distribution, the Agent or a
broker-dealer selected by the Agent shall endeavor, for a purchase period of 30
days to apply the amount of such dividend or capital gains distribution on each
Participant's shares
(less their pro rata share of brokerage commissions incurred with respect to the
Agent' s open-market purchases in connection with the reinvestment of such
dividend or distribution) to purchase shares of the Fund on the open market for
each Participant' s account. In no event may such purchase be made more than 30
days after the payment date for such dividend or distribution except where
temporary curtailment or suspension of purchase is necessary to comply with
applicable provisions of federal securities laws. If, at the close of business
on any day during the purchase period the net asset value per share equals or is
less than the market price per share plus estimated brokerage commissions, the
Agent will not make any further open-market purchases in connection with the
reinvestment of such dividend or distribution. If the Agent is unable to invest
the full dividend or distribution amount through open-market purchases during
the purchase period, the Agent shall request that, with respect to the
uninvested portion of such dividend or distribution amount, the Fund issue new
shares at the close of business on the earlier of the last day of the purchase
period or the first day during the purchase period on which the net asset value
per share equals or is less than the market price per share, plus estimated
brokerage commissions. These newly specified in the third paragraph hereof.
These newly issued shares will be valued at the then-current market price per
share of the Fund's shares at the time such shares are to be issued.
For purposes of making the dividend reinvestment purchase comparison under the
Plan, (a) the market price of the Fund's shares on a particular date shall be
the last sales price on the New York Stock Exchange on that date, or, if there
is no sale on such Exchange on that date, then the mean between the closing bid
and asked quotations for such shares on such Exchange on such date and (b) the
net asset value per share of the Fund's shares on a particular date shall be the
net asset value per share most recently calculated by or on behalf of the Fund.
Open-market purchases provided for above may be made on any securities exchange
where the Fund' s shares are traded, in the over-the-counter market or in
negotiated transactions and may be on such
The Fund
DIVIDEND REINVESTMENT PLAN (UNAUDITED) (CONTINUED)
terms as to price, delivery and otherwise as the Agent shall determine. Each
Participant' s uninvested funds held by the Agent will not bear interest, and it
is understood that, in any event, the Agent shall have no liability in
connection with any inability to purchase shares within 30 days after the
initial date of such purchase as herein provided, or with the timing of any
purchase effected. The Agent shall have no responsibility as to the value of the
Fund' s shares acquired for each Participant's account. For the purpose of cash
investments, the Agent may commingle each Participant's fund with those of other
shareholders of the Fund for whom the Agent similarly acts as Agent, and the
average price (including brokerage commissions) of all shares purchased by the
Agent as Agent shall be the price per share allocable to each Participant in
connection therewith.
The Agent may hold each Participant' s shares acquired pursuant to the Plan
together with the shares of other shareholders of the Fund acquired pursuant to
the Plan in noncertificated form in the Agent's name or that of the Agent's
nominee. The Agent will forward to each Participant any proxy solicitation
material; and will vote any shares so held for each Participant first in
accordance with the instructions set forth on proxies returned by the
participant to the Fund, and then with respect to any proxies not returned by
the participant to the Fund in the same portion as the Agent votes proxies
returned by the participants to the Fund. Upon a Participant's written request,
the Agent will deliver to the Participant, without charge, a certificate or
certificates for the full shares.
The Agent will confirm to each Participant each acquisition made for their
account as soon as practicable but not later than 60 days after the date
thereof. Although each Participant may from time to time have an undivided
fractional interest (computed to four decimal places) in a share of the Fund, no
certificates for a fractional share will be issued. However, dividends and
distributions on fractional shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Agent will adjust for any such undivided fractional interest in cash at the
market value of the Fund's shares at the time of termination.
Any share dividends or split shares distributed by the Fund on shares held by
the Agent for Participants will be credited to their accounts. In the event that
the Fund makes available to its shareholders rights to purchase additional
shares of other securities, the shares held for each Participant under the Plan
will be added to other shares held by the Participant in calculating the number
of rights to be issued to each Participant.
The Agent' s service fee for handling capital gains distributions or income
dividends will be paid by the Fund. Each Participant will be charged their pro
rata share of brokerage commissions on all open-market purchases.
