May 24, 2000
DREYFUS PREMIER NEXTECH FUND
SUPPLEMENT TO PROSPECTUS DATED
MAY 24, 2000
INITIAL OFFERING PERIOD
The fund is offering its shares during an initial offering period
which is currently scheduled to end on the earlier of June 23, 2000 or when the
fund reasonably believes that it has orders or commitments to purchase in the
aggregate approximately $1 billion in fund shares. During the initial offering
period, fund shares will be offered to the public at their initial net asset
value of $12.50 per share, plus any applicable sales charge. The fund will begin
to continuously offer its shares on June 26, 2000, unless it has approximately
$1 billion or more in assets, in which case, the fund will be closed to new
investors. If you submit an order to purchase fund shares before the end of the
initial offering period, your investment will be held in a special account in
Dreyfus Municipal Money Market Fund until June 23, 2000. At that time, your
investment (including any dividends) will be automatically exchanged from
Dreyfus Municipal Money Market Fund to the fund. If you already have an account
with Dreyfus Municipal Money Market Fund, a new account will be established for
you temporarily for your fund investment. Since such accounts opened in Dreyfus
Municipal Money Market Fund will be temporary, they will not have checkwriting
privileges or certain other investor privileges offered typically by Dreyfus
Municipal Money Market Fund. If you submit an order to purchase fund shares
before the end of the initial offering period and later decide you do not want
to invest in the fund, you must contact the fund before June 23, 2000 to stop
the exchange of your investment from Dreyfus Municipal Money Market Fund to the
fund.
The minimum initial investment for fund shares is $10,000. You may
submit an order to purchase fund shares before the end of the initial offering
period in writing by check, together with the Account Application, or by
telephone requesting an exchange from a Dreyfus money market fund in which you
own shares (other than shares held in an Exchange Account). Requests to exchange
from other Dreyfus funds will not be accepted. In each case, you must indicate
the Class of fund shares you wish to purchase.
If your purchase order for fund shares is not received before the end
of the initial offering period or if you fail to indicate the Class of fund
shares you wish to purchase, your order will not be accepted and your check will
be returned to you unless the fund receives further instructions from you.
Brokers and other authorized agents have different procedures for
submitting purchase orders. If you intend to submit a purchase order for fund
shares through a third party, such as your broker-dealer or financial adviser,
please contact your representative for instructions and information on
investment procedures. During the initial offering period, you may purchase fund
shares for IRAs only through your broker-dealer or other authorized agents.
<PAGE>
May 24, 2000
DREYFUS PREMIER NEXTECH FUND
SUPPLEMENT TO PROSPECTUS
DATED MAY 24, 2000
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION CONTAINED IN THE
SECTION OF THE FUND'S PROSPECTUS ENTITLED "YOUR INVESTMENT - SERVICES FOR FUND
INVESTORS."
CLASS B SHARES - DREYFUS AUTOMATIC WITHDRAWAL PLAN
For any fund account opened on or after July 24, 2000, or any existing fund
account to which the Dreyfus Automatic Withdrawal Plan ("AWP") is added on or
after July 24, 2000, there will be no CDSC on Class B shares redeemed pursuant
to an AWP withdrawal, as long as the amount of the withdrawal does not exceed an
annual rate of 12% of the greater of the account value at the time of the first
withdrawal under the AWP, or the account value at the time of the subsequent
withdrawal.
[GRAPHIC OMITTED]
DREYFUS PREMIER NEXTECH FUND
Investing in technology companies for
capital appreciation
PROSPECTUS May 24, 2000
DREYFUS [LOGO]
As with all mutual funds, the Securities
and Exchange Commission has not approved
or disapproved these securities or
passed upon the adequacy of this
prospectus. Any representation to the
contrary is a criminal offense.
<PAGE>
The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
<PAGE>
CONTENTS
THE FUND
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Goal/Approach 1
Main Risks 2
Past Performance 3
Expenses 4
Management 5
Financial Highlights 7
YOUR INVESTMENT
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Account Policies 8
Distributions and Taxes 11
Services for Fund Investors 12
Instructions for Regular Accounts 13
Instructions for IRAs 14
FOR MORE INFORMATION
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Back Cover
<PAGE>
DREYFUS PREMIER NEXTECH FUND THE FUND
Ticker Symbols: N/A
[ICON] GOAL/APPROACH
The fund seeks capital appreciation. To pursue this goal, the fund will invest
primarily in stocks of growth companies that Dreyfus believes are or will have
the potential to become leading producers or beneficiaries of technological
innovation. Up to 25% of the fund's assets may be invested in foreign
securities. The fund's stock investments may include common stocks, preferred
stocks and convertible securities.
In choosing investments, the fund will look for emerging sectors in technology
that Dreyfus believes are expected to outperform on a relative scale. The
sectors that Dreyfus believes to be most attractive will be overweighted. Among
the sectors Dreyfus currently expects to evaluate are internet products or
services (so-called e-commerce), optical communications components, wired and
wireless communications services, equipment and component suppliers, storage
devices and networks, computer hardware and software, and semiconductors. In
addition, the fund anticipates that it will invest in new technologies as they
are discovered or introduced.
Although the fund looks for companies with the potential for strong earnings
growth rates, some of the fund's investments may be in companies that are
experiencing losses. The fund has no restrictions on the size of a company in
which it can invest. The fund may invest a substantial amount of its assets in
the securities of small- and mid-cap companies. The fund will seek to invest
frequently in securities of companies in their initial public offerings (IPOs).
Some companies whose shares are purchased during an IPO will be sold shortly
after their purchase. The fund also may invest up to 10% of its assets in
private equity securities, such as securities of privately owned technology
companies that plan to conduct an IPO (so-called venture capital companies). As
part of its investment in venture capital companies, the fund may invest in
private investment funds that invest primarily in venture capital companies.
The fund currently intends to close to new investors after it reaches total
assets of approximately $1 billion.
[SIDE BAR]
CONCEPTS TO UNDERSTAND
SMALL AND MIDSIZE COMPANIES: new and often entrepreneurial companies. These
companies, especially those with smaller capitalizations, can, if successful,
grow faster than large-cap companies and typically use profits for expansion
rather than for paying dividends. Their share prices are more volatile than
those of larger companies. Small companies fail more often.
<PAGE>
GROWTH COMPANIES: companies of any capitalization whose earnings are expected to
grow faster than the overall market. Often, growth stocks have relatively high
price-to-earnings, price-to-book and price-to-sales ratios, and tend to be more
volatile than value stocks.
INITIAL PUBLIC OFFERING (IPO): a company's first offering of stock to the
public.
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[ICON] MAIN RISKS
While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. In fact, the technology sector has been among the
most volatile sectors of the stock market. The value of your investment will go
up and down, sometimes dramatically, which means that you could lose money.
The fund will focus on technology companies, which, if there is a market
downturn in the sector, could result in significant losses.
Technology companies, especially small-cap technology companies, involve greater
risk because their earnings tend to be less predictable (and some companies may
be experiencing significant losses) and their share prices tend to be more
volatile. The shares of smaller companies tend to trade less frequently than
those of larger companies, which can have an adverse affect on the pricing of
these securities and on the fund's ability to sell these securities when the
manager deems it appropriate. These companies may have limited product lines,
markets, or financial resources, or may depend on a limited management group. In
addition, these companies are strongly affected by worldwide technological
developments, and their products and services may not be economically successful
or may quickly become outdated. Investor perception may play a greater role in
determining the day-to-day value of tech stocks than it does in other sectors.
Other fund investments made in anticipation of future products and services may
decline dramatically in value if the anticipated products or services are
delayed or cancelled.
The fund will seek to purchase securities of companies in initial public
offerings or shortly thereafter. The prices of these companies' securities may
be very volatile.
Venture capital companies represent highly speculative investments by the fund.
There will be no public market for the shares of a venture capital company at
the time of the fund's investment, and there can be no assurance that a planned
IPO will ever be completed. Investments in venture capital funds will require
the fund to pay management and/or performance fees to the managers of such
funds, which will reduce returns to the fund and its shareholders.
Growth companies are expected to increase their earnings at a certain rate. If
these expectations are not met, investors can punish the stocks inordinately,
even if earnings show an absolute increase. In addition, growth stocks typically
lack the dividend yield that can cushion stock prices in market downturns.
<PAGE>
The fund is non-diversified, which means that a relatively high percentage of
the fund's assets may be invested in a limited number of issuers. Therefore, its
performance may be more vulnerable to changes in the market value of a single
issuer or a group of issuers.
Under adverse market conditions, the fund could invest some or all of its assets
in money market securities. Although the fund would do this to avoid losses, it
could reduce the benefit from any upswing in the market. During such periods,
the fund may not achieve its investment objective.
[SIDE BAR]
OTHER POTENTIAL RISKS
The fund, at times, may invest in certain derivatives, such as options and
futures, and in foreign currencies. It also may sell short, which involves
selling a security it does not own in anticipation of a decline in the market
price of the security. When employed, these practices will be used both to hedge
the value of the fund's portfolio and to increase returns; however, these
practices sometimes may lower returns or increase volatility. Derivatives can be
illiquid and highly sensitive to changes in their underlying instrument. A small
investment in certain derivatives could have a potentially large impact on the
fund's performance.
The fund will engage in short-term trading, which could produce higher brokerage
costs and taxable distributions and lower the fund's after-tax performance
accordingly.
The fund can buy securities with borrowed money (a form of leverage), which
could magnify the fund's gains or losses.
The Fund has agreed to pay its investment adviser a performance fee based on the
fund's performance compared to that of the NASDAQ Composite Index. As
described below, the fund could pay the maximum management fee even though both
the fund's share price and the Index decline.
<PAGE>
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[ICON] PAST PERFORMANCE
As a new fund, past performance information is not available for the fund as of
the date of this prospectus.
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[LEFT SIDE BAR]
WHAT THIS FUND IS AND ISN'T
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
<PAGE>
An investment in the fund is not a bank deposit. It is not insured or guaranteed
by the FDIC or any other government agency. It is not a complete investment
program. You could lose money in this fund, but you also have the potential to
make money.
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<PAGE>
[ICON] EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the table below.
<TABLE>
<CAPTION>
FEE TABLE
CLASS A CLASS B CLASS C CLASS T
------- ------- ------- -------
Shareholder transaction fees
(FEES PAID FROM YOUR ACCOUNT)
<S> <C> <C> <C> <C>
Maximum front-end sales charge on 5.75 none none 4.50
purchases (AS A % OF OFFERING PRICE)
Maximum contingent deferred sales charge 0.00* 4.00 1.00 0.00*
(CDSC) (AS A % OF PURCHASE OR SALE PRICE,
WHICHEVER IS LESS)
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* Shares bought without an initial sales charge as part of an investment of $1
million or more or, for Class A, through a "wrap account" or similar program,
as described in the Statement of Additional Information, may be charged a
CDSC of 1% if sold within one year.
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS T
------- ------- ------- --------
Annual fund operating expenses (EXPENSES PAID
FROM FUND ASSETS)
% OF AVERAGE DAILY NET ASSETS
<S> <C> <C> <C> <C>
Management fees* 1.50 1.50 1.50 1.50
12b-1 fee None 0.75 0.75 0.25
Shareholder services fee 0.25 0.25 0.25 0.25
Other expenses 0.25 0.25 0.25 0.25
- --------------------------------------------------------------------------------------------------------------------
TOTAL 2.00 2.75 2.75 2.25
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* The basic management fee is 1.50% but, after the fund's first year of
operations, it may vary from 0.50% to 2.50% depending on the fund's
performance compared to the NASDAQ Composite Index.
</TABLE>
EXPENSE EXAMPLE
1 YEAR 3 YEARS
CLASS A $766 $1,166
CLASS B
WITH REDEMPTION $678 $1,153
WITHOUT REDEMPTION $278 $ 853
CLASS C
WITH REDEMPTION $378 $ 853
WITHOUT REDEMPTION $278 $ 853
CLASS T $668 $1,122
This example shows what an investor could pay in expenses over time. It uses the
same hypothetical conditions other funds use in their prospectuses: $10,000
initial investment, 5% total return each year and no changes in expenses.
Because actual return and expenses will be different, the example is for
comparison only.
- --------------------------------------------------------------------------------
[LEFT SIDE BAR]
CONCEPTS TO UNDERSTAND
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of the fund's operations.
RULE 12B-1 FEE: the fee paid to the fund's distributor to finance the sale and
distribution of Class B, C and T shares. Because this fee is paid out of the
fund's assets on an on-going basis, over time it will increase the cost of your
investment and may cost you more than paying other types of sales charges.
SHAREHOLDER SERVICES FEE: the fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: estimated fees to be paid by the fund for the current fiscal
year for miscellaneous items such as transfer agency, custody, professional and
registration fees.
<PAGE>
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[ICON] MANAGEMENT
The fund's investment adviser is The Dreyfus Corporation, 200 Park Avenue, New
York, New York 10166. Founded in 1947, Dreyfus manages more than $127 billion in
over 160 mutual fund portfolios. Dreyfus is the primary mutual fund business of
Mellon Financial Corporation, a global financial services company with
approximately $2.5 trillion of assets under management, administration or
custody, including approximately $485 billion under management. Mellon provides
wealth management, global investment services and a comprehensive array of
banking services for individuals, businesses and institutions. Mellon is
headquartered in Pittsburgh, Pennsylvania.
The fund has agreed to pay Dreyfus a performance-based fee (the basic fee), so
that if the fund's performance is greater than that of the NASDAQ Composite
Index (the NASDAQ) Dreyfus earns more and if it is less than that of the NASDAQ
Dreyfus earns less. For the first year after the fund begins its operations, the
fee is fixed at 1.50% and does not have a performance adjustment. After that, if
the performance of the class of shares expected to bear the highest total fund
operating expenses (the measuring class) exceeds the NASDAQ, Dreyfus will get
paid up to 1% more each year (and could get paid up to 1% less if performance
lags). The minimum annual management fee payable to Dreyfus is 0.50% of the
fund's average daily net assets. The table below shows what the adjustments
could be.
PERCENTAGE POINT DIFFERENCE*
BETWEEN PERFORMANCE OF THE
MEASURING CLASS SHARES AND THE ADJUSTMENT TO 1.50% ANNUAL FEE RATE
NASDAQ** BASIC FEE AS ADJUSTED
------------------------------ ------------------- ---------------
+8 +1.00% 2.50%
+7 +.875% 2.375%
+6 +.75% 2.25%
+5 +.625% 2.125%
+4 +.50% 2.00%
+3 +.375% 1.875%
+2 +.25% 1.75%
+1 +.125% 1.625%
0 0 1.50%
-1 -.125% 1.375%
-2 -.25% 1.25%
-3 -.375% 1.125%
-4 -.50% 1.00%
-5 -.625% .875%
-6 -.75% .75%
-7 -.875% .625%
-8 -1.00% .50%
- --------------------------------
* Fractions of a percentage point will be rounded to the nearer whole point (to
the higher whole point if exactly one-half).
** Measured over the performance period, which, beginning twelve months after
the fund has commenced operations, will be the period from July 1, 2000
to the most recent month-end until June 30, 2003, at which time the
performance period will become a rolling 36-month period ending with the most
recent calendar month. During the first twelve months of operations, the fund
will pay Dreyfus the basic fee of 1.50% of the fund's average daily net
assets with no performance adjustment.
Since the adjustment to the basic fee is based on the comparative performance of
the measuring class shares against the NASDAQ, the controlling factor is not
whether the performance of the measuring class shares is up or down, but whether
that performance is up or down more than or less than that of the NASDAQ. In
addition, the relative performance of the measuring class shares against the
NASDAQ is measured only for the relevant performance period, and does not take
into account performance over longer or shorter periods of time.
The fund's primary portfolio manager is Mark Herskovitz. He has been employed by
Dreyfus since 1996. Before joining Dreyfus, Mr. Herskovitz served as the senior
technology analyst at National City Bank.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, Dreyfus
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
with a distinct, stable identity.
The fund, Dreyfus and Dreyfus Service Corporation (the fund's distributor) each
have adopted a code of ethics that permits its personnel, subject to such code,
to invest in securities, including securities that may be purchased or held by
the fund. The Dreyfus code of ethics restricts the personal securities
transactions of its employees, and requires portfolio managers and other
investment personnel to comply with the code's preclearance and disclosure
procedures. Its primary purpose is to ensure that personal trading by Dreyfus
employees does not disadvantage any Dreyfus-managed fund.
[LEFT SIDE BAR]
CONCEPT TO UNDERSTAND
NASDAQ COMPOSITE INDEX:
The NASDAQ Composite Index measures all NASDAQ stocks listed on the NASDAQ Stock
Market, Inc. It is a broad-based market-value weighted index and includes over
5,000 domestic and foreign companies.
<PAGE>
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[ICON] FINANCIAL HIGHLIGHTS
As a new fund, financial highlights information is not available for the fund as
of the date of this prospectus.
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<PAGE>
YOUR INVESTMENT
[ICON] ACCOUNT POLICIES
The DREYFUS PREMIER FUNDS are designed primarily for people who are investing
through a third party, such as a bank, broker-dealer or financial adviser, or in
a 401(k) or other retirement plan. Third parties with whom you open a fund
account may impose policies, limitations and fees which are different from those
described here.
