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PROSPECTUS MAY 2, 1994
THE DREYFUS FUND INCORPORATED
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THE DREYFUS FUND INCORPORATED (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL
FUND. ITS GOAL IS TO PROVIDE YOU WITH LONG-TERM CAPITAL GROWTH
CONSISTENT WITH THE PRESERVATION OF CAPITAL. CURRENT INCOME IS A
SECONDARY BUT IMPORTANT GOAL.
THE FUND IS THE FLAGSHIP FUND OF THE DREYFUS FAMILY OF FUNDS. IT IS
ONE OF THE LARGEST, OLDEST AND BEST KNOWN MUTUAL FUNDS AND
INVESTS PRIMARILY IN COMMON STOCKS.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE
FUND THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION),
DATED MAY 2, 1994, WHICH MAY BE REVISED FROM TIME TO TIME,
PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS
AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE
FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-
0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR
666.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. FUND SHARES INVOLVE CERTAIN
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE
FUND'S SHARE PRICE AND INVESTMENT RETURN FLUCTUATE AND ARE NOT
GUARANTEED.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES................... 2
CONDENSED FINANCIAL INFORMATION.................. 2
DESCRIPTION OF THE FUND.......................... 3
MANAGEMENT OF THE FUND........................... 6
HOW TO BUY FUND SHARES........................... 6
SHAREHOLDER SERVICES............................. 8
HOW TO REDEEM FUND SHARES........................ 11
DIVIDENDS, DISTRIBUTIONS AND TAXES............... 13
PERFORMANCE INFORMATION.......................... 14
GENERAL INFORMATION.............................. 15
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees........................................ .62%
Other Expenses......................................... .12%
Total Fund Operating Expenses.......................... .74%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $8 $24 $41 $92
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding the
various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. You can purchase Fund shares without charge directly from Dreyfus
Service Corporation; you may be charged a nominal fee if you effect
transactions in Fund shares through a securities dealer, bank or other
financial institution. See "Management of the Fund."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and
related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Capital Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This
information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
----- ----- ----- ----- ----- ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of year....................... $15.40 $12.45 $13.86 $12.55 $10.28 $10.55 $12.07 $10.80 $13.14 $13.27
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net............. .46 .55 .49 .47 .51 .58 .50 .34 .27 .24
Net realized and unrealized gain
(loss) on investments............ __ 2.33 1.49 .60 .38 1.89 (.89) 2.63 .44 .58
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS. .46 2.88 1.98 1.07 .89 2.47 (.39) 2.97 .71 .82
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net.................... (.75) (.49) (.59) (.77) (.46) (.59) (.51) (.35) (.24) (.33)
Dividends from net realized
gain on investments.......... (2.66) (.98) (2.70) (2.57) (.16) (.36) (.37) (.28) (.34) (.66)
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
TOTAL DISTRIBUTIONS........... (3.41) (1.47) (3.29) (3.34) (.62) (.95) (.88) (.63) (.58) (.99)
------ ------ ------ ------ ------ ------ ------- ------ ------ -----
Net asset value, end of year. $12.45 $13.86 $12.55 $10.28 $10.55 $12.07 $10.80 $13.14 $13.27 $13.10
====== ====== ======= ====== ===== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN........ 3.22%* 25.07%* 16.32%* 8.62%* 8.74%* 23.64%* (3.33%) 28.02% 5.53% 6.36%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.................. .76% .75% .74% .71% .77% .75% .77% .78% .74% .74%
Ratio of net investment income
to average net assets.... 3.99% 4.24% 3.77% 3.51% 4.62% 4.73% 4.20% 2.65% 2.08% 1.67%
Portfolio Turnover Rate.. 50.30% 83.17% 149.07% 110.09% 179.38% 104.28% 98.58% 79.70% 55.42% 39.29%
Net Assets, end of year
(000's omitted)....... $1,921,992 $2,166,028$2,308,564 $2,369,023$2,262,433$2,536,151$2,525,321 $2,996,663$3,148,858 $2,850,523
- ----------------
* Exclusive of sales charge.
</TABLE>
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to
the address or calling the number contained on the cover page of this
Prospectus.
Page 2
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVES - The Fund's primary goal is to provide you with
long-term capital growth consistent with the preservation of capital.
Current income is a secondary but important goal. The Fund's investment
objectives cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. There can be no assurance that the Fund's
investment objectives will be achieved.
MANAGEMENT POLICIES - Depending on market conditions, the Fund
attempts to be fully invested in common stocks. If market conditions
warrant, the Fund may purchase fixed income securities such as preferred
stocks, bonds and debentures. For defensive purposes, the Fund may invest
in investment grade corporate bonds, securities issued or guaranteed as to
principal and interest by the U.S. Government or its agencies or
instrumentalities, high grade commercial paper, repurchase agreements,
bankers' acceptances, bank certificates of deposit or time deposits,
without limitation. The Fund may invest up to 20% of the value of its
assets in foreign securities which are not publicly traded in the United
States. By investing in foreign securities, the Fund seeks to further its
goal of capital growth.
The Fund will invest primarily in the securities of seasoned companies.