Each Participant my terminate their account under the Plan by notifying the
Agent in writing. Such termination will be effective immediately if the
Participant' s notice is received by the Agent not less than ten days prior to
any dividend or distribution record date, otherwise such termination will be
effective shortly after the investment of such dividend distributions with
respect to any subsequent dividend or distribution. The Plan may be terminated
by the Agent or the Fund upon notice in writing mailed to each Participant at
least 90 days prior to any record date for the payment of any dividend or
distribution by the Fund. Upon any termination, the Agent will cause a
certificate or certificates to be issued for the full shares held for each
Participant under the Plan and cash adjustment for any fraction to be delivered
to them without charge. If a Participant elects by notice to the Agent in
writing in advance of such termination to have the Agent sell part or all of
their shares and remit the proceeds to them, the Agent is authorized to deduct a
$5.00 fee plus brokerage commission for this transaction from the proceeds.
These terms and conditions may be amended or supplemented by the Agent or the
Fund at any time or times but, except when necessary or appropriate to comply
with applicable law or the rules or policies of the Securities and Exchange
Commission or any other regulatory authority, only by mailing to each
Participant appropriate written
The Fund
DIVIDEND REINVESTMENT PLAN (UNAUDITED) (CONTINUED)
notice at least 30 days prior to the effective date thereof. The amendment or
supplement shall be deemed to be accepted by each Participant unless, prior to
the effective date thereof, the Agent receives written notice of the termination
of their account under the Plan. Any such amendment may include an appointment
by the Agent in its place and stead of a successor Agent under these terms and
conditions, with full power and authority to perform all or any of the acts to
be performed by the Agent under these terms and conditions. Upon any such
appointment of any Agent for the purpose of receiving dividends and
distributions, the Fund will be authorized to pay to such successor Agent, for
each Participant's account, all dividends and distributions payable on shares of
the Fund held in their name or under the Plan for retention or application by
such successor Agent as provided in these terms and conditions.
The Agent shall at all times act in good faith and agree to use its best efforts
within reasonable limits to insure the accuracy of all services performed under
this Agreement and to comply with applicable law, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless such error is
caused by the Agent's negligence, bad faith, or willful misconduct or that of
its employees.
These terms and conditions shall be governed by the laws of the State of New
York.
OFFICERS AND DIRECTORS
Dreyfus High Yield Strategies Fund
200 Park Avenue
New York, NY 10166
DIRECTORS
Joseph S DiMartino, Chairman
James M. Fitzgibbons
J. Tomlinson Fort
Arthur L. Goeschel
Kenneth A. Himmel
Stephen J. Lockwood
Roslyn M. Watson
Benaree Pratt Wiley
OFFICERS
President
Stephen E. Canter
Executive Vice President
Roger King
Vice President
Mark N. Jacobs
Vice President and Treasurer
Joseph Connolly
Secretary
Steven F Newman
Assistant Secretary
Jeffrey Prusnofsky
Assistant Secretary
Michael A. Rosenberg
Assistant Treasurer
William McDowell
PORTFOLIO MANAGERS
Michael Hoeh
Roger E. King
Gerald E. Thunelius
INVESTMENT ADVISER
The Dreyfus Corporation
CUSTODIAN
Mellon Bank, N.A.
COUNSEL
Kirkpatrick & Lockhart LLP
TRANSFER AGENT, DIVIDEND DISTRIBUTION AGENT
ChaseMellon Shareholder Services, L.L.C.
STOCK EXCHANGE LISTING
NYSE Symbol: DHF
INITIAL SEC EFFECTIVE DATE
4/23/98
THE NET ASSET VALUE APPEARS IN THE FOLLOWING PUBLICATIONS: BARRON'S, CLOSED-END
BOND FUNDS SECTION UNDER THE HEADING "MUNICIPAL BOND FUNDS" EVERY MONDAY; WALL
STREET JOURNAL, MUTUAL FUNDS SECTION UNDER THE HEADING "CLOSED-END BOND FUNDS"
EVERY MONDAY; NEW YORK TIMES, BUSINESS SECTION UNDER THE HEADING "CLOSED-END
BOND FUNDS--SINGLE STATE MUNICIPAL BOND FUNDS" EVERY SUNDAY.
NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED, THAT THE FUND MAY PURCHASE SHARES OF ITS COMMON
STOCK IN THE OPEN MARKET WHEN IT CAN DO SO AT PRICES BELOW THE THEN CURRENT NET
ASSET VALUE PER SHARE.
For More Information
Dreyfus
High Yield Strategies Fund
200 Park Avenue
New York, NY 10166
Manager
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
ChaseMellon Shareholder Services, LLC
450 West 33rd Street
New York, NY 10001
(c) 2000 Dreyfus Service Corporation 430AR003