YOU WILL NEED TO CHOOSE A SHARE CLASS before making your initial investment. In
making your choice, you should weigh the impact of all potential costs over the
length of your investment, including sales charges and annual fees. For example,
in some cases, it may be more economical to pay an initial sales charge than to
choose a class with no initial sales charge but higher annual fees and a
contingent deferred sales charge (CDSC).
o CLASS A shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares,
want to take advantage of the reduced sales charges available on larger
investments and/or have a longer-term investment horizon
o CLASS B shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work
immediately and/or have a longer-term investment horizon
o CLASS C shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work
immediately and/or have a shorter-term investment horizon
o CLASS T shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares,
want to take advantage of the reduced sales charges available on larger
investments and have a shorter-term investment horizon
Your financial representative can help you choose the share class that is
appropriate for you.
[LEFT SIDE BAR]
REDUCED CLASS A AND CLASS T SALES CHARGE
LETTER OF INTENT: lets you purchase Class A and Class T shares over a 13-month
period and receive the same sales charge as if all shares had been purchased at
once.
RIGHT OF ACCUMULATION: lets you add the value of any shares you own in this fund
or any other Dreyfus Premier fund, any other fund that is advised by Founders
Asset Management LLC ("Founders"), an affiliate of Dreyfus, sold with a sales
load, to the amount of your next Class A or Class T investment for purposes of
calculating the sales charge.
CONSULT THE STATEMENT OF ADDITIONAL INFORMATION (SAI) OR YOUR FINANCIAL
REPRESENTATIVE FOR MORE DETAILS.
<PAGE>
SHARE CLASS CHARGES
Each share class has its own fee structure. In some cases, you may not have to
pay or may qualify for a reduced sales charge to buy or sell shares. Consult
your financial representative or refer to the SAI to see if this may apply to
you. Because Class A has lower expenses than Class T, if you invest $1 million
or more in the fund, you should consider buying Class A shares.
SALES CHARGES
CLASS A AND CLASS T - CHARGED WHEN YOU BUY SHARES
<TABLE>
<CAPTION>
SALES CHARGE DEDUCTED AS A SALES CHARGE AS A % OF
YOUR INVESTMENT % OF OFFERING PRICE YOUR NET INVESTMENT
- --------------- ------------------------------- -------------------
CLASS A CLASS T CLASS A CLASS T
------- ------- ------- -------
<S> <C> <C> <C> <C>
Up to $49,000 5.75% 4.50% 6.10% 4.70%
$50,000-$99,999 4.50% 4.00% 4.70% 4.20%
$100,000-$249,999 3.50% 3.00% 3.60% 3.30%
$250,000-$499,999 2.50% 2.00% 2.60% 2.00%
$500,000-$999,999 2.00% 1.50% 2.00% 1.50%
$1,000,000 or more* 0.00% 0.00% 0.00% 0.00%
- -------------
* A 1.00% CDSC may be charged on any shares sold within one year of purchase
(except shares bought through dividend reinvestment). In addition, a
1.00% CDSC may be charged on Class A shares purchased without an initial
sales charge through a "wrap account" or similar program and sold within one
year of purchase.
</TABLE>
Class T shares also carry an annual Rule 12b-1 fee of 0.25% of the class's
average daily net assets.
CLASS B - CHARGED WHEN YOU SELL SHARES
CDSC AS A % OF YOUR INITIAL
INVESTMENT OR YOUR REDEMPTION
YEARS SINCE PURCHASE WAS MADE (WHICHEVER IS LESS)
- ----------------------------- ----------------------------
up to 2 years 4.00%
2-4 years 3.00%
4-5 years 2.00%
5-6 years 1.00%
More than 6 years Shares will automatically convert to
Class A
Class B shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
- -----------------------------
CLASS C - CHARGED WHEN YOU SELL SHARES
A 1.00% CDSC is imposed on redemptions made within the first year of purchase.
Class C shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
- -----------------------------
BUYING SHARES
THE NET ASSET VALUE (NAV) of each class is generally calculated as of the close
of trading on the New York Stock Exchange (NYSE) (usually 4:00 p.m. Eastern
time) every day the exchange is open. Your order will be priced at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. The fund's investments are generally valued based on market
value or, where market quotations are not readily available, based on fair value
as determined in good faith by the fund's board.
ORDERS TO BUY AND SELL SHARES RECEIVED BY DEALERS by the close of trading on the
NYSE and transmitted to the distributor or its designee by the close of its
business day (normally 5:15 p.m. Eastern time) will be based on the NAV
determined as of the close of trading on the NYSE that day.
-----------------------------
<PAGE>
MINIMUM INVESTMENTS
Initial Additional
- --------------------------------------------------------------------------------
Regular accounts $10,000 $100
$500
FOR TELETRANSFER INVESTMENTS
Traditional IRAs $750 no minimum
Spousal IRAs $750 no minimum
Roth IRAs $750 no minimum
Education IRAs $500 no minimum
AFTER THE FIRST YEAR
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
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[LEFT SIDE BAR]
CONCEPTS TO UNDERSTAND
NET ASSET VALUE (NAV): the market value of one share, computed by dividing the
total net assets of a fund or class by its shares outstanding. The fund's Class
A and Class T shares are offered to the public at NAV plus a sales charge.
Classes B and C are offered at NAV, but generally are subject to higher annual
operating expenses and a CDSC.
<PAGE>
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SELLING SHARES
YOU MAY SELL (REDEEM) SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
TO KEEP YOUR CDSC AS LOW AS POSSIBLE, each time you request to sell shares we
will first sell shares that are not subject to a CDSC, and then those subject to
the lowest charge. The CDSC is based on the lesser of the original purchase cost
or the current market value of the shares being sold, and is not charged on
shares you acquired by reinvesting your dividends. There are certain instances
when you may qualify to have the CDSC waived. Consult your financial
representative or the SAI for details.
BEFORE SELLING RECENTLY PURCHASED SHARES, please note that if the fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to eight business days or until it has collected payment.
[RIGHT SIDE BAR]
WRITTEN SELL ORDERS
Some circumstances require written sell orders along with signature guarantees.
These include:
o amounts of $10,000 or more on accounts whose address has been
changed within the last 30 days
o requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
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<PAGE>
GENERAL POLICIES
UNLESS YOU DECLINE TELEPHONE PRIVILEGES ON YOUR APPLICATION, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
THE FUND RESERVES THE RIGHT TO:
o refuse any purchase or exchange request that could adversely
affect the fund or its operations, including those from any
individual or group who, in the fund's view, is likely to engage
in excessive trading (usually defined as more than four exchanges
out of the fund within a calendar year)
o refuse any purchase or exchange request in excess of 1% of the
fund's total assets
o change or discontinue its exchange privilege, or temporarily
suspend this privilege during unusual market conditions
o change its minimum investment amounts
o delay sending out redemption proceeds for up to seven days
(generally applies only in cases of very large redemptions,
excessive trading or during unusual market conditions)
The fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
[LEFT SIDE BAR]
SMALL ACCOUNT POLICIES
To offset the relatively higher costs of servicing smaller accounts, the fund
charges regular accounts with balances below $2,000 an annual fee of $12. The
fee will be imposed during the fourth quarter of each calendar year.
The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; IRA accounts; accounts participating in
automatic investment programs; and accounts opened through a financial
institution.
If your account falls below $500, the fund may ask you to increase your balance.
If it is still below $500 after 30 days, the fund may close your account and
send you the proceeds.
<PAGE>
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[ICON] DISTRIBUTIONS AND TAXES
THE FUND USUALLY PAYS ITS SHAREHOLDERS dividends from its net investment income,
and distributes any net capital gains it has realized once a year. Each share
class will generate a different dividend because each has different expenses.
Your distributions will be reinvested in the fund unless you instruct the fund
otherwise. There are no fees or sales charges on reinvestments.
FUND DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE to most investors (unless your
investment is in an IRA or other tax-deferred account). The tax status of any
distribution is the same regardless of how long you have been in the fund and
whether you reinvest your distributions or take them in cash. In general,
distributions are federally taxable as follows:
- ----------------------------------
<TABLE>
<CAPTION>
TAXABILITY OF DISTRIBUTIONS
Tax rate for Tax rate for
Type of distribution 15% bracket 28% bracket or above
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Income dividends Ordinary income rate Ordinary income rate
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains 10% 20%
</TABLE>
- ----------------------------------
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
[RIGHT SIDE BAR]
TAXES ON TRANSACTIONS
Except for tax-deferred accounts, any sale or exchange of fund shares may
generate a tax liability. Of course, withdrawals or distributions from
tax-deferred accounts are taxable when received.
The table at the left also can provide a guide for potential tax liability when
selling or exchanging fund shares. "Short-term capital gains" applies to fund
shares sold or exchanged up to 12 months after buying them. "Long-term capital
gains" applies to shares sold or exchanged after 12 months.
<PAGE>
[ICON] SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASED fund shares may impose different
restrictions on these services and privileges offered by the fund, or may not
make them available at all.
Consult your financial representative for more information on the availability
of these services and privileges.
AUTOMATIC SERVICES
BUYING OR SELLING SHARES AUTOMATICALLY is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application, or by
calling your financial representative or 1-800-554-4611.
FOR INVESTING
DREYFUS AUTOMATIC ASSET For making automatic investments from a
BUILDER(R) designated bank account.
DREYFUS PAYROLL SAVINGS PLAN For making
automatic investments through a payroll
deduction.
DREYFUS GOVERNMENT DIRECT For making automatic investments from your
DEPOSIT PRIVILEGE federal employment, Social Security or other
regular federal government check.
DREYFUS DIVIDEND SWEEP For automatically
reinvesting the dividends and distributions
from the fund into another Dreyfus fund or
certain Founders-advised funds (not available
for IRAs).
FOR EXCHANGING SHARES
DREYFUS AUTO-EXCHANGE For making regular exchanges from the fund
PRIVILEGE into another Dreyfus fund or certain
Founders-advised funds.
FOR SELLING SHARES
DREYFUS AUTOMATIC For making regular withdrawals from most
WITHDRAWAL PLAN Dreyfus funds. There will be no CDSC on
Class B shares, as long as the amounts
withdrawn do not exceed 12% annually of the
account value at the time the shareholder
elects to participate in the plan.
<PAGE>
EXCHANGE PRIVILEGE
YOU CAN EXCHANGE SHARES WORTH $500 OR MORE (no minimum for retirement accounts)
from one class of the fund into the same class of another Dreyfus Premier fund
or Founders-advised fund. You can also exchange Class T shares into Class A
shares of certain Dreyfus Premier fixed-income funds. You can request your
exchange by contacting your financial representative. Be sure to read the
current prospectus for any fund into which you are exchanging before investing.
Any new account established through an exchange will generally have the same
privileges as your original account (as long as they are available). There is
currently no fee for exchanges, although you may be charged a sales load when
exchanging into any fund that has a higher one.
TELETRANSFER PRIVILEGE
TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the TeleTransfer privilege. You can set up TeleTransfer on your
account by providing bank account information and following the instructions on
your application, or contact your financial representative.
REINVESTMENT PRIVILEGE
UPON WRITTEN REQUEST, YOU CAN REINVEST up to the number of Class A, B or T
shares you redeemed within 45 days of selling them at the current share price
without any sales charge. If you paid a CDSC, it will be credited back to your
account. This privilege may be used only once.
ACCOUNT STATEMENTS
EVERY FUND INVESTOR automatically receives regular account statements. You'll
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
<PAGE>
----------------------------------
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
[ICON] IN WRITING
Complete the application.
Mail your application and a check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
[ICON] BY TELEPHONE
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
o ABA# 021000018
o DDA# 8900404116
o the fund name
o the share class
o your Social Security or tax ID number
o name(s) of investor(s)
o dealer number if applicable
Call us to obtain an account number.
Return your application with the account number on the application.
[ICON] AUTOMATICALLY
WITH AN INITIAL INVESTMENT Indicate on your application which automatic
service(s) you want. Return your application with your investment.
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
o ABA #021000018
o DDA #8900404116
o the fund name
o the share class
o your account number
o name(s) of investor(s)
o dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials.
TO SELL SHARES
Write a letter of instruction that includes:
o your name(s) and signature(s)
o your account number
o the fund name
o the dollar amount you want to sell
o the share class
o how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see page 10).
Mail your request to:
The Dreyfus Family of Funds
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
TELETRANSFER Call us or your financial representative to request your
transaction. Be sure the fund has your bank account information on file.
Proceeds will be sent to your bank by electronic check.
AUTOMATIC WITHDRAWAL PLAN Call us or your financial representative to request a
form to add the plan. Complete the form, specifying the amount and frequency of
withdrawals you would like.
Be sure to maintain an account balance of $5,000 or more.
[LEFT SIDE BAR]
To open an account, make subsequent investments or to sell shares, please
contact your financial representative or call toll free in the U.S.
1-800-554-4611
Make checks payable to:
THE DREYFUS FAMILY OF FUNDS
[RIGHT SIDE BAR]
CONCEPTS TO UNDERSTAND
WIRE TRANSFER: for transferring money from one financial institution to another.
Wiring is the fastest way to move money, although your bank may charge a fee to
send or receive wire transfers. Wire redemptions from the fund are subject to a
$1,000 minimum.
ELECTRONIC CHECK: for transferring money out of a bank account. Your transaction
is entered electronically, but may take up to eight business days to clear.
Electronic checks usually are available without a fee at all Automated Clearing
House (ACH) banks.
----------------------------------
<PAGE>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
[ICON] IN WRITING
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
[ICON] BY TELEPHONE
---- ----
[ICON] AUTOMATICALLY
---- ----
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail the slip and the check to:
The Dreyfus Trust Company, Custodian
P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
o ABA #021000018
o DDA #8900404116
o the fund name
o the share class
o your account number
o name of investor
o the contribution year
o dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
<PAGE>
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials. All contributions
will count as current year.
TO SELL SHARES
Write a letter of instruction that includes:
o your name and signature
o your account number
o the fund name
o the dollar amount you want to sell
o the share class
o how and where to send the proceeds
o whether the distribution is qualified or premature
o whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see page 10).
Mail your request to:
The Dreyfus Trust Company
P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
SYSTEMATIC WITHDRAWAL PLAN Call us to request instructions to establish the
plan.
[RIGHT SIDE BAR]
For information and assistance, contact your financial representative or call
toll free in the U.S.
1-800-554-4611
Make checks payable to:
THE DREYFUS TRUST COMPANY, CUSTODIAN
----------------------------------
<PAGE>
FOR MORE INFORMATION
DREYFUS PREMIER NEXTECH FUND
A SERIES OF DREYFUS PREMIER OPPORTUNITY FUNDS
- ---------------------------------------------
SEC file number: 811-9891
More information on this fund is available free upon request, including the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Provides more details about the fund and its policies. A current SAI is on
file with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
[LEFT SIDE BAR]
TO OBTAIN INFORMATION:
---------------------
BY TELEPHONE
Call your financia1 representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
Attn: Institutional Servicing
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of certain fund documents can be
viewed online or downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room
in Washington, DC (for information, call 1-202-942-8090) or, after
paying a duplicating fee, by E-mail request to [email protected], or
by writing to the SEC's Public Reference Section, Washington, DC
20549-0102.
(C) 2000, Dreyfus Service Corporation
<PAGE>
[GRAPHIC OMITTED]
May 24, 2000
DREYFUS PREMIER NEXTECH FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED
MAY 24, 2000
INITIAL OFFERING PERIOD
The Fund is offering its shares during an initial offering period
which is currently scheduled to end on the earlier of June 23, 2000 or when the
Fund reasonably believes that it has orders or commitments to purchase in the
aggregate approximately $1 billion in Fund shares. During the initial offering
period, Fund shares will be offered to the public at their initial net asset
value of $12.50 per share, plus any applicable sales charge. The maximum
offering price of Class A and Class T shares during the initial offering period,
therefore, is $13.26 and $13.09, respectively. The Fund will begin to
continuously offer its shares on June 26, 2000, unless it has approximately $1
billion or more in assets, in which case, the Fund will be closed to new
investors. If you submit an order to purchase Fund shares before the end of the
initial offering period, your investment will be held in a special account in
Dreyfus Municipal Money Market Fund until June 23, 2000. At that time, your
investment (including any dividends) will be automatically exchanged from
Dreyfus Municipal Money Market Fund to the Fund. If you already have an account
with Dreyfus Municipal Money Market Fund, a new account will be established for
you temporarily for your Fund investment. Since such accounts opened in Dreyfus
Municipal Money Market Fund will be temporary, they will not have checkwriting
privileges or certain other investor privileges offered typically by Dreyfus
Municipal Money Market Fund. If you submit an order to purchase Fund shares
before the end of the initial offering period and later decide you do not want
to invest in the Fund, you must contact the Fund before June 23, 2000 to stop
the exchange of your investment from Dreyfus Municipal Money Market Fund to the
Fund.