Although the Fund may invest up to 5% of its assets in new enterprises,
very few companies with an operating record of less than three years
would be considered appropriate for the Fund's portfolio. The Fund also
may purchase put and call options; however, in order to qualify the sale of
its shares in certain states, the Fund has undertaken that the aggregate
premiums paid for all such options held will not exceed 2% of the Fund's
net assets.
Securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Treasury Bills have
initial maturities of one year or less; Treasury Notes have initial
maturities of one to ten years; and Treasury Bonds generally have initial
maturities of greater than ten years. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities, for
example, Government National Mortgage Association pass-through
certificates, are supported by the full faith and credit of the U.S.
Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Principal and interest may fluctuate based on generally
recognized reference rates or the relationship of rates. While the U.S.
Government provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it will
always do so since it is not so obligated by law. The Fund will invest in
such securities only when the Fund is satisfied that the credit risk with
respect to the issuer is minimal.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price usually
not more than one week after its purchase. The Fund's custodian or
subcustodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter into
repurchase agreements only with domestic banks with total assets in
excess of one billion dollars or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. The Dreyfus Corporation
will monitor on an ongoing basis the value of the collateral to assure that
it always equals or exceeds the repurchase price. Certain costs may be
incurred by the Fund in connection with the sale of the securities if the
seller does not repurchase them in accordance with the repurchase
agreement. In addition, if bankruptcy proceedings are commenced
Page 3
with
respect to the seller of the securities, realization on the securities by the
Fund may be delayed or limited. The Fund will consider on an ongoing basis
the creditworthiness of the institutions with which it enters into
repurchase agreements.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
The Fund may purchase certificates of deposit, time deposits, bankers'
acceptances and other short-term obligations issued by domestic banks,
foreign subsidiaries of domestic banks, foreign branches of domestic
banks, and domestic and foreign branches of foreign banks and other
banking institutions. Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited with it for a
specified period of time. Time deposits are non-negotiable deposits
maintained in a banking institution for a specified period of time at a
stated interest rate. Time deposits which may be held by the Fund will not
benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation. Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer. These
instruments reflect the obligation both of the bank and of the drawer to
pay the face amount of the instrument upon maturity. Other short-term
obligations may include uninsured, direct obligations bearing fixed,
floating or variable rates of interest.
UNREGISTERED SECURITIES - The Fund may invest up to 10% 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. Such securities may include securities that are not
readily marketable such as certain securities that are subject to legal or
contractual restrictions or resale, and repurchase agreements providing
for settlement in more than seven days after notice. As to these
securities, the Fund is subject to a risk that should the Fund 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. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a lapse
of time between the Fund's decision to sell any such security and the
registration of the security permitting sale. During any such period, the
price of the securities will be subject to market fluctuations. However, if
a substantial market of qualified institutional buyers develops pursuant
to Rule 144A under the Securities Act of 1933, as amended, for certain
unregistered securities held by the Fund, the Fund intends to treat such
securities as liquid securities in accordance with procedures approved by
the Fund's Board of Directors. Because it is not possible to predict with
assurance how the market for restricted securities will develop, the
Fund's Board of Directors has directed The Dreyfus Corporation to monitor
carefully the Fund's investments in such securities with particular regard
to trading activity, availability of reliable price information and other
relevant information. To the extent that, for a period of time, qualified
institutional buyers cease purchasing restricted securities pursuant to
Rule 144A, the Fund's investing in such securities may have the effect of
increasing the level of illiquidity in the Fund's portfolio during such
period.
FOREIGN CURRENCY TRANSACTIONS - The Fund may engage in currency
exchange transactions either on a spot (i.e., cash) basis at the rate
prevailing in the currency exchange market, or through entering into
forward contracts to purchase or sell currencies. A forward currency
contract involves an obligation to purchase or sell a specific currency at a
future date, which must be more than two days from the date of the
contract, at a price set at the time of the contract. These contracts are
entered into in the interbank market conducted directly between currency
traders (typically commercial banks or other financial institutions) and
their customers.
LENDING PORTFOLIO SECURITIES - From time to time, the Fund may lend
securities from its portfolio to brokers, dealers and other institutional
investors needing to borrow securities to complete certain transactions.
Such loans may not exceed 10% of the value of the Fund's total assets. In
connection with such loans, the Fund will receive collateral consisting of
cash, U.S. Government securities or irrevocable letters of credit issued by
domestic financial institutions, which will be maintained at all times in
an amount equal to at least 100% of the current market value of the loaned
securities. The Fund can increase its income through the investment of
such collateral. The Fund continues to be entitled to payments in amounts
equal to the interest, dividends or
Page 4
other distributions payable on the
loaned securities and receives interest on the amount of the loan. Such
loans will be terminable 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.
CERTAIN FUNDAMENTAL POLICIES - The Fund may: (i) borrow money from
banks, but only for temporary or emergency (not leveraging) purposes, in
an amount up to 15% of the value of the Fund's total assets (including the
amount borrowed) valued at the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made.