The minimum initial investment for fund shares is $10,000. You may
submit an order to purchase Fund shares before the end of the initial offering
period in writing by check, together with the Account Application, or by
telephone requesting an exchange from a Dreyfus money market fund in which you
own shares (other than shares held in an Exchange Account). Requests to exchange
from other Dreyfus funds will not be accepted. In each case, you must indicate
the Class of Fund shares you wish to purchase.
If your purchase order for Fund shares is not received before the end
of the initial offering period or if you fail to indicate the Class of fund
shares you wish to purchase, your order will not be accepted and your check will
be returned to you unless the Fund receives further instructions from you.
The Fund's Distributor, from its own funds, may pay dealers a fee of
up to 1% of the amount invested through such dealers in Fund shares during the
initial offering period.
<PAGE>
May 24, 2000
DREYFUS PREMIER NEXTECH FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 24, 2000
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION CONTAINED IN THE
SECTION OF THE FUND'S STATEMENT OF ADDITIONAL INFORMATION ENTITLED "SHAREHOLDER
SERVICES - AUTOMATIC WITHDRAWAL PLAN."
CLASS B SHARES - DREYFUS AUTOMATIC WITHDRAWAL PLAN
For any Fund account opened on or after July 24, 2000, or any existing Fund
account to which the Dreyfus Automatic Withdrawal Plan ("AWP") is added on or
after July 24, 2000, there will be no CDSC on Class B shares redeemed pursuant
to an AWP withdrawal, as long as the amount of the withdrawal does not exceed an
annual rate of 12% of the greater of the account value at the time of the first
withdrawal under the AWP, or the account value at the time of the subsequent
withdrawal. Withdrawals with respect to Class B shares under the AWP that exceed
such amounts will be subject to a CDSC.
<PAGE>
DREYFUS PREMIER OPPORTUNITY FUNDS
DREYFUS PREMIER NEXTECH FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 24, 2000
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Premier NexTech Fund (the "Fund"), dated May 24, 2000, of Dreyfus
Premier Opportunity Funds (the "Company"), as it may be revised from time to
time. To obtain a copy of the Prospectus for the Fund, please call
1-800-554-4611.
TABLE OF CONTENTS
PAGE
Description of the Company and Fund........................................B-2
Management of the Company.................................................B-14
Management Arrangements...................................................B-17
How To Buy Shares.........................................................B-22
Distribution Plan and Shareholder Services Plan...........................B-29
How to Redeem Shares......................................................B-31
Shareholder Services......................................................B-35
Determination of Net Asset Value..........................................B-40
Dividends, Distributions and Taxes........................................B-41
Portfolio Transactions....................................................B-44
Performance Information...................................................B-45
Information About the Company and Fund....................................B-46
Counsel and Independent Auditors..........................................B-48
Year 2000 Issues..........................................................B-48
Appendix..................................................................B-49
Financial Statements and Report of Independent Auditors...................B-56
<PAGE>
The information in this Statement of Additional Information is not complete and
may be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.
<PAGE>
DESCRIPTION OF THE COMPANY AND FUND
The Company is a Massachusetts business trust organized on April 13,
2000, and has not commenced operations as of the date hereof. The Fund is a
separate series of the Company, an open-end management investment company, known
as a mutual fund.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor") is the distributor of
the Fund's shares.
CERTAIN PORTFOLIO SECURITIES
The following information supplements and should be read in
conjunction with the Fund's Prospectus.
CONVERTIBLE SECURITIES. Convertible securities may be converted at
either a stated price or stated rate into underlying shares of common stock.
Convertible securities have characteristics similar to both fixed-income and
equity securities. Convertible securities generally are subordinated to other
similar but non-convertible securities of the same issuer, although convertible
bonds, as corporate debt obligations, enjoy seniority in right of payment to all
equity securities, and convertible preferred stock is senior to common stock, of
the same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities.
Although to a lesser extent than with fixed-income securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the underlying
common stock. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis, and so may not experience market value
declines to the same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of the convertible
securities tend to rise as a reflection of the value of the underlying common
stock. While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in common
stock of the same issuer.
Convertible securities provide for a stable stream of income with
generally higher yields than common stocks, but there can be no assurance of
current income because the issuers of the convertible securities may default on
their obligations. A convertible security, in addition to providing fixed
income, offers the potential for capital appreciation through the conversion
feature, which enables the holder to benefit from increases in the market price
of the underlying common stock. There can be no assurance of capital
appreciation, however, because securities prices fluctuate. Convertible
securities generally offer lower interest or dividend yields than non-
convertible securities of similar quality because of the potential for capital
appreciation.
DEPOSITARY RECEIPTS. The Fund may invest in the securities of foreign issuers in
the form of American Depositary Receipts and American Depositary Shares
(collectively, "ADRs") and Global Depositary Receipts and Global Depositary
Shares (collectively, "GDRs") and other forms of depositary receipts. These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts typically issued
by a United States bank or trust company which evidence ownership of underlying
securities issued by a foreign corporation. GDRs are receipts issued outside the
United States typically by non-United States banks and trust companies that
evidence ownership of either foreign or domestic securities. Generally, ADRs in
registered form are designed for use in the United States securities markets and
GDRs in bearer form are designed for use outside the United States.
These securities may be purchased through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of the
underlying security and a depositary. A depositary may establish an unsponsored
facility without participation by the issuer of the deposited security. Holders
of unsponsored depositary receipts generally bear all the costs of such
facilities, and the depositary of an unsponsored facility frequently is under no
obligation to distribute shareholder communications received from the issuer of
the deposited security or to pass through voting rights to the holders of such
receipts in respect of the deposited securities.
WARRANTS. A warrant gives the holder the right to subscribe to a
specified amount of the issuing corporation's capital stock at a set price for a
specified period of time. The Fund may invest up to 5% of its net assets in
warrants, except that this limitation does not apply to warrants purchased by
the Fund that are sold in units with, or attached to, other securities.
INVESTMENT COMPANIES. The Fund may invest in securities issued by
registered and unregistered investment companies. Under the Investment Company
Act of 1940, as amended (the "1940 Act"), the Fund's investment in such
securities, subject to certain exceptions, currently is limited to (i) 3% of the
total voting stock of any one investment company, (ii) 5% of the Fund's total
assets with respect to any one investment company and (iii) 10% of the Fund's
total assets in the aggregate. Investments in the securities of other investment
companies may involve duplication of advisory fees and certain other expenses.
ILLIQUID SECURITIES. The Fund may invest up to 15% of the value of its
net assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment objective.
These securities may include securities that are not readily marketable, such as
securities that are subject to legal or contractual restrictions on resale,
repurchase agreements providing for settlement in more than seven days after
notice, and certain privately negotiated, non-exchange traded options and
securities used to cover such options. As to these securities, the Fund is
subject to a risk that should it desire to sell them when a ready buyer is not
available at a price the Fund deems representative of their value, the value of
the Fund's net assets could be adversely affected.
MONEY MARKET INSTRUMENTS. When the Manager determines that adverse
market conditions exist, the Fund may adopt a temporary defensive position and
invest up to 100% of its assets in money market instruments, including U.S.
Government securities, repurchase agreements, bank obligations and commercial
paper. The Fund also may purchase money market instruments when it has cash
reserves or in anticipation of taking a market position.
INVESTMENT TECHNIQUES
The following information supplements and should be read in
conjunction with the Fund's Prospectus.
FOREIGN CURRENCY TRANSACTIONS. The Fund may enter into foreign
currency transactions for a variety of purposes, including: to fix in U.S.
dollars, between trade and settlement date, the value of a security the Fund has
agreed to buy or sell; to hedge the U.S. dollar value of securities the Fund
already owns, particularly if it expects a decrease in the value of the currency
in which the foreign security is denominated; or to gain exposure to the foreign
currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, the Fund's
purchase of foreign currencies for U.S. dollars or the maintenance of short
positions in foreign currencies. A short position would involve the Fund
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the value of
the currency sold relative to the currency the Fund contracted to receive. The
Fund's success in these transactions will depend principally on the Manager's
ability to predict accurately the future exchange rates between foreign
currencies and the U.S. dollar.
Currency exchange rates may fluctuate significantly over short periods
of time. They generally are determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention, or failure to intervene, by U.S.
or foreign governments or central banks, or by currency controls or political
developments in the United States or abroad.
SHORT-SELLING. In these transactions, the Fund sells a security it
does not own in anticipation of a decline in the market value of the security.
To complete the transaction, the Fund must borrow the security to make delivery
to the buyer. The Fund is obligated to replace the security borrowed by
purchasing it subsequently at the market price at the time of replacement. The
price at such time may be more or less than the price at which the security was
sold by the Fund, which would result in a loss or gain, respectively.
Securities will not be sold short if, after effect is given to any
such short sale, the total market value of all securities sold short would
exceed 25% of the value of the Fund's net assets. The Fund may not make a short
sale which results in the Fund having sold short in the aggregate more than 5%
of the outstanding securities of any class of an issuer.
<PAGE>
The Fund also may make short sales "against the box," in which the
Fund enters into a short sale of a security it owns. At no time will more than
15% of the value of the Fund's net assets be in deposits on short sales against
the box.
Until the Fund closes its short position or replaces the borrowed
security, the Fund will: (a) segregate permissible liquid assets in an amount
that, together with the amount deposited with the broker as collateral, always
equals the current value of the security sold short; or (b) otherwise cover its
short position.
LEVERAGE. Leveraging (buying securities using borrowed money)
exaggerates the effect on net asset value of any increase or decrease in the
market value of the Fund's portfolio. These borrowings will be subject to
interest costs which may or may not be recovered by appreciation of the
securities purchased; in certain cases, interest costs may exceed the return
received on the securities purchased. For borrowings for investment purposes,
the 1940 Act requires the Fund to maintain continuous asset coverage (total
assets including borrowings, less liabilities exclusive of borrowings) of 300%
of the amount borrowed. If the required coverage should decline as a result of
market fluctuations or other reasons, the Fund may be required to sell some of
its portfolio holdings within three days to reduce the amount of its borrowings
and restore the 300% asset coverage, even though it may be disadvantageous from
an investment standpoint to sell securities at that time. The Fund also may be
required to maintain minimum average balances in connection with such borrowing
or pay a commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.
The Fund may enter into reverse repurchase agreements with banks,
broker/dealers or other financial institutions. This form of borrowing involves
the transfer by the Fund of an underlying debt instrument in return for cash
proceeds based on a percentage of the value of the security. The Fund retains
the right to receive interest and principal payments on the security. At an
agreed upon future date, the Fund repurchases the security at principal plus
accrued interest. As a result of these transactions, the Fund is exposed to
greater potential fluctuations in the value of its assets and its net asset
value per share. To the extent the Fund enters into a reverse repurchase
agreement, it will segregate permissible liquid assets at least equal to the
aggregate amount of its reverse repurchase obligations, plus accrued interest,
in certain cases, in accordance with releases promulgated by the Securities and
Exchange Commission. The Securities and Exchange Commission views reverse
repurchase transactions as collateralized borrowings by the Fund. Except for
these transactions, the Fund's borrowings generally will be unsecured.
DERIVATIVES. The Fund may invest in, or enter into, derivatives, such
as options and futures, for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Fund to invest than
"traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular derivative and the
portfolio as a whole. Derivatives permit the Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities. However, derivatives may entail investment
exposures that are greater than their cost would suggest, meaning that a small
investment in derivatives could have a large potential impact on the Fund's
performance.
If the Fund invests in derivatives at inopportune times or judges
market conditions incorrectly, such investments may lower the Fund's return or
result in a loss. The Fund also could experience losses if its derivatives were
poorly correlated with its other investments, or if the Fund were unable to
liquidate its position because of an illiquid secondary market. The market for
many derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
derivatives.
Although the Fund will not be a commodity pool, certain derivatives
subject the Fund to the rules of the Commodity Futures Trading Commission which
limit the extent to which the Fund can invest in such derivatives. The Fund may
invest in futures contracts and options on futures contacts for hedging purposes
without limit. However, the Fund may not invest in such contracts and options
for other purposes if the sum of the amount of initial margin deposits and
premiums paid for unexpired options with respect to such contracts, other than
for bona fide hedging purposes, exceeds 5% of the liquidation value of the
Fund's assets, after taking into account unrealized profits and unrealized
losses on such contracts and options; provided, however, that in the case of an
option that is in-the-money at the time of purchase, the in-the-money amount
may be excluded in calculating the 5% limitation.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter derivatives.
Exchange-traded derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such derivatives. This guarantee usually
is supported by a daily variation margin system operated by the clearing agency
in order to reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated with
derivatives purchased on an exchange. In contrast, no clearing agency guarantees
over-the-counter derivatives. Therefore, each party to an over-the-counter
derivative bears the risk that the counterparty will default. Accordingly, the
Manager will consider the creditworthiness of counterparties to over-the-
counter derivatives in the same manner as it would review the credit quality of
a security to be purchased by the Fund. Over-the-counter derivatives are less
liquid than exchange-traded derivatives since the other party to the transaction
may be the only investor with sufficient understanding of the derivative to be
interested in bidding for it.
FUTURES TRANSACTIONS--IN GENERAL. The Fund may enter into futures
contracts in U.S. domestic markets or, if applicable, on exchanges located
outside the United States. Foreign markets may offer advantages such as trading
opportunities or arbitrage possibilities not available in the United States.
Foreign markets, however, may have greater risk potential than domestic markets.
For example, some foreign exchanges are principal markets so that no common
clearing facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits the Fund might realize in
trading could be eliminated by adverse changes in the currency exchange rate, or
the Fund could incur losses as a result of those changes. Transactions on
foreign exchanges may include commodities which are traded on domestic exchanges
or those which are not. Unlike trading on domestic commodity exchanges, trading
on foreign commodity exchanges is not regulated by the Commodity Futures Trading
Commission.
Engaging in these transactions involves risk of loss to the Fund which
could adversely affect the value of the Fund's net assets. Although the Fund
intends to purchase or sell futures contracts only if there is an active market
for such contracts, no assurance can be given that a liquid market will exist
for any particular contract at any particular time. Many futures exchanges and
boards of trade limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price beyond that limit
or trading may be suspended for specified periods during the trading day.
Futures contract prices could move to the limit for several consecutive trading
days with little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses.
Successful use of futures by the Fund also is subject to the ability
of the Manager to predict correctly movements in the direction of the relevant
market and, to the extent the transaction is entered into for hedging purposes,
to ascertain the appropriate correlation between the securities being hedged and
the price movements of the futures contract. For example, if the Fund uses
futures to hedge against the possibility of a decline in the market value of
securities held in its portfolio and the prices of such securities instead
increase, the Fund will lose part or all of the benefit of the increased value
of securities which it has hedged because it will have offsetting losses in its
futures positions. Furthermore, if in such circumstances the Fund has
insufficient cash, it may have to sell securities to meet daily variation margin
requirements. The Fund may have to sell such securities at a time when it may be
disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, the Fund may be required to segregate permissible
liquid assets to cover its obligations relating to its transactions in
derivatives. To maintain this required cover, the Fund may have to sell
portfolio securities at disadvantageous prices or times since it may not be
possible to liquidate a derivative position at a reasonable price. In addition,
the segregation of such assets will have the effect of limiting the Fund's
ability otherwise to invest those assets.
SPECIFIC FUTURES TRANSACTIONS. The Fund may purchase and sell stock index
futures contracts. A stock index future obligates the Fund to pay or receive an
amount of cash equal to a fixed dollar amount specified in the futures contract
multiplied by the difference between the settlement price of the contract on the
contract's last trading day and the value of the index based on the stock prices
of the securities that comprise it at the opening of trading in such securities
on the next business day.
The Fund may purchase and sell interest rate futures contracts. An
interest rate future obligates the Fund to purchase or sell an amount of a
specific debt security at a future date at a specific price.
The Fund may purchase and sell currency futures. A foreign currency
future obligates the Fund to purchase or sell an amount of a specific currency
at a future date at a specific price.
OPTIONS--IN GENERAL. The Fund may purchase call and put options, and write (i.e.
sell) covered call and put option contracts. A call option gives the purchaser
of the option the right to buy, and obligates the writer to sell, the underlying
security or securities at the exercise price at any time during the option
period, or at a specific date. Conversely, a put option gives the purchaser of
the option the right to sell, and obligates the writer to buy, the underlying
security or securities at the exercise price at any time during the option
period, or at a specific date.
A covered call option written by the Fund is a call option with
respect to which the Fund owns the underlying security or otherwise covers the
transaction by segregating permissible liquid assets. A put option written by
the Fund is covered when, among other things, the Fund segregates permissible
liquid assets having a value equal to or greater than the exercise price of the
option to fulfill the obligation undertaken. The principal reason for writing
covered call and put options is to realize, through the receipt of premiums, a
greater return than would be realized on the underlying securities alone. The
Fund receives a premium from writing covered call or put options which it
retains whether or not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow, or other unforeseen events, at times have rendered
certain of the clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.
SPECIFIC OPTIONS TRANSACTIONS. The Fund may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or traded
in the over-the-counter market. An option on a stock index is similar to an
option in respect of specific securities, except that settlement does not occur
by delivery of the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than in the case of a call, or less than in the
case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.
The Fund may purchase and sell call and put options on foreign
currency. These options convey the right to buy or sell the underlying currency
at a price which is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.
The Fund may purchase cash-settled options on equity index swaps in
pursuit of its investment objective. Equity index swaps involve the exchange by
the Fund with another party of cash flows based upon the performance of an index
or a portion of an index of securities which usually includes dividends. A
cash-settled option on a swap gives the purchaser the right, but not the
obligation, in return for the premium paid, to receive an amount of cash equal
to the value of the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions from financial
institutions, including securities brokerage firms.
Successful use by the Fund of options will be subject to the Manager's
ability to predict correctly movements in the prices of individual stocks, the
stock market generally or foreign currencies. To the extent such predictions are
incorrect, the Fund may incur losses.
FUTURE DEVELOPMENTS. The Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts and
any other derivatives which are not presently contemplated for use by the Fund
or which are not currently available but which may be developed, to the extent
such opportunities are both consistent with the Fund's investment objective and
legally permissible for the Fund. Before entering into such transactions or
making any such investment, the Fund will provide appropriate disclosure in its
Prospectus or Statement of Additional Information.
LENDING PORTFOLIO SECURITIES. The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. In connection with such loans, the
Fund continues to be entitled to payments in amounts equal to the interest,
dividends or other distributions payable on the loaned securities, which affords
the Fund an opportunity to earn interest on the amount of the loan and on the
loaned securities' collateral. Loans of portfolio securities may not exceed
33-1/3% of the value of the Fund's total assets and the Fund will receive
collateral consisting of cash, U.S. Government securities or irrevocable letters
of credit which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. These loans are
terminable by the Fund at any time upon specified notice. The Fund might
experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Fund. In connection
with its securities lending transactions, the Fund may return to the borrower or
a third party which is unaffiliated with the Fund, and which is acting as a
"placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.
<PAGE>
FORWARD COMMITMENTS. The Fund may purchase or sell securities on a forward
commitment or when-issued basis, which means that delivery and payment take
place a number of days after the date of the commitment to purchase or sell. The
payment obligation and the interest rate receivable on a forward commitment or
when-issued security are fixed when the Fund enters into the commitment, but the
Fund does not make payment until it receives delivery from the counterparty. The
Fund will commit to purchase such securities only with the intention of actually
acquiring the securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable. The Fund will segregate permissible
liquid assets at least equal at all times to the amount of the Fund's purchase
commitments.
Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest rates
rise) based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates. Securities
purchased on a forward commitment or when-issued basis may expose the Fund to
risks because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery takes
place actually may be higher than that obtained in the transaction itself.
Purchasing securities on a forward commitment or when-issued basis when the Fund
is fully or almost fully invested may result in greater potential fluctuation in
the value of the Fund's net assets and its net asset value per share.
INVESTMENT CONSIDERATIONS AND RISKS
EQUITY SECURITIES. Equity securities, including common stock,
preferred stock, convertible securities and warrants, fluctuate in value, often
based on factors unrelated to the value of the issuer of the securities, and
such fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors.
The Fund invests in securities issued by companies in the technology
sector, which has been among the most volatile sectors of the stock market.
The Fund may purchase securities of small capitalization companies,
the prices of which may be subject to more abrupt or erratic market movements
than larger, more established companies. These securities typically are traded
in lower volume and the issuers typically are more subject to changes in
earnings and prospects.
The Fund will seek to purchase securities of companies in initial
public offerings or shortly thereafter. The prices of these companies'
securities may be very volatile, rising and falling rapidly based, among other
reasons, solely on investor perceptions rather than economic reasons.
The Fund may purchase securities of companies which have no earnings
or have experienced losses. The Fund generally will make these investments based
on a belief that actual anticipated products or services will produce future
earnings. If the anticipated event is delayed or does not occur, or if investor
perception about the company changes, the company's stock price may decline
sharply and its securities may become less liquid.
The Fund may invest in securities of venture capital companies, which
present all the risks of investment in small companies described above plus
certain additional risks. Venture capital companies represent highly speculative
investments by the Fund, because the concepts generally are unproven, the
companies have little or no track record, and the prospect of an initial public
offering is highly contingent upon factors that are often not in the companies'
control. For example, since venture capital companies do not file periodic
reports with the Securities and Exchange Commission, there is less publicly
available information about them than there is for other small companies, if
there is any at all. The Fund must therefore rely solely on the Manager to
obtain adequate information to evaluate the potential returns from investing in
these companies. In addition, venture capital companies tend to rely even more
heavily on the abilities of their key personnel than more mature companies do.
Competition for qualified personnel and high turnover of personnel are
particularly prevalent in venture capital technology companies. The loss of one
or a few key managers can substantially hinder or delay a venture capital
company's implementation of its business plan.
The Fund's ability to realize value from an investment in a venture
capital company is to a large degree dependent upon the successful completion of
the company's IPO or the sale of the venture capital company to another company,
which may not occur for a period of several years after the date of the Fund's
investment, if ever.
Venture capital funds involve all the risks of investing in small
companies and venture capital companies, plus certain additional risks. In
particular, the Fund must rely upon the judgment of the general partner or other
manager of a venture capital fund in selecting the companies in which the
venture capital fund invests and in deciding when to sell its investments. A
venture capital fund may employ a high degree of leverage, which can magnify any
losses incurred by its investors, including the Fund. A venture capital fund
will also require the Fund to pay management fees and/or performances fees or
allocations to its general partner or manager, which can reduce the return to
investors, including the Fund and its shareholders. These fees are in addition
to the management fee paid by the Fund. Investments in venture capital funds may
be highly illiquid. The Fund may not be able to dispose of a venture capital
fund holding when it wishes to, or may be able to do so only at a substantial
loss.
The Fund, together with other investment companies advised by the
Manager and its affiliates, may own significant positions in portfolio companies
which, depending on market conditions, may affect adversely the Fund's ability
to dispose of some or all of its positions should it desire to do so.
FOREIGN SECURITIES. Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some foreign
issuers are less liquid and more volatile than securities of comparable U.S.
issuers. Similarly, volume and liquidity in most foreign securities markets are
less than in the United States and, at times, volatility of price can be greater
than in the United States.
Because evidence of ownership of such securities usually are held
outside the United States, the Fund will be subject to additional risks which
include possible adverse political and economic developments, seizure or
nationalization of foreign deposits and adoption of governmental restrictions
which might adversely affect or restrict the payment of principal and interest
on the foreign securities to investors located outside the country of the
issuer, whether from currency blockage or otherwise. Moreover, foreign
securities held by the Fund may trade on days when the Fund does not calculate
its net asset value and thus affect the Fund's net asset value on days when
investors have no access to the Fund.
Developing countries have economic structures that are generally less
diverse and mature, and political systems that are less stable than those of
developed countries. The markets of developing countries may be more volatile
than the markets of more mature economies; however, such markets may provide
higher rates of return to investors. Many developing countries providing
investment opportunities for the Fund have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have adverse
effects on the economies and securities markets of certain of these countries.
Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates
and exchange control regulations.
SIMULTANEOUS INVESTMENTS. Investment decisions for the Fund are made
independently from those of the other investment companies advised by the
Manager. If, however, such other investment companies desire to invest in, or
dispose of, the same securities as the Fund, available investments or
opportunities for sales will be allocated equitably to each investment company.
In some cases, this procedure may adversely affect the size of the position
obtained for or disposed of by the Fund or the price paid or received by the
Fund.
INVESTMENT RESTRICTIONS
The Fund's investment objective is a fundamental policy, which cannot
be changed without approval by the holders of a majority (as defined in the 1940
Act) of the Fund's outstanding voting shares. In addition, the Fund has adopted
investment restrictions numbered 1 through 7 as fundamental policies. Investment
restrictions numbered 8 through 11 are not fundamental policies and may be
changed by a vote of a majority of the Company's Board members at any time. The
Fund may not:
1. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. For purposes of this Investment
Restriction, the technology sector in general is not considered an industry.
2. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
3. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). For purposes of this Investment Restriction, the entry
into options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices shall not constitute
borrowing.
4. Lend any securities or make loans to others, if, as a result, more
than 33-1/3% of its total assets would be lent to others, except that this
limitation does not apply to the purchase of debt obligations and the entry into
repurchase agreements. However, the Fund may lend its portfolio securities in an
amount not to exceed 33-1/3% of the value of its total assets. Any loans of
portfolio securities will be made according to guidelines established by the
Securities and Exchange Commission and the Company's Board.
5. Act as an underwriter of securities of other issuers, except to the
extent the Fund may be deemed an underwriter under the Securities Act of 1933,
as amended, by virtue of disposing of portfolio securities.
6. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 2, 4, 9 and 10 may be deemed to give rise to a senior security.
7. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts, futures
contracts, including those relating to indices, and options on futures contracts
or indices.
8. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
9. Purchase, sell or write puts, calls or combinations thereof, except
as described in the Fund's Prospectus and Statement of Additional Information.
10. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if, in
the aggregate, more than 15% of the value of the Fund's net assets would be so
invested.
11. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
MANAGEMENT OF THE COMPANY
The Company's Board is responsible for the management and supervision
of the Fund. The Board approves all significant agreements between the Company,
on behalf of the Fund, and those companies that furnish services to the Fund.
These companies are as follows:
The Dreyfus Corporation................................Investment Adviser
Dreyfus Service Corporation............................Distributor
Dreyfus Transfer, Inc..................................Transfer Agent
Mellon Bank, N.A.......................................Custodian
Board members and officers of the Company, together with information
as to their principal business occupations during at least the last five years,
are shown below.
BOARD MEMBERS OF THE COMPANY
JOSEPH S. DiMARTINO, CHAIRMAN OF THE BOARD. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He also is
a director of The Muscular Dystrophy Association, HealthPlan Services
Corporation, a provider of marketing, administrative and risk
management services to health and other benefit programs, Carlyle
Industries, Inc. (formerly, Belding Heminway Company, Inc.), a button
packager and distributor, Century Business Services, Inc. (formerly,
International Alliance Services, Inc.), a provider of various
outsourcing functions for small and medium sized companies, and
QuikCAT.com, Inc., a private company engaged in the development of
high speed movement, routing, storage and encryption of data across
cable, wireless and all other modes of data transport. For more than
five years prior to January 1995, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of the Distributor. From
August 1994 until December 31, 1994, he was a director of Mellon
Financial Corporation. He is 56 years old and his address is 200 Park
Avenue, New York, New York 10166.
CLIFFORD L. ALEXANDER, JR., BOARD MEMBER. Chairman of the Board and Chief
Investment Officer of The Dun & Bradstreet Corporation, and President
of Alexander & Associates, Inc., a management consulting firm. From
1977 to 1981, Mr. Alexander served as Secretary of the Army and
Chairman of the Board of the Panama Canal Company, and from 1975 to
1977, he was a member of the Washington, D.C. law firm of Verner,
Liipfert, Bernhard, McPherson and Alexander. He is a director of
American Home Products Corporation, IMS Health, a service provider of
marketing information and information technology, MCI WorldCom and
Mutual of America Life Insurance Company. He is 66 years old and his
address is 400 C Street, N.E., Washington, D.C. 20002.
LUCY WILSON BENSON, BOARD MEMBER. President of Benson and Associates,
consultants to business and government. Mrs. Benson is a director of
COMSAT Corporation and The International Executive Series. She is also
a Trustee of the Alfred P. Sloan Foundation, Vice Chairman of the
Board of Trustees of Lafayette College, Vice Chairman of the Citizens
Network for Foreign Affairs and of The Atlantic Council of the U.S.
and a member of the Council on Foreign Relations. From 1980 to 1994,
Mrs. Benson was a director of The Grumman Corporation and, from 1990
to 1998, she was a director of the General RE Corporation, and from
1987 to 1999, she was a director of Logistics Management Institute.
Mrs. Benson served as a consultant to the U.S. Department of State and
to SRI International from 1980 and 1981. From 1977 to 1980, she was
Under Secretary of State for Security Assistance, Science and
Technology. She is 72 years old and her address is 46 Sunset Avenue,
Amherst, Massachusetts 01002.
The Company has a standing nominating committee comprised of its Board
members who are not "interested persons" of the Company, as defined in the 1940
Act. The function of the nominating committee is to select and nominate all
candidates who are not "interested persons" of the Company for election to the
Company's Board.
The Company typically pays its Board members its allocated portion of
an annual retainer of $25,000 and a fee of $4,000 per meeting ($500 per
telephone meeting) attended for the company and four other funds in The Dreyfus
Family of Funds, and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board members,
if any, are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation estimated to be paid to each Board member by the Company (based on
estimated Fund assets of $1 billion) and by all funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set forth
in parenthesis next to each Board member's total compensation)* for the year
ending December 31, 2000, is as follows:
<TABLE>
<CAPTION>
Total Estimated
Compensation From
Aggregate Estimated the Company and
Compensation From Fund Complex Paid to
Name of Board Member the Company Board Member
- ------------------------------------------------------------------ ---------------------- ---------------------------
<S> <C> <C>
Joseph S. DiMartino........................................... $7,404 $755,000 (192)
Clifford S. Alexander......................................... $5,923 $127,500 (46)
Lucy Wilson Benson............................................ $5,923 $102,500 (32)
- ----------------------------
* Represents the number of separate portfolios comprising the investment
companies in the Fund complex, including the Fund, for which the Board
members serve.
</TABLE>
OFFICERS OF THE COMPANY
STEPHEN E. CANTER, PRESIDENT. President, Chief Operating Officer, Chief
Investment Officer and a director of the Manager, and an officer of other
investment companies advised and administered by the Manager. Mr. Canter
also is a Director and Executive Committee Member of the other investment
management subsidiaries of Mellon Financial Corporation, each of which is
an affiliate of the Manager. He is 54 years old.
MARK N. JACOBS, VICE PRESIDENT. Vice President, Secretary and General Counsel of
the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 54 years old.
JOSEPH CONNOLLY, VICE PRESIDENT AND TREASURER. Director - Mutual Fund Accounting
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 42 years old.
STEVEN F. NEWMAN, SECRETARY. Assistant Secretary and Associate General Counsel
of the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 50 years old.
MICHAEL A. ROSENBERG, ASSISTANT SECRETARY. Associate General Counsel of the
Manager, and an officer of other investment companies advised and
administered by the Manager. He is 40 years old.
JEFF PRUSNOFSKY, ASSISTANT SECRETARY. Assistant General Counsel of the Manager,
and an officer of other investment companies advised and administered by
the Manager. He is 35 years old.
JAMES WINDELS, ASSISTANT TREASURER. Senior Accounting Manager - Equity Funds of
the Manager, and an officer of other investment companies advised and
administered by the Manager. He is 41 years old.
The address of each officer of the Company is 200 Park Avenue, New
York, New York 10166.
MANAGEMENT ARRANGEMENTS
INVESTMENT ADVISER. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation
("Mellon"). Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international markets.
Mellon is among the 25 largest bank holding companies in the United States based
on total assets.
MANAGEMENT AGREEMENT. The Manager provides management services
pursuant to a Management Agreement (the "Agreement") between the Manager and the
Company. As to the Fund, the Agreement is subject to annual approval by (i) the
Company's Board or (ii) vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of the Fund, provided that in either event the
continuance also is approved by a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Company or the Manager,
by vote cast in person at a meeting called for the purpose of voting on such
approval. As to the Fund, the Agreement is terminable without penalty, on 60
days' notice, by the Company's Board or by vote of the holders of a majority of
the Fund's shares, or, on not less than 90 days' notice, by the Manager. The
Agreement will terminate automatically, as to the Fund, in the event of its
assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Christopher M. Condron, Chairman of the Board and Chief Executive Officer;
Stephen E. Canter, President, Chief Operating Officer, Chief Investment Officer
and a director; Thomas F. Eggers, Vice Chairman-Institutional and a director;
Lawrence S. Kash, Vice Chairman; Ronald P. O'Hanley III, Vice Chairman; J. David
Officer, Vice Chairman and a director; William T. Sandalls, Jr., Executive Vice
President; Stephen R. Byers, Senior Vice President; Mark N. Jacobs, Vice
President, General Counsel and Secretary; Diane P. Durnin, Vice
President-Product Development; Patrice M. Kozlowski, Vice President-Corporate
Communications; Mary Beth Leibig, Vice President-Human Resources; Ray Van Cott,
Vice President-Information Systems; Theodore A. Schachar, Vice President-Tax;
Wendy Strutt, Vice President; Richard Terres, Vice President; William H.
Maresca, Controller; James Bitetto, Assistant Secretary; Steven F. Newman,
Assistant Secretary; and Mandell L. Berman, Burton C. Borgelt, Steven G.
Elliott, Martin C. McGuinn, Richard W. Sabo and Richard F. Syron, directors.
The Manager manages the Fund's investments in accordance with the
stated policies of the Fund, subject to the approval of the Company's Board. The
Manager is responsible for investment decisions, and provides the Fund with
portfolio managers who are authorized by the Board to execute purchases and
sales of securities. The Fund's portfolio managers are Mark Herskovitz and Barry
Mills. The Manager also maintains a research department with a professional
staff of portfolio managers and securities analysts who provide research
services for the Fund and for other funds advised by the Manager.
Mellon Bank, N.A., the Manager's parent, and its affiliates may have
deposit, loan and commercial banking or other relationships with the issuers of
securities purchased by the Fund. The Manager has informed the Company that in
making its investment decisions it does not obtain or use material inside
information that Mellon Bank, N.A. or its affiliates may possess with respect to
such issuers.
The Manager's Code of Ethics (the "Code") subjects its employees'
personal securities transactions to various restrictions to ensure that such
trading does not disadvantage any fund advised by the Manager. In that regard,
portfolio managers and other investment personnel of the Manager must preclear
and report their personal securities transactions and holdings, which are
reviewed for compliance with the Code and also are subject to the oversight of
Mellon's Investment Ethics Committee. Portfolio managers and other investment
personnel who comply with the Code's preclearance and disclosure procedures and
the requirements of the Committee may be permitted to purchase, sell or hold
securities which also may be or are held in fund(s) they manage or for which
they otherwise provide investment advice.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager may pay the Distributor for shareholder
services from the Manager's own assets, including past profits but not including
the management fees paid by the Fund. The Distributor may use part or all of
such payments to pay Service Agents (as defined below) in respect of these
services. The Manager also may make such advertising and promotional
expenditures, using its own resources, as it from time to time deems
appropriate.
EXPENSES. All expenses incurred in the operation of the Company are
borne by the Company, except to the extent specifically assumed by the Manager.
The expenses borne by the Company include: taxes, interest, loan commitment
fees, interest and distributions paid on securities sold short, brokerage fees
and commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of the
Manager or its affiliates, Securities and Exchange Commission fees, state Blue
Sky qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of maintaining the
Company's existence, costs of independent pricing services, costs attributable
to investor services (including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders, costs of shareholders' reports and meetings, and any extraordinary
expenses. In addition, the Fund's Class B, Class C and Class T shares are
subject to an annual distribution fee, and Class A, Class B, Class C and Class T
shares are subject to an annual service fee. See "Distribution Plan and
Shareholder Services Plan."
As compensation for the Manager's services to the Fund, the Company,
on behalf of the Fund, has agreed to pay the Manager pursuant to the Agreement a
management fee at the annual rate of 1.50% of the Fund's average daily net
assets (the "Basic Fee"). After the Fund's first twelve months of operations,
the Basic Fee will be adjusted depending on the extent to which the investment
performance of the class of shares (the "Measuring Class") expected to bear the
highest total Fund operating expenses, after expenses, exceeds or is exceeded by
the percentage change in the investment record of the NASDAQ Composite Index
(the "NASDAQ"), as described below. The fee will be accrued daily and payable
monthly except as described below.
For the first twelve-month period after the fund commences operations,
the Manager will receive the Basic Fee with no performance adjustment. For each
month thereafter, the fee will equal 1.50% annualized if the performance of the
Measuring Class shares equals the performance of the NASDAQ. A maximum increase
to 2.50%, annualized, would be payable if the investment performance of the
Measuring Class shares exceeds the performance of the NASDAQ by eight or more
percentage points for the performance period and the minimum fee of 0.50%,
annualized, would be payable if the performance of the NASDAQ exceeds the
performance of the Measuring Class shares by eight or more percentage points for
the performance period. The performance period will be from July 1, 2000 through
the then current calendar month. After the Fund has had 36 full calendar months
of operations, the performance period becomes a rolling 36-month period. The
Basic Fee will be increased (or decreased) at the monthly rate of 1/12th of
0.125% depending on the extent, if any, by which the investment performance of
the Measuring Class shares exceeds by (or is exceeded by) at least one
percentage point (rounded to the higher whole point if exactly one-half) the
performance of the NASDAQ for the performance period. The maximum increase or
decrease in the Basic Fee for any month may not exceed 1/12th of 1.00%.
Therefore, starting in July 2001, the maximum monthly fee is 2.50%,
annualized, which would be payable if the investment performance of the
Measuring Class shares exceeds the performance of the NASDAQ by eight or more
percentage points for the performance period. Starting in July 2001, the
minimum monthly fee is 0.50%, annualized, and would be payable if the
performance of the NASDAQ exceeds the investment performance of the Measuring
Class shares by eight or more percentage points for the performance period.
The following table illustrates the full range of permitted increases
or decreases to the Basic Fee.
<TABLE>
<CAPTION>
PERCENTAGE POINT DIFFERENCE*
BETWEEN PERFORMANCE OF THE
MEASURING CLASS SHARES AND THE Adjustment to 1.50% Annual Fee Rate
NASDAQ** Basic Fee as Adjusted
- -------------------------------------- ---------------------- --------------------
<S> <C> <C>
+8 +1.00% 2.50%
+7 +.875% 2.375%
+6 +.75% 2.25%
+5 +.625% 2.125%
+4 +.50% 2.00%
+3 +.375% 1.875%
+2 +.25% 1.75%
+1 +.125% 1.625%
0 0 1.50%
-1 -.125% 1.375%
-2 -.25% 1.25%
-3 -.375% 1.125%
-4 -.50% 1.00%
-5 -.625% .875%
-6 -.75% .75%
-7 -.875% .625%
-8 -1.00% .50%
- --------------------------------
* Fractions of a percentage point will be rounded to the nearer whole point
(to the higher whole point if exactly one-half).
** Measured over the performance period, which beginning twelve months after
the fund has commenced operations, will be the period from July 1, 2000
to the most recent month-end until June 30, 2003, at which time the
performance period will become a rolling 36-month period ending with the
most recent calendar month. During the first twelve months of operations,
the fund will pay the Manager the Basic Fee of 1.50% of the fund's average
daily net assets with no performance adjustment.
</TABLE>
Since the adjustment to the Basic Fee is based on the comparative performance of
the Measuring Class shares against the NASDAQ, the controlling factor is not
whether the performance of the Measuring Class shares is up or down, but whether
that performance is up or down more than or less than that of the NASDAQ. In
addition, the relative performance of the Measuring Class shares against the
NASDAQ is measured only for the relevant performance period, and does not take
into account performance over longer or shorter periods of time.
The investment performance of the Measuring Class shares during any
performance period will be measured by the percentage difference between (i) the
opening net asset value ("NAV") of a Measuring Class share and (ii) the sum of
(a) the closing NAV of a Measuring Class share, (b) the value of any dividends
and distributions on such share during the period treated as if reinvested in
additional Measuring Class shares and (c) the per Measuring Class share value of
any capital gains taxes paid or payable by the Fund on undistributed realized
long-term capital gains. The measurement of the performance of the Measuring
Class shares will not include any effects resulting from the issuance, sale,
repurchase or redemption of shares of the Fund. The performance of the NASDAQ is
measured by the percentage change in the NASDAQ between the beginning and the
end of the performance period with cash distributions on the securities that
constitute the NASDAQ being treated as reinvested in the NASDAQ.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage commissions, interest on
borrowings and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee, exceed
the expense limitation of any state having jurisdiction over the Fund, the Fund
may deduct from the payment to be made to the Manager under the Agreement, or
the Manager will bear, such excess expense to the extent required by state law.
Such deduction or payment, if any, will be estimated daily, and reconciled and
effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
DISTRIBUTOR. The Distributor, a wholly-owned subsidiary of the Manager
located at 200 Park Avenue, New York, New York 10166, serves as the Fund's
distributor on a best efforts basis pursuant to an agreement with the Company
which is renewable annually.
The Distributor may pay dealers a fee based on the amount invested
through such dealers in Fund shares by employees participating in qualified or
non-qualified employee benefit plans or other programs where (i) the employers
or affiliated employers maintaining such plans or programs have a minimum of 250
employees eligible for participation in such plans or programs or (ii) such
plan's or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Generally, the fee paid
to dealers will not exceed 1% of the amount invested through such dealers. The
Distributor, however, may pay dealers a higher fee and reserves the right to
cease paying these fees at any time. The Distributor will pay such fees from its
own funds, other than amounts received from the Fund, including past profits or
any other source available to it.
The Distributor, at its expense, may provide promotional incentives to
dealers that sell shares of funds advised by the Manager which are sold with a
sales load. In some instances, those incentives may be offered only to certain
dealers who have sold or may sell significant amounts of shares.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN. Dreyfus
Transfer, Inc. (the "Transfer Agent"), a wholly-owned subsidiary of the Manager,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Company's transfer
and dividend disbursing agent. Under a transfer agency agreement with the
Company, the Transfer Agent arranges for the maintenance of shareholder account
records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions payable
by the Fund. For these services, the Transfer Agent receives a monthly fee
computed on the basis of the number of shareholder accounts it maintains for the
Fund during the month, and is reimbursed for certain out-of-pocket expenses.
Mellon Bank, N.A., the Manager's parent, One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, acts as custodian for the investments of the
Fund. The custodian has no part in determining the investment policies of the
Fund or which securities are to be purchased or sold by the Fund. Under a
custody agreement with the Fund, the custodian holds the Fund's securities and
keeps all necessary accounts and records. For its custody services, the
custodian receives a monthly fee based on the market value of the Fund's assets
held in custody and receives certain securities transaction charges.
HOW TO BUY SHARES
GENERAL. Fund shares may be purchased only by clients of securities
dealers, banks or other financial institutions (collectively, "Service Agents"),
except that full-time or part-time employees of the Manager or any of its
affiliates or subsidiaries, directors of the Manager, Board members of a fund
advised by the Manager, including members of the Company's Board, or the spouse
or minor child of any of the foregoing may purchase Class A shares directly
through the Distributor. Subsequent purchases may be sent directly to the
Transfer Agent or your Service Agent.
When purchasing Fund shares, you must specify which Class is being
purchased. Share certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Company reserves the right to
reject any purchase order.
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different from
those described in the Fund's Prospectus and this Statement of Additional
Information, and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees. You should consult your Service Agent in
this regard.
The minimum initial investment is $10,000. Subsequent investments must
be at least $100. However, the minimum initial investment is $750 for
Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working souse, Roth IRAs, Simplified Employee Pension Plans ("SEP-IRAs") and
rollover IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs with no minimum for subsequent purchases. The
initial investment must be accompanied by the Account Application. For full-time
or part-time employees of the Manager or any of its affiliates or subsidiaries,
directors of the Manager, Board members of a fund advised by the Manager,
including members of the Fund's Board, or the spouse or minor child of any of
the foregoing, the minimum initial investment is $2,500. The Company
reserves the right to offer its shares without regard to minimum purchase
requirements to employees participating in certain qualified or non-qualified
employee benefit plans or other programs where contributions or account
information can be transmitted in a manner and form acceptable to the Company.
The Company reserves the right to vary further the initial and subsequent
investment minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed to certain retirement
plans. These limitations apply with respect to participants at the plan level
and, therefore, do not directly affect the amount that may be invested in the
Fund by a retirement plan. Participants and plan sponsors should consult their
tax advisers for details.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
Builder(R), Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll
Savings Plan described under "Shareholder Services." These services enable you
to make regularly scheduled investments and may provide you with a convenient
way to invest for long-term financial goals. You should be aware, however, that
periodic investment plans do not guarantee a profit and will not protect an
investor against loss in a declining market.
Fund shares are sold on a continuous basis. Net asset value per share
is determined as of the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on each day the New York Stock
Exchange is open for business. For purposes of determining net asset value,
options and futures contracts will be valued 15 minutes after the close of
trading on the floor of the New York Stock Exchange. Net asset value per share
of each Class is computed by dividing the value of the Fund's net assets
represented by such Class (i.e., the value of its assets less liabilities) by
the total number of shares of such Class outstanding. The Fund's investments are
generally valued based on market value or, where market quotations are not
readily available, based on fair value as determined in good faith by the
Company's Board. For further information regarding the methods employed in
valuing the Fund's investments, see "Determination of Net Asset Value."
If an order is received in proper form by the Transfer Agent or other
entity authorized to receive orders on behalf of the Fund by the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New
York time) on a business day, Fund shares will be purchased at the public
offering price determined as of the closing of trading on the floor of the New
York Stock Exchange on that day. Otherwise, Fund shares will be purchased at the
public offering price determined as of the close of trading on the floor of the
New York Stock Exchange on the next business day, except where shares are
purchased through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the New York Stock Exchange on any business day
and transmitted to the Distributor or its designee by the close of its business
day (normally 5:15 p.m., New York time) will be based on the public offering
price per share determined as of the close of trading on the floor of the New
York Stock Exchange on that day. Otherwise, the orders will be based on the next
determined public offering price. It is the dealer's responsibility to transmit
orders so that they will be received by the Distributor or its designee before
the close of its business day. For certain institutions that have entered into
agreements with the Distributor, payment for the purchase of Fund shares may be
transmitted, and must be received by the Transfer Agent, within three business
days after the order is placed. If such payment is not received within three
business days after the order is placed, the order may be canceled and the
institution could be held liable for resulting fees and/or losses.
CLASS A SHARES. The public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
Total Sales Load Class A Shares
As a % of offering As a % of net asset Dealers' Reallowance as a
Amount of Transactions price per share value per share % of offering price
- ----------------------------------- --------------------------- ------------------------ ----------------------------
<S> <C> <C> <C>
Less than $50,000 5.75 6.10 5.00
$50,000 to less than $100,000 4.50 4.70 3.75
$100,000 to less than $250,000 3.50 3.60 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of Class A
shares purchased without an initial sales charge as part of an investment of at
least $1,000,000 or purchased through "wrap accounts" or similar programs
described below and redeemed within one year of purchase. The Distributor may
pay Service Agents an amount up to 1% of the net asset value of Class A shares
purchased by their clients as part of a $1,000,000 or more investment in Class A
shares that are subject to a CDSC.
The scale of sales loads applies to purchases of Class A shares made
by any "purchaser," which term includes an individual and/or spouse purchasing
securities for his, her or their own account or for the account of any minor
children, or a trustee or other fiduciary purchasing securities for a single
trust estate or a single fiduciary account trust estate or a single fiduciary
account (including a pension, profit-sharing, or other employee benefit trust
created pursuant to a plan qualified under Section 401 of the Code) although
more than one beneficiary is involved; or a group of accounts established by or
on behalf of the employees of an employer or affiliated employers pursuant to an
employee benefit plan or other program (including accounts established pursuant
to Sections 403(b), 408(k) and 457 of the Code); or an organized group which has
been in existence for more than six months, provided that it is not organized
for the purpose of buying redeemable securities of a registered investment
company and provided, that the purchases are made through a central
administration or a single dealer, or by other means which result in economy of
sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Fund's Class A shares. The example assumes a purchase of Class A
shares of the Fund aggregating less than $50,000, subject to the schedule of
sales charges set forth above at a price based upon a net asset value of the
Fund's Class A shares of $12.50.
Class A
Net Asset Value Per Share.............................................. $12.50
Per Share Sales Charge
Class A - 5.75% of offering price 0.76
----
(6.10% of net asset value per share).........................
Per Share Offering Price to the Public................................. $13.26
=====
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with the
Distributor pertaining to the sale of Fund shares (or which otherwise have a
brokerage related or clearing arrangement with an NASD member firm or financial
institution with respect to the sale of such shares) may purchase Class A shares
for themselves directly or pursuant to an employee benefit plan or other
program, or for their spouses or minor children, at net asset value, provided
that they have furnished the Distributor with such information as it may request
from time to time in order to verify eligibility for this privilege. This
privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible to
purchase Class A shares at net asset value. In addition, Class A shares are
offered at net asset value to full-time or part-time employees of the Manager or
any of its affiliates or subsidiaries, directors of the Manager, Board members
of a fund advised by the Manager, including members of the Company's Board, or
the spouse or minor child of any of the foregoing.
Class A shares are offered at net asset value without a sales load to
employees participating in Eligible Benefit Plans. Class A shares also may be
purchased (including by exchange) at net asset value without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds from a
qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided that,
at the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible Benefit
Plan and all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds, or certain funds
advised by Founders Asset Management LLC ("Founders"), an affiliate of the
Manager, or certain other products made available by the Distributor to such
plans, or (b) invested all of its assets in certain funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds, or certain funds advised by
Founders, or certain other products made available by the Distributor to such
plans.
Class A shares may be purchased at net asset value through certain
broker-dealers and other financial institutions which have entered into an
agreement with the Distributor, which includes a requirement that such shares be
sold for the benefit of clients participating in a "wrap account" or a similar
program under which such clients pay a fee to such broker-dealer or other
financial institution. A CDSC of 1% will be assessed at the time of redemption
of Class A shares purchased without an initial sales charge as part of an
investment through a "wrap account" or a similar program and redeemed within one
year of such purchase.
Class A shares also may be purchased at net asset value, subject to
appropriate documentation, by (i) qualified separate accounts maintained by an
insurance company pursuant to the laws of any State or territory of the United
States, (ii) a State, county or city or instrumentality thereof, (iii) a
charitable organization (as defined in Section 501(c)(3) of the Code) investing
$50,000 or more in Fund shares, and (iv) a charitable remainder trust (as
defined in Section 501(c)(3) of the Code).
CLASS B SHARES. The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on certain redemptions of
Class B shares as described in the Fund's Prospectus and in this Statement of
Additional Information under "How to Redeem Shares-- Contingent Deferred Sales
Charge--Class B Shares."
Approximately six years after the date of purchase, Class B shares
automatically will convert to Class A shares, based on the relative net asset
values for shares of each such Class. Class B shares that have been acquired
through the reinvestment of dividends and distributions will be converted on a
pro rata basis together with other Class B shares, in the proportion that a
shareholder's Class B shares converting to Class A shares bears to the total
Class B shares not acquired through the reinvestment of dividends and
distributions.
CLASS C SHARES. The public offering price for Class C shares is the
net asset value per share of that Class. No initial sales charge is imposed at
the time of purchase. A CDSC is imposed, however, on redemptions of Class C
shares made within the first year of purchase. See "How to Redeem
Shares--Contingent Deferred Sales Charge--Class C Shares."
CLASS B AND CLASS C SHARES. The Distributor compensates certain
Service Agents for selling Class B and Class C shares at the time of purchase
from its own assets. The proceeds of the CDSC and the Distribution Plan fee, in
part, are used to defray these expenses.
CLASS T SHARES. The public offering price for Class T shares is the
net asset value per share of that Class plus a sales load as shown below:
<PAGE>
<TABLE>
<CAPTION>
Total Sales Load Class T Shares
As a % of offering As a % of net asset Dealers' Reallowance as a
Amount of Transactions price per share value per share % of offering price
- --------------------------------- ---------------------- ---------------------- ---------------------------
<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.00
$50,000 to less than $100,000 4.00 4.20 3.50
$100,000 to less than $250,000 3.00 3.10 2.50
$250,000 to less than $500,000 2.00 2.00 1.75
$500,000 to less than $1,000,000 1.50 1.50 1.25
$1,000,000 or more -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of Class T
shares purchased without an initial sales charge as part of an investment of at
least $1,000,000 and redeemed within one year of purchase. The Distributor may
pay Service Agents an amount up to 1% of the net asset value of Class T shares
purchased by their clients that are subject to a CDSC. Because the expenses
associated with Class A shares will be lower than those associated with Class T
shares, purchasers investing $1,000,000 or more in the Fund generally will find
it beneficial to purchase Class A shares rather than Class T shares.
Class T shares also may be purchased at net asset value, subject to
appropriate documentation, through a broker-dealer or other financial
institution with the proceeds from the redemption of shares of a registered
open-end management investment company not managed by the Manager or its
affiliates. The purchase of Class T shares of the Fund must be made within 60
days of such redemption and the shares redeemed must have been subject to an
initial sales charge or a contingent deferred sales charge.
The scale of sales loads applies to purchases of Class T shares made
by any "purchaser," as defined above under Class A Shares.
Set forth below is an example of the method of computing the offering
price of the Fund's Class T shares. The example assumes a purchase of Class T
shares of the Fund aggregating less than $50,000, subject to the schedule of
sales charges set forth above at a price based upon a net asset value of the
Fund's Class T shares of $12.50:
Class T
Net Asset Value Per Share.............................................. $12.50
Per Share Sales Charge
Class T - 4.50% of offering price
(4.70% of net asset value per share)......................... 0.59
-----
Per Share Offering Price to the Public................................. $13.09
=====
Class T shares are offered at net asset value without a sales load to
employees participating in Eligible Benefit Plans. Class T shares also may be
purchased (including by exchange) at net asset value without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds from a
qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided, at
the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible Benefit
Plan and all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds, or certain funds
advised by Founders, or certain other products made available by the Distributor
to such plans, or (b) invested all of its assets in funds in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds, or certain funds advised by
Founders, or certain other products made available by the Distributor to such
plans.
DEALER REALLOWANCE--CLASS A AND CLASS T SHARES. The dealer reallowance
provided with respect to Class A and Class T shares may be changed from time to
time but will remain the same for all dealers. The Distributor, at its own
expense, may provide additional promotional incentives to dealers that sell
shares of funds advised by the Manager which are sold with a sales load, such as
Class A and Class T shares. In some instances, these incentives may be offered
only to certain dealers who have sold or may sell significant amounts of such
shares.
RIGHT OF ACCUMULATION--CLASS A AND CLASS T SHARES. Reduced sales loads
apply to any purchase of Class A and Class T shares, shares of other funds in
the Dreyfus Premier Family of Funds, shares of certain other funds advised by
the Manager or Founders, which are sold with a sales load and shares acquired by
a previous exchange of such shares (hereinafter referred to as "Eligible
Funds"), by you and any related "purchaser" as defined below, where the
aggregate investment including such purchase, is $50,000 or more. If, for
example, you previously purchased and still hold Class A or Class T shares of an
Eligible Fund with an aggregate current market value of $40,000 and subsequently
purchase Class A or Class T shares of the Fund or any other Eligible Fund having
a current value of $20,000, the sales load applicable to the subsequent purchase
would be reduced to 4.50% of the offering price in the case of Class A shares or
4.00% of the offering price in the case of Class T shares. All present holdings
of Eligible Funds may be combined to determine the current offering price of the
aggregate investment in ascertaining the sales load applicable to each
subsequent purchase.
To qualify at the time of purchase, you or your Service Agent must
notify the Distributor if orders are made by wire, or the Transfer Agent if
orders are made by mail. The reduced sales load is subject to confirmation of
your holdings through a check of appropriate records.
<PAGE>
DREYFUS TELETRANSFER PRIVILEGE. You may purchase shares by telephone
if you have checked the appropriate box and supplied the necessary information
on the Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an Automated Clearing
House ("ACH") member may be so designated.
Dreyfus TELETRANSFER purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any day the Transfer Agent and
the New York Stock Exchange are open for business will be credited to the
shareholder's Fund account on the next bank business day following such purchase
order. Purchase orders made after 4:00 p.m., New York time, on any day the
Transfer Agent and the New York Stock Exchange are open for business, or orders
made on Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's Fund
account on the second bank business day following such purchase order. To
qualify to use the Dreyfus TELETRANSFER Privilege, the initial payment for
purchase of shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular redemption are to be
wired to an account at any other bank, the request must be in writing and
signature-guaranteed. See "How to Redeem Shares--Dreyfus TELETRANSFER
Privilege."
REOPENING AN ACCOUNT. You may reopen an account with a minimum
investment of $100 without filing a new Account Application during the calendar
year the account is closed or during the following calendar year, provided the
information on the old Account Application is still applicable.
DISTRIBUTION PLAN AND
SHAREHOLDER SERVICES PLAN
Class B, Class C and Class T shares of the Fund are subject to a
Distribution Plan, and Class A, Class B, Class C and Class T shares of the Fund
are subject to a Shareholder Services Plan.
DISTRIBUTION PLAN. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the 1940 Act, provides, among other things, that
an investment company may bear expenses of distributing its shares only pursuant
to a plan adopted in accordance with the Rule. The Company's Board has adopted
such a plan (the "Distribution Plan") with respect to Class B, Class C and Class
T shares of the Fund pursuant to which the Fund pays the Distributor for
distributing its Class B, Class C and Class T shares at an annual rate of 0.75%
of the value of the average daily net assets of Class B and Class C shares and
0.25% of the value of the average daily net assets of Class T shares. The
Company's Board believes that there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and the holders of its Class B, Class C
and Class T shares.
<PAGE>
A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be made
to the Board for its review. In addition, the Distribution Plan provides that it
may not be amended to increase materially the costs which holders of Class B, C
or T shares may bear pursuant to the Distribution Plan without the approval of
the holders of such shares and that other material amendments of the
Distribution Plan must be approved by the Board, and by the Board members who
are not "interested persons" (as defined in the 1940 Act) of the Company and
have no direct or indirect financial interest in the operation of the
Distribution Plan or in any agreements entered into in connection with the
Distribution Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Distribution Plan is subject to annual approval
by such vote of the Board cast in person at a meeting called for the purpose of
voting on the Distribution Plan. As to the relevant Class of shares of the Fund,
the Distribution Plan may be terminated at any time by vote of a majority of the
Board members who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Distribution Plan or in any
agreements entered into in connection with the Distribution Plan or by vote of
the holders of a majority of such Class of shares.
SHAREHOLDER SERVICES PLAN. The Company has adopted a Shareholder
Services Plan as to Class A, Class B, Class C and Class T shares of the Fund.
Under the Shareholder Services Plan, the Fund pays the Distributor for the
provision of certain services to the holders of such shares a fee at the annual
rate of 0.25% of the value of the average daily net assets of such shares. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the maintenance
of such shareholder accounts. Under the Shareholder Services Plan, the
Distributor may make payments to certain Service Agents in respect of these
services.
A quarterly report of the amounts expended under the Shareholder
Services Plan and the purposes for which such expenditures were incurred, must
be made to the Board for its review. In addition, the Shareholder Services Plan
provides that material amendments must be approved by the Company's Board, and
by the Board members who are not "interested persons" (as defined in the 1940
Act) of the Company and have no direct or indirect financial interest in the
operation of the Shareholder Services Plan or in any agreements entered into in
connection with the Shareholder Services Plan, by vote cast in person at a
meeting called for the purpose of considering such amendments. The Shareholder
Services Plan is subject to annual approval by such vote of the Board members
cast in person at a meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan is terminable at any time by vote
of a majority of the Board members who are not "interested persons" and who have
no direct or indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection with the
Shareholder Services Plan.
<PAGE>
HOW TO REDEEM SHARES
CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES. A CDSC is imposed on
any redemption of Class B shares which reduces the current net asset value of
your Class B shares to an amount which is lower than the dollar amount of all
payments by you for the purchase of Class B shares of the Fund held by you at
the time of redemption. No CDSC will be imposed to the extent that the net asset
value of the Class B shares redeemed does not exceed (i) the current net asset
value of Class B shares acquired through reinvestment of dividends or capital
gain distributions, plus (ii) increases in the net asset value of your Class B
shares above the dollar amount of all your payments for the purchase of Class B
shares held by you at the time of redemption.
If the aggregate value of Class B shares redeemed has declined below
their original cost as a result of the Fund's performance, a CDSC may be applied
to the then-current net asset value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years from the time you purchased the Class B
shares until the time of redemption of such shares. Solely for purposes of
determining the number of years from the time of any payment for the purchase of
Class B shares, all payments during a month will be aggregated and deemed to
have been made on the first day of the month. The Distributor receives the
proceeds from the CDSC imposed on the redemption of Class B shares.
The following table sets forth the rates of the CDSC for Class B
shares:
CDSC as a % of
Year Since Amount Invested or
Purchase Payment Redemption Proceeds
Was Made (whichever is less)
First....................................... 4.00
Second...................................... 4.00
Third....................................... 3.00
Fourth...................................... 3.00
Fifth....................................... 2.00
Sixth....................................... 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of Class B shares
above the total amounts of payments for the purchase of Class B shares made
during the preceding six years; then of amounts representing the cost of shares
purchased six years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of time within the
applicable six-year period.
<PAGE>
For example, assume an investor purchased 100 shares at $10 per share
for a cost of $1,000. Subsequently, the shareholder acquired five additional
shares through dividend reinvestment. During the second year after the purchase
the investor decided to redeem $500 of the investment. Assuming at the time of
the redemption the net asset value had appreciated to $12 per share, the value
of the investor's shares would be $1,260 (105 shares at $12 per share). The CDSC
would not be applied to the value of the reinvested dividend shares and the
amount which represented appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of $9.60.
CONTINGENT DEFERRED SALES CHARGE--CLASS C SHARES. A CDSC of 1% is
imposed on any redemption of Class C shares within one year of the date of
purchase. The basis for calculating the payment of any such CDSC will be the
method used in calculating the CDSC for Class B shares. See "Contingent Deferred
Sales Charge--Class B Shares" above. The Distributor receives the proceeds from
the CDSC imposed on the redemption of Class C shares.
WAIVER OF CDSC. The CDSC may be waived in connection with (a)
redemptions made within one year after the death or disability, as defined in
Section 72(m)(7) of the Code, of the shareholder, (b) redemptions by employees
participating in Eligible Benefit Plans, (c) redemptions as a result of a
combination of any investment company with the Fund by merger, acquisition of
assets or otherwise, (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 70-1/2 in the case of an IRA
or Keogh plan or custodial account pursuant to Section 403(b) of the Code, and
(e) redemptions pursuant to the Automatic Withdrawal Plan, as described below.
If the Company's Board determines to discontinue the waiver of the CDSC, the
disclosure herein will be revised appropriately. Any Fund shares subject to a
CDSC which were purchased prior to the termination of such waiver will have the
CDSC waived as provided in the Fund's Prospectus or this Statement of Additional
Information at the time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you
must notify the Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
entitlement.
REDEMPTION THROUGH A SELECTED DEALER. If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected Dealer. If
the Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent prior to the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m., New York time), the redemption request will
be effective on that day. If a redemption request is received by the Transfer
Agent after the close of trading on the floor of the New York Stock Exchange,
the redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to your
account with the Selected Dealer. See "How to Buy Shares" for a discussion of
additional conditions or fees that may be imposed upon redemption.
In addition, the Distributor or its designee will accept orders from
Selected Dealers with which the Distributor has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by dealers
by the close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor or its designee prior to the
close of its business day (normally 5:15 p.m., New York time), are effected at
the price determined as of the close of trading on the floor of the New York
Stock Exchange on that day. Otherwise, the shares will be redeemed at the next
determined net asset value. It is the responsibility of the Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE. Upon written request, you may reinvest up to
the number of Class A, Class B or Class T shares you have redeemed, within 45
days of redemption, at the then-prevailing net asset value without a sales load,
or reinstate your account for the purpose of exercising Fund Exchanges. Upon
reinstatement, with respect to Class B shares, or Class A or Class T shares if
such shares were subject to a CDSC, your account will be credited with an amount
equal to the CDSC previously paid upon redemption of the shares reinvested. The
Reinvestment Privilege may be exercised only once.
WIRE REDEMPTION PRIVILEGE. By using this Privilege, you authorize the
Transfer Agent to act on wire, telephone or letter redemption instructions from
any person representing himself or herself to be you or a representative of your
Service Agent and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Company will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt by the Transfer Agent of
the redemption request in proper form. Redemption proceeds ($1,000 minimum) will
be transferred by Federal Reserve wire only to the commercial bank account
specified by you on the Account Application or Shareholder Services Form, or to
a correspondent bank if your bank is not a member of the Federal Reserve System.
Fees ordinarily are imposed by such bank and borne by the investor. Immediate
notification by the correspondent bank to your bank is necessary to avoid a
delay in crediting the funds to your bank account.
If you have access to telegraphic equipment, you may wire redemption
requests to the Transfer Agent by employing the following transmittal code which
may be used for domestic or overseas transmissions:
TRANSFER AGENT'S
TRANSMITTAL CODE ANSWER BACK SIGN
144295 144295 TSSG PREP
If you do not have direct access to telegraphic equipment, you may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-7171,
toll free. You should advise the operator that the above transmittal code must
be used and should also inform the operator of the Transfer Agent's answer back
sign.
<PAGE>
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent. This
request must be signed by each shareholder, with each signature guaranteed as
described below under "Share Certificates; Signatures."
DREYFUS TELETRANSFER PRIVILEGE. You may request by telephone that
redemption proceeds be transferred between your Fund account and your bank
account. Only a bank account maintained in a domestic financial institution
which is an ACH member may be designated. Holders of jointly registered Fund or
bank accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $500,000 within any 30-day period. You
should be aware that if you have selected the Dreyfus TELETRANSFER Privilege,
any request for a wire redemption will be effected as a Dreyfus TELETRANSFER
transaction through the ACH system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in your account at an ACH
member bank ordinarily two business days after receipt of the redemption
request. See "How to Buy Shares--Dreyfus TELETRANSFER Privilege."
SHARE CERTIFICATES; SIGNATURES. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each shareholder, including each holder of
a joint account, and each signature must be guaranteed. Signatures on endorsed
certificates submitted for redemption also must be guaranteed. The Transfer
Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP") and the
Stock Exchanges Medallion Program. Guarantees must be signed by an authorized
signatory of the guarantor and "Signature-Guaranteed" must appear with the
signature. The Transfer Agent may request additional documentation from
corporations, executors, administrators, trustees or guardians, and may accept
other suitable verification arrangements from foreign investors, such as
consular verification. For more information with respect to
signature-guarantees, please call the telephone number listed on the cover.
REDEMPTION COMMITMENT. The Company has committed itself to pay in cash
all redemption requests by any shareholder of record of the Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such amount, the
Board reserves the right to make payments in whole or in part in securities or
other assets in case of an emergency or any time a cash distribution would
impair the liquidity of the Fund to the detriment of the existing shareholders.
In such event, the securities would be valued in the same manner as the Fund's
portfolio is valued. If the recipient sold such securities, brokerage charges
would be incurred.
SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b) when
trading in the markets the relevant Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange Commission
so that disposal of the Fund's investments or determination of its net asset
value is not reasonably practicable, or (c) for such other periods as the
Securities and Exchange Commission by order may permit to protect the Fund's
shareholders.
SHAREHOLDER SERVICES
FUND EXCHANGES. Clients of certain Service Agents may purchase, in
exchange for shares of the Fund, shares of the same Class of another fund in the
Dreyfus Premier Family of Funds, shares of the same Class of certain funds
advised by Founders, or shares of certain other funds in the Dreyfus Family of
Funds, and, with respect to Class T shares of the Fund, Class A shares of
certain Dreyfus Premier fixed-income funds, to the extent such shares are
offered for sale in your state of residence. Shares of other funds purchased by
exchange will be purchased on the basis of relative net asset value per share as
follows:
A. Exchanges for shares of funds offered without a sales load will be
made without a sales load in shares of other funds offered without a
sales load.
B. Shares of funds purchased without a sales load may be exchanged for
shares of other funds sold with a sales load, and the applicable sales
load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged without a
sales load for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds acquired
by a previous exchange from shares purchased with a sales load and
additional shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein as
"Purchased Shares") may be exchanged for shares of other funds sold
with a sales load (referred to herein as "Offered Shares"), but if the
sales load applicable to the Offered Shares exceeds the maximum sales
load that could have been imposed in connection with the Purchased
Shares (at the time the Purchased Shares were acquired), without
giving effect to any reduced loads, the difference will be deducted.
E. Shares of funds subject to a CDSC exchanged for shares of another fund
will be subject to the higher applicable CDSC of the two funds and,
for purposes of calculating CDSC rates and conversion periods, if any,
will be deemed to have been held since the date the shares being
exchanged were initially purchased.
To accomplish an exchange under item D above, you or your Service
Agent acting on your behalf must notify the Transfer Agent of your prior
ownership of Fund shares and your account number.
Fund shares subject to a CDSC also may be exchanged for shares of
Dreyfus Worldwide Dollar Money Market Fund, Inc. The shares so purchased will be
held in a special account created solely for this purpose ("Exchange Account").
Exchanges of shares from an Exchange Account only can be made into certain other
funds managed or administered by the Manager. No CDSC is charged when an
investor exchanges into an Exchange Account; however, the applicable CDSC will
be imposed when shares are redeemed from an Exchange Account or other applicable
Fund account. Upon redemption, the applicable CDSC will be calculated without
regard to the time such shares were held in an Exchange Account. See "How to
Redeem Shares." Redemption proceeds for Exchange Account shares are paid by
Federal wire or check only. Exchange Account shares also are eligible for the
Dreyfus Auto-Exchange Privilege, Dreyfus Dividend Sweep and the Automatic
Withdrawal Plan.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. The ability to issue exchange instructions by telephone is given to
all Fund shareholders automatically, unless you check the applicable "No" box on
the Account Application, indicating that you specifically refuse this Privilege.
By using the Telephone Exchange Privilege, you authorize the Transfer Agent to
act on telephonic instructions (including over The Dreyfus Touch(R) automated
telephone system) from any person representing himself or herself to be you or a
representative of your Service Agent and reasonably believed by the Transfer
Agent to be genuine. Telephone exchanges may be subject to limitations as to the
amount involved or the number of telephone exchanges permitted. Shares issued in
certificate form are not eligible for telephone exchange. No fees currently are
charged shareholders directly in connection with exchanges, although the Company
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal administrative fee in accordance with rules promulgated
by the Securities and Exchange Commission.
To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
DREYFUS AUTO-EXCHANGE PRIVILEGE. Dreyfus Auto-Exchange Privilege
permits you to purchase, in exchange for shares of the Fund, shares of the same
Class of another fund in the Dreyfus Premier Family of Funds, shares of the same
Class of certain funds advised by Founders, or shares of certain other funds in
the Dreyfus Family of Funds, and, with respect to Class T shares of the Fund,
Class A shares of certain Dreyfus Premier fixed-income funds, of which you are a
shareholder. This Privilege is available only for existing accounts. Shares will
be exchanged on the basis of relative net asset value as described above under
"Fund Exchanges." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by you. You
will be notified if your account falls below the amount designated to be
exchanged under this Privilege. In this case, your account will fall to zero
unless additional investments are made in excess of the designated amount prior
to the next Auto-Exchange transaction. Shares held under IRA accounts and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares may be
made between IRA accounts and from regular accounts to IRA accounts, but not
from IRA accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Company reserves the right to reject any
exchange request in whole or in part. Shares may be exchanged only between
accounts having identical names and other identifying designations. The Fund
Exchanges service or Dreyfus Auto-Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
DREYFUS-AUTOMATIC ASSET BUILDER(R). Dreyfus-AUTOMATIC Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE. Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social Security,
or certain veterans' military or other payments from the U.S. Government
automatically deposited into your fund account. You may deposit as much of such
payments as you elect.
DREYFUS PAYROLL SAVINGS PLAN. Dreyfus Payroll Savings Plan permits you
to purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus account
electronically through the ACH system at each pay period. To establish a Dreyfus
Payroll Savings Plan account, you must file an authorization form with your
employer's payroll department. It is the sole responsibility of your employer to
arrange for transactions under the Dreyfus Payroll Savings Plan.
DREYFUS DIVIDEND OPTIONS. Dreyfus Dividend Sweep allows you to invest
automatically your dividends or dividends and capital gain distributions, if
any, from the Fund in shares of another fund in the Dreyfus Family of Funds or
shares of the same Class of another fund in the Dreyfus Premier Family of Funds,
shares of the same Class of certain funds advised by Founders, or shares of
certain other funds in the Dreyfus Family of Funds, and with respect to Class T
shares of the Fund, Class A shares of certain Dreyfus Premier fixed-income
funds, of which you are a shareholder. Shares of other funds purchased pursuant
to this privilege will be purchased on the basis of relative net asset value per
share as follows:
A. Dividends and distributions paid by a fund may be invested without
imposition of a sales load in shares of other funds offered without a
sales load.
B. Dividends and distributions paid by a fund which does not charge a
sales load may be invested in shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund that charges a sales load
may be invested in shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), but if the sales load
applicable to the Offered Shares exceeds the maximum sales load
charged by the fund from which dividends or distributions are being
swept (without giving effect to any reduced loads), the difference
will be deducted.
D. Dividends and distributions paid by a fund may be invested in shares
of other funds that impose a CDSC and the applicable CDSC, if any,
will be imposed upon redemption of such shares.
Dreyfus Dividend ACH permits you to transfer electronically dividends
or dividends and capital gain distributions, if any, from the Fund to a
designated bank account. Only an account maintained at a domestic financial
institution which is an ACH member may be so designated. Banks may charge a fee
for this service.
AUTOMATIC WITHDRAWAL PLAN. The Automatic Withdrawal Plan permits you
to request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. Withdrawal
payments are the proceeds from sales of Fund shares, not the yield on the
shares. If withdrawal payments exceed reinvested dividends and distributions,
your shares will be reduced and eventually may be depleted. The Automatic
Withdrawal Plan may be terminated at any time by you, the Company or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
Certain retirement plans, including Dreyfus-sponsored retirement
plans, may permit certain participants to establish an automatic withdrawal plan
from such retirement plans. Participants should consult their retirement plan
sponsor and tax adviser for details. Such a withdrawal plan is different than
the Automatic Withdrawal Plan.
No CDSC with respect to Class B shares of the Fund will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the amounts
withdrawn under the plan do not exceed on an annual basis 1% of the account
value at the time the shareholder elects to participate in the Automatic
Withdrawal Plan. Withdrawals with respect to Class B shares under the Automatic
Withdrawal Plan that exceed, on an annual basis, 12% of the value of the
shareholders account will be subject to a CDSC on the amounts exceeding 12% of
the initial account value. Withdrawals of Class A and Class T shares subject to
a CDSC and Class C shares under the Automatic Withdrawal Plan will be subject to
any applicable CDSC. Purchases of additional Class A and Class T shares where
the sales load is imposed concurrently with withdrawals of Class A and Class T
shares generally are undesirable.
LETTER OF INTENT - CLASS A AND CLASS T SHARES. By signing a Letter of
Intent form, which can be obtained by calling 1-800-554-4611, you become
eligible for the reduced sales load applicable to the total number of Eligible
Fund shares purchased in a 13 month period pursuant to the terms and conditions
set forth in the Letter of Intent. A minimum initial purchase of $5,000 is
required. To compute the applicable sales load, the offering price of shares you
hold (on the date of submission of the Letter of Intent) in any Eligible Fund
that may be used toward "Right of Accumulation" benefits described above may be
used as a credit toward completion of the Letter of Intent. However, the reduced
sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in
the Letter of Intent for payment of a higher sales load if you do not purchase
the full amount indicated in the Letter of Intent. The escrow will be released
when you fulfill the terms of the Letter of Intent by purchasing the specified
amount. If your purchases qualify for a further sales load reduction, the sales
load will be adjusted to reflect your total purchase at the end of 13 months. If
total purchases are less than the amount specified, you will be requested to
remit an amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If such
remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will redeem an
appropriate number of Class A or Class T shares of the Fund held in escrow to
realize the difference. Signing a Letter of Intent does not bind you to
purchase, or the Fund to sell, the full amount indicated at the sales load in
effect at the time of signing, but you must complete the intended purchase to
obtain the reduced sales load. At the time you purchase Class A or Class T
shares, you must indicate your intention to do so under a Letter of Intent.
Purchases pursuant to a Letter of Intent will be made at the then-current net
asset value plus the applicable sales load in effect at the time such Letter of
Intent was executed.
CORPORATE PENSION/PROFIT-SHARING AND RETIREMENT PLANS. The Company
makes available to corporations a variety of prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan. In addition, the
Company makes available Keogh Plans, IRAs (including regular IRAs, spousal IRAs
for a non-working spouse, Roth IRAs, SEP-IRAs, rollover IRAs and Education
IRAs), 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services
also are available.
If you wish to purchase Fund shares in conjunction with a Keogh Plan,
a 403(b)(7) Plan or an IRA, including a SEP-IRA, you may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.
SHARES MAY BE PURCHASED IN CONNECTION WITH THESE PLANS ONLY BY DIRECT
REMITTANCE TO THE ENTITY ACTING AS CUSTODIAN. PURCHASES FOR THESE PLANS MAY NOT
BE MADE IN ADVANCE OF RECEIPT OF FUNDS.
You should read the prototype retirement plan and the appropriate form
of custodial agreement for further details on eligibility, service fees and tax
implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
VALUATION OF PORTFOLIO SECURITIES. The Fund's securities, including
covered call options written by the Fund, are valued at the last sale price on
the securities exchange or national securities market on which such securities
primarily are traded. Securities not listed on an exchange or national
securities market, or securities in which there were no transactions, are valued
at the average of the most recent bid and asked prices, except that open short
positions are valued at the asked price. Bid price is used when no asked price
is available. Any assets or liabilities initially expressed in terms of foreign
currency will be translated into U.S. dollars at the midpoint of the New York
interbank market spot exchange rate as quoted on the day of such translation or,
if no such rate is quoted on such date, such other quoted market exchange rate
as may be determined to be appropriate by the Manager. Forward currency
contracts will be valued at the current cost of offsetting the contract. If the
Fund has to obtain prices as of the close of trading on various exchanges
throughout the world, the calculation of net asset value may not take place
contemporaneously with the determination of prices of certain of the Fund's
securities. Short-term investments may be carried at amortized cost, which
approximates value. Expenses and fees, including the management fee and fees
pursuant to the Distribution Plan, if applicable, and the Shareholder Services
Plan, are accrued daily and taken into account for the purpose of determining
the net asset value of the Fund's shares.
Restricted securities, as well as securities or other assets for which
recent market quotations are not readily available, or are not valued by a
pricing service approved by the Board, are valued at fair value as determined in
good faith by the Board. The Board will review the method of valuation on a
current basis. In making their good faith valuation of restricted securities,
the Board members generally will take the following factors into consideration:
restricted securities which are, or are convertible into, securities of the same
class of securities for which a public market exists usually will be valued at
market value less the same percentage discount at which purchased. This discount
will be revised periodically by the Board if the Board members believe that it
no longer reflects the value of the restricted securities. Restricted securities
not of the same class as securities for which a public market exists usually
will be valued initially at cost. Any subsequent adjustment from cost will be
based upon considerations deemed relevant by the Board.
NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"), if such
qualification is in the best interest of its shareholders. As a regulated
investment company, the Fund will pay no Federal income tax on net investment
income and net realized securities gains to the extent such income and gains are
distributed to shareholders. To qualify as a regulated investment company, the
Fund must distribute at least 90% of its net income (consisting of net
investment income and net short-term capital gain) to its shareholders and meet
certain asset diversification and other requirements. If the Fund does not
qualify as a regulated investment company, it will be treated for tax purposes
as an ordinary corporation subject to Federal income tax. The term "regulated
investment company" does not imply the supervision of management or investment
practices or policies by any government agency.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest such
dividends or distributions and all future dividends and distributions payable to
you in additional Fund shares at net asset value. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.
Any dividend or distribution paid shortly after your purchase may have
the effect of reducing the aggregate net asset value of your shares below the
cost of your investment. Such a dividend or distribution would be a return of
investment in an economic sense, although taxable as stated in the Fund's
Prospectus. In addition, if a shareholder holds shares of the Fund for six
months or less and has received a capital gain distribution with respect to such
shares, any loss incurred on the sale of such shares will be treated as
long-term capital loss to the extent of the capital gain distribution received.
In general, dividends (other than capital gain dividends) paid by the
Fund to U.S. corporate shareholders may be eligible for the dividends received
deduction to the extent that the Fund's income consists of dividends paid by
U.S. corporations on shares that have been held by the Fund for at least 46 days
during the 90-day period commencing 45 days before the shares become
ex-dividend. In order to claim the dividends received deduction, the investor in
the Fund must have held its shares in the Fund for at least 46 days during the
90-day period commencing 45 days before the Fund shares become ex-dividend.
Additional restrictions on an investor's ability to claim the dividends received
deduction may apply.
The Fund may qualify for and make an election under which shareholders
may be eligible to claim a credit or deduction on their Federal income tax
returns for, and will be required to treat as part of the amounts distributed to
them, their pro rata portion of qualified taxes paid or incurred by the Fund to
foreign countries. The Fund may make that election provided that more than 50%
of the value of the Fund's total assets at the close of the taxable year
consists of securities in foreign corporations and the Fund satisfies certain
distribution requirements. The foreign tax credit available to shareholders is
subject to certain limitations.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or loss
realized from the disposition of foreign currencies and non-U.S. dollar
denominated securities (including debt instruments and certain forward contracts
and options) may be treated as ordinary income or loss. In addition, all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds will be treated as ordinary income. Finally, all or a
portion of the gain realized from engaging in "conversion transactions"
(generally including certain transactions designed to convert ordinary income
into capital gain) may be treated as ordinary income.
Gain or loss, if any, realized by the Fund from certain forward
contracts and options transactions ("Section 1256 contracts") will be treated as
60% long-term capital gain or loss and 40% short-term capital gain or loss. Gain
or loss will arise upon exercise or lapse of Section 1256 contracts as well as
from closing transactions. In addition, any Section 1256 contracts remaining
unexercised at the end of the Fund's taxable year will be treated as sold for
their then fair market value, resulting in additional gain or loss to the Fund
characterized in the manner described above.
Offsetting positions held by the Fund involving certain futures or
forward contracts or options transactions with respect to actively traded
personal property may be considered, for tax purposes, to constitute
"straddles." To the extent the straddle rules apply to positions established by
the Fund, losses realized by the Fund may be deferred to the extent of
unrealized gain in the offsetting position. In addition, short-term capital loss
on straddle positions may be recharacterized as long-term capital loss, and
long-term capital gains on straddle positions may be treated as short-term
capital gains or ordinary income. Certain of the straddle positions held by the
Fund may constitute "mixed straddles." The Fund may make one or more elections
with respect to the treatment of "mixed straddles," resulting in different tax
consequences. In certain circumstances, the provisions governing the tax
treatment of straddles override or modify certain of the provisions discussed
above.
If the Fund either (1) holds an appreciated financial position with
respect to stock, certain debt obligations, or partnership interests
("appreciated financial position") and then enters into a short sale, futures,
forward, or offsetting notional principal contract (collectively, a "Contract")
respecting the same or substantially identical property or (2) holds an
appreciated financial position that is a Contract and then acquires property
that is the same as, or substantially identical to, the underlying property, the
Fund generally will be taxed as if the appreciated financial position were sold
at its fair market value on the date the Fund enters into the financial position
or acquires the property, respectively.
If the Fund enters into certain derivatives (including forward
contracts, long positions under notional principal contracts, and related puts
and calls) with respect to equity interests in certain pass-thru entities
(including other regulated investment companies, real estate investment trusts,
partnerships, real estate mortgage investment conduits and certain trusts and
foreign corporations), long-term capital gain with respect to the derivative may
be recharacterized as ordinary income to the extent it exceeds the long-term
capital gain that would have been realized had the interest in the pass-thru
entity been held directly by the Fund during the term of the derivative
contract. Any gain recharacterized as ordinary income will be treated as
accruing at a constant rate over the term of the derivative contract and may be
subject to an interest charge. The Treasury has authority to issue regulations
expanding the application of these rules to derivatives with respect to debt
instruments and/or stock in corporations that are not pass-thru entities.
Investment by the Fund in securities issued or acquired at a discount,
or providing for deferred interest or for payment of interest in the form of
additional obligations, could under special tax rules affect the amount, timing
and character of distributions to shareholders by causing the Fund to recognize
income prior to the receipt of cash payments. For example, the Fund could be
required each year to accrue a portion of the discount (or deemed discount) at
which the securities were issued and to distribute such income in order to
maintain its qualification as a regulated investment company. In such case, the
Fund may have to dispose of securities which it might otherwise have continued
to hold in order to generate cash to satisfy the distribution requirements.
If the Fund invests in an entity that is classified as a "passive
foreign investment company" ("PFIC") for Federal income tax purposes, the
operation of certain provisions of the Code applying to PFICs could result in
the imposition of certain Federal income taxes on the Fund. In addition, gain
realized from the sale or other disposition of PFIC securities held beyond the
end of the Fund's taxable year may be treated as ordinary income under Section
1291 of the Code and, with respect to PFIC securities that are marked-to-market,
under Section 1296 of the Code.
Federal regulations require that you provide a certified taxpayer
identification number ("TIN") upon opening or reopening an account. See the
Account Application for further information concerning this requirement. Failure
to furnish a certified TIN to the Company could subject you to a $50 penalty
imposed by the Internal Revenue Service.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing orders on behalf
of the Company for the purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the best judgment
of the Manager and in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most favorable net
price. Subject to this consideration, the brokers selected will include those
that supplement the Manager's research facilities with statistical data,
investment information, economic facts and opinions. Information so received is
in addition to and not in lieu of services required to be performed by the
Manager and the Manager's fees are not reduced as a consequence of the receipt
of such supplemental information. Such information may be useful to the Manager
in serving both the Company and other funds it advises and, conversely,
supplemental information obtained by the placement of business of other clients
may be useful to the Manager in carrying out its obligations to the Company.
Sales by a broker of shares of the Fund or other funds managed,
advised or administered by the Manager or its affiliates may be taken into
consideration, and brokers also will be selected because of their ability to
handle special executions such as are involved in large block trades or broad
distributions, provided the primary consideration is met. Large block trades
may, in certain cases, result from two or more funds advised or administered by
the Manager being engaged simultaneously in the purchase or sale of the same
security. Certain of the Fund's transactions in securities of foreign issuers
may not benefit from the negotiated commission rates available to the Fund for
transactions in securities of domestic issuers. When transactions are executed
in the over-the-counter market, the Fund will deal with the primary market
makers unless a more favorable price or execution otherwise is obtainable.
Foreign exchange transactions are made with banks or institutions in the
interbank market at prices reflecting a mark-up or mark-down and/or commission.
Portfolio turnover may vary from year to year as well as within a
year. In periods in which extraordinary market conditions prevail, the Manager
will not be deterred from changing the Fund's investment strategy as rapidly as
needed, in which case higher turnover rates can be anticipated which would
result in greater brokerage expenses. The overall reasonableness of brokerage
commissions paid is evaluated by the Manager based upon its knowledge of
available information as to the general level of commissions paid by other
institutional investors for comparable services. Higher portfolio turnover rates
usually generate additional brokerage commissions and transaction costs and any
short-term gains realized from these transactions are taxable to shareholders as
ordinary income.
The Company contemplates that, consistent with the policy of obtaining
prompt execution of orders at the most favorable net price, brokerage
transactions may be conducted through the Manager or its affiliates, including
Dreyfus Investment Services Corporation ("DISC") and Dreyfus Brokerage Services,
Inc. ("DBS"). The Company's Board has adopted procedures in conformity with Rule
17e-1 under the 1940 Act to ensure that all brokerage commissions paid to the
Manager or its affiliates are reasonable and fair.
PERFORMANCE INFORMATION
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum offering
price in the case of Class A or Class T) per share with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial investment,
taking the "n"th root of the quotient (where "n" is the number of years in the
period) and subtracting 1 from the result. A Class' average annual total return
figures calculated in accordance with such formula assume that in the case of
Class A or Class T, the maximum sales load has been deducted from the
hypothetical initial investment at the time of purchase or in the case of Class
B or Class C, the maximum applicable CDSC has been paid upon redemption at the
end of the period.
Aggregate total return is calculated by subtracting the amount of the
Fund's net asset value (maximum offering price in the case of Class A or Class
T) per share at the beginning of a stated period from the net asset value per
share at the end of the period (after giving effect to the reinvestment of
dividends and distributions during the period and any applicable CDSC), and
dividing the result by the net asset value (maximum offering price in the case
of Class A or Class T) per share at the beginning of the period. Aggregate total
return also may be calculated based on the net asset value per share at the
beginning of the period instead of the maximum offering price per share at the
beginning of the period for Class A or Class T shares or without giving effect
to any applicable CDSC at the end of the period for Class B or Class C shares.
In such cases, the calculation would not reflect the deduction of the sales load
with respect to Class A or Class T shares or any applicable CDSC with respect to
Class B or Class C shares, which, if reflected, would reduce the performance
quoted.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Micropal, Morningstar, Inc., Standard & Poor's 500
Composite Stock Price Index, Standard & Poor's MidCap 400 Index, the Dow Jones
Industrial Average, Russell Mid Cap Index, the NASDAQ, the NASDAQ 100, MONEY
MAGAZINE, Wilshire 5000 Index and other industry publications. From time to
time, advertising materials for the Fund may include biographical information
relating to its portfolio manager, and may refer to or include commentary by the
Fund's portfolio manager relating to investment strategy (including "growth" and
"value" investing), asset growth, current or past business, political, economic
or financial conditions and other matters of general interest to investors.
Also, from time to time, advertising materials for the Fund may include
information concerning retirement and investing for retirement, may refer to the
approximate number of then-current Fund shareholders and may refer to Lipper or
Morningstar ratings and related analysis supporting the ratings. In addition,
from time to time, advertising materials may refer to studies performed by the
Manager or its affiliates, such as "The Dreyfus Tax Informed Investing Study" or
"The Dreyfus Gender Investment Comparison Study" or other such studies.
Advertisements for the Fund also may discuss the technology sector and sectors
within the technology sector including the growth and performance of such
sectors and the stocks included in such sectors, the potential benefits and
risks of investing in the technology sector and small- cap stocks and the number
of stocks the Fund holds or intends to hold in its portfolio.
INFORMATION ABOUT THE COMPANY AND FUND
Each Fund share has one vote and, when-issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Fund shares have equal rights as to dividends and in liquidation. Shares have no
preemptive or subscription rights and are freely transferable.
The Company is organized as a business trust under the laws of the
Commonwealth of Massachusetts. Under Massachusetts law, shareholders, under
certain circumstances, could be held personally liable for the obligations of
the Fund. However, the Company's Agreement and Declaration of Trust (the "Trust
Agreement") disclaims shareholder liability for acts or obligations of the
Company or Fund and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Fund or a
Trustee. The Trust Agreement provides for indemnification from the Fund's
property for all losses and expenses of any shareholder held personally liable
for the obligations of the Fund. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund itself would be unable to meet its obligations, a possibility
which management believes is remote. Upon payment of any liability incurred by
the Fund, the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Fund intends to conduct
its operations in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Fund.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Company to hold annual meetings of shareholders. As a result,
shareholders may not consider each year the election of Board members or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Board member from office.
Shareholders may remove a Board member by the affirmative vote of two-thirds of
the Company's outstanding voting shares. In addition, the Board will call a
meeting of shareholders for the purpose of electing Board members if, at any
time, less than a majority of the Board members then holding office have been
elected by shareholders.
The Company is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for certain
matters under the 1940 Act and for other purposes. A shareholder of one
portfolio is not deemed to be a shareholder of any other portfolio. For certain
matters shareholders vote together as a group; as to others they vote separately
by portfolio.
To date, the Board has authorized the creation of one series of
shares. All consideration received by the Company for shares of a series, and
all assets in which such consideration is invested, will belong to that series
(subject only to the rights of creditors of the Company) and will be subject to
the liabilities related thereto. The income attributable to, and the expenses
of, a series will be treated separately from those of the other series. The
Company has the ability to create, from time to time, new series without
shareholder approval.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
company, such as the Company, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear that the interests
of each series in the matter are identical or that the matter does not affect
any interest of such series. The Rule exempts the selection of independent
accountants and the election of Board members from the separate voting
requirements of the Rule.
The Fund will send annual and semi-annual financial statements to all
its shareholders.
The Fund is intended to be a long-term investment vehicle and is not
designed to provide investors with a means of speculation on short-term market
movements. A pattern of frequent purchases and exchanges can be disruptive to
efficient portfolio management and, consequently, can be detrimental to the
Fund's performance and its shareholders. Accordingly, if the Company's
management determines that an investor is engaged in excessive trading, the
Company, with or without prior notice, may temporarily or permanently terminate
the availability of Fund Exchanges, or reject in whole or part any purchase or
exchange request, with respect to such investor's account. Such investors also
may be barred from purchasing other funds in the Dreyfus Family of Funds.
Generally, an investor who makes more than four exchanges out of the Fund during
any calendar year or who makes exchanges that appear to coincide with an active
market-timing strategy may be deemed to be engaged in excessive trading.
Accounts under common ownership or control will be considered as one account for
purposes of determining a pattern of excessive trading. In addition, the Company
may refuse or restrict purchase or exchange requests by any person or group if,
in the judgment of the Company's management, the Fund would be unable to invest
the money effectively in accordance with its investment objective and policies
or could otherwise be adversely affected or if the Fund receives or anticipated
receiving simultaneous orders that may significantly affect the Fund (e.g.,
amounts equal to 1% or more of the Fund's total assets). If an exchange request
is refused, the Company will take no other action with respect to the shares
until it receives further instructions from the investor. The Fund may delay
forwarding redemption proceeds for up to seven days if the investor redeeming
shares is engaged in excessive trading or if the amount of the redemption
request otherwise would be disruptive to efficient portfolio management or would
adversely affect the Fund. The Company's policy on excessive trading applies to
investors who invest in the Fund directly or through financial intermediaries,
but does not apply to the Dreyfus Auto-Exchange Privilege, to any automatic
investment or withdrawal privilege described herein, or to participants in
employer-sponsored retirement plans.
During times of drastic economic or market conditions, the Company may
suspend Fund Exchanges temporarily without notice and treat exchange requests
based on their separate components--redemption orders with a simultaneous
request to purchase the other fund's shares. In such a case, the redemption
request would be processed at the Fund's next determined net asset value but the
purchase order would be effective only at the net asset value next determined
after the fund being purchased receives the proceeds of the redemption, which
may result in the purchase being delayed.
To offset the relatively higher costs of servicing smaller accounts,
the Fund will charge regular accounts with balances below $2,000 an annual fee
of $12. The valuation of accounts and the deductions are expected to take place
during the last four months of each year. The fee will be waived for any
investor whose aggregate Dreyfus mutual fund investments total at least $25,000,
and will not apply to IRA accounts or to accounts participating in automatic
investment programs or opened through a securities dealer, bank or other
financial institution, or to other fiduciary accounts.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Company, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the Company.
YEAR 2000 ISSUES
The Fund could be adversely affected if the computer systems used by
the Manager and the Fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Manager
has taken steps designed to avoid year 2000- related problems in its systems and
to monitor the readiness of other service providers. In addition, issuers of
securities in which the Fund invests may be adversely affected by year 2000-
related problems. This could have an impact on the value of the Fund's
investments and its share price.
<PAGE>
APPENDIX
Description of certain ratings assigned by S&P, Moody's, Fitch and
Duff:
S&P
BOND RATINGS
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default
and are dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.
S&P's letter ratings may be modified by the addition of a plus (+) or
a minus (-) sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
COMMERCIAL PAPER RATING
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.
A-3
Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
Moody's
BOND RATINGS
Aaa
Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and generally are referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa
Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what generally are known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A
Bonds rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa
Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba
Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and, therefore, not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B
Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa
Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and in
the categories below B. The modifier 1 indicates a ranking for the security in
the higher end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of a rating
category.
COMMERCIAL PAPER RATING
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be evidenced
by leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirements for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Fitch
BOND RATINGS
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings take
into consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
<PAGE>
SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.
F-1+
EXCEPTIONALLY STRONG CREDIT QUALITY. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
VERY STRONG CREDIT QUALITY. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
Duff
BOND RATINGS
AAA
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because of
economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment. Considerable
variability in risk exists during economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial protection
factors fluctuate according to industry conditions or company fortunes. Overall
quality may move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating within
this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such bonds
may be in default or have considerable uncertainty as to timely payment of
interest, preferred dividends and/or principal. Protection factors are narrow
and risk can be substantial with unfavorable economic or industry conditions
and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating category.
COMMERCIAL PAPER RATING
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of timely
payment with excellent liquidity factors which are supported by ample asset
protection. Risk factors are minor.
<PAGE>
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT AUDITORS
DREYFUS PREMIER NEXTECH FUND
STATEMENT OF ASSETS AND LIABILITIES
May 22, 2000
ASSETS:
Cash................................................ $279,000
LIABILITIES:
Accrued organization costs payable.................. 179,000
--------
NET ASSETS............................................. $100,000
========
COMPOSITION OF NET ASSETS
Paid-in capital........................................ $279,000
Accumulated net
investment loss...................................... (179,000)
---------
NET ASSETS............................................. $100,000
=========
<TABLE>
<CAPTION>
Net Asset Value Per Share
CLASS A CLASS B CLASS C CLASS T
<S> <C> <C> <C> <C>
Net Assets......................... $25,000 $25,000 $25,000 $25,000
Shares Outstanding................. 2,000 2,000 2,000 2,000
Net Asset Value Per Share.......... $ 12.50 $ 12.50 $ 12.50 $ 12.50
Sales charge -- 5.75% and 4.50%
of public offering of Class A and
Class T shares, respectively....... 0.76 - - 0.59
Maximum Offering Price............. $ 13.26 $ 12.50 $ 12.50 $ 13.09
======= ======= ======= =======
See notes to financial statements.
</TABLE>
<PAGE>
Dreyfus Premier NexTech Fund
STATEMENT OF OPERATIONS
For the Period from April 13, 2000 (date of organization) to May 22, 2000
INVESTMENT INCOME $ -
EXPENSES
ORGANIZATION EXPENSE (179,000)
--------
NET INVESTMENT (LOSS) $ (179,000)
==========
See notes to financial statements.
Dreyfus Premier NexTech Fund
NOTES TO FINANCIAL STATEMENTS
Dryfus Premier Nextech Fund (the "Fund") is the initial series of Dreyfus
Premier Opportunity Funds (the "Company"). The Company was organized as a
Massachusetts business trust and has had no operations as of the date hereof
other than matters relating to its organization and registration as an open-end
investment company under the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended, and the sale and issuance of 2,000 shares of
beneficial interest each of Class A, Class B, Class C and Class T, respectively,
of the Fund to The Dreyfus Corporation.
The Fund has agreed to pay The Dreyfus Corporation a management fee at the
annual rate of 1.50% of the Fund's average daily net assets (the "Basic Fee").
After the Fund's first twelve months of operations, the Basic Fee will be
adjusted depending on the extent to which the investment performance of the
class of shares expected to bear the highest total operating expenses, after
expenses, exceeds or is exceeded by the percentage change in the investment
record of the NASDAQ Composite Index.
The Fund is authorized to issue an unlimited number of $.001 par value shares in
the following classes of shares: Class A, Class B, Class C and Class T shares.
Class A and Class T shares are subject to a sales charge imposed at the time of
purchase, Class B shares are subject to a contingent deferred sales charge
("CDSC") imposed on Class B redemptions made within six years of purchase and
Class C shares are subject to a CDSC imposed on Class C shares redeemed within
one year of purchase. Other differences between the classes include the
services offered to and the expenses borne by each class and certain voting
rights.
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.
In accordance with AICPA Statement of Position 98-5 "Reporting on the Costs of
Start-Up Activities", organizational costs estimated at $179,000 have been
charged to expense.
The Fund intends to qualify as a regulated investment company by complying with
the applicable provisions of the Internal Revenue Code of 1986, as amended, and
to make distributions of income and net realized capital gain sufficient to
relieve it from substantially all Federal income and excise taxes.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholder and Board of Trustees
Dreyfus Premier NexTech Fund
We have audited the accompanying statement of assets and liabilities
of Dreyfus Premier NexTech Fund (one of the funds comprising Dreyfus Premier
Opportunity Funds) as of May 22, 2000 and the related statement of operations
for the period from April 13, 2000 (date of organization) to May 22, 2000. These
financial statements are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Dreyfus Premier
NexTech Fund at May 22, 2000 and the results of its operations for the period
from April 13, 2000 to May 22, 2000, in conformity with accounting principles
generally accepted in the United States.
ERNST & YOUNG LLP
New York, New York
May 22, 2000