While borrowings exceed 5% of the Fund's total assets, the Fund will not
make any additional investments; (ii) pledge, hypothecate, mortgage or
otherwise encumber its assets, but only to secure borrowings for
temporary or emergency purposes; (iii) invest up to 5% of its total assets
in the obligations of any one issuer, except that up to 25% of the value of
the Fund's total assets may be invested, and obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities may
be purchased, without regard to any such limitation; (iv) lend portfolio
securities to brokers, dealers or other institutional investors, provided
the aggregate value of the securities loaned does not exceed 10% of the
value of the Fund's total assets; and (v) invest up to 25% of the value of
its assets in any single industry. This paragraph describes fundamental
policies that cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See "Investment Objectives and Management
Policies-Investment Restrictions" in the Statement of Additional
Information.
RISK FACTORS
INVESTING IN FOREIGN SECURITIES - In making foreign investments, the
Fund will give appropriate consideration to the following factors, among
others.
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. In addition, there may be less publicly
available information about a non-U.S. issuer, and non-U.S. issuers
generally are not subject to uniform accounting and financial reporting
standards, practices and requirements comparable to those applicable to
U.S. issuers.
Because stock certificates and other evidences 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, possible seizure or nationalization of foreign
deposits and possible adoption of governmental restrictions which might
adversely affect the payment of principal and interest on the foreign
securities or might restrict the payment of principal and interest to
investors located outside the country of the issuer, whether from
currency blockage or otherwise. Custodial expenses for a portfolio of non-
U.S. securities generally are higher than for a portfolio of U.S. securities.
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. Some currency exchange
costs may be incurred when the Fund changes investments from one
country to another.
Furthermore, some of these securities may be subject to brokerage
taxes levied by foreign governments, which have the effect of increasing
the cost of such investment and reducing the realized gain or increasing
the realized loss on such securities at the time of sale. Income received
by the Fund from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax conventions
between certain countries and the United States, however, may reduce or
eliminate such taxes. All such taxes paid by the Fund will reduce its net
income available for distribution to shareholders.
FOREIGN CURRENCY EXCHANGE - 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 by U.S. or foreign governments or central
banks, or the failure to intervene, or by currency controls or political
developments in the U.S. or abroad.
page 5
The foreign currency market offers less protection against defaults in
the forward trading of currencies than is available when trading in
currencies occurs on an exchange. Since a forward currency contract is not
guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
OTHER INVESTMENT CONSIDERATIONS - Although the Fund invests for long-
term growth rather than short-term profits, a limited amount of short-
term trading can be expected in order to maintain a flexible portfolio
strategy. In addition, the possible need to realize cash for redemption of
Fund shares may make it necessary to sell securities even though such
sales would not otherwise be desirable from an investment standpoint.
Consequently, portfolio turnover may vary from year to year, as well as
within the year. Moreover, when extraordinary market conditions prevail,
investment strategy may shift rapidly, in which case high turnover rates
can be expected. During periods of high turnover rate, the Fund's brokerage
expenses increase.
Investment decisions for the Fund are made independently from those of
the other investment companies advised by The Dreyfus Corporation.
However, if such other investment companies are prepared to invest in, or
desire to dispose of, securities of the type in which the Fund invests at
the same time 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.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment
adviser. As of March 31, 1994, The Dreyfus Corporation managed or
administered approximately $74 billion in assets for more than 1.9
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. The Fund's primary investment officer is
Wolodymyr Wronskyj. He has held that position since 1989 and has been
employed by The Dreyfus Corporation since 1961. The Fund's other
investment officers are identified under "Management of the Fund" in the
Fund's Statement of Additional Information. The Dreyfus Corporation also
provides research services for the Fund as well as for other funds advised
by The Dreyfus Corporation through a professional staff of portfolio
managers and security analysts.
The Fund paid The Dreyfus Corporation a monthly management fee at the
annual rate of .62 of 1% of the value of the Fund's average daily net assets
for the fiscal year ended December 31, 1993. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect of
lowering the overall expense ratio of the Fund and increasing yield to
investors at the time such amounts are waived or assumed, as the case
may be. The Fund will not pay The Dreyfus Corporation at a later time for
any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume.
The Dreyfus Corporation may pay Dreyfus Service Corporation for
shareholder and distribution services from The Dreyfus Corporation's own
assets, including past profits but not including the management fee paid
by the Fund. Dreyfus Service Corporation may use part or all of such
payments to pay securities dealers or others in respect of these services.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are
not insured by the Federal Deposit Insurance Corporation.
Page 6
You can purchase Fund shares without a sales charge directly from
Dreyfus Service Corporation; you may be charged a nominal fee if you
effect transactions in Fund shares through a securities dealer, bank or
other financial institution. Share certificates are issued only upon your
written request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
The minimum initial investment is $2,500; subsequent investments
must be at least $100. The initial investment must be accompanied by the
Fund's Account Application. For full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries, directors of
The Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Fund's Board, or the spouse or
minor child of any of the foregoing, the minimum initial investment is
$1,000. For full-time or part-time employees of The Dreyfus Corporation
or any of its affiliates or subsidiaries who elect to have a portion of their
pay directly deposited into their Fund account, the minimum initial
investment is $50. In addition, the Fund reserves the right to offer Fund
shares without regard to minimum purchase requirements to employees
participating in certain qualified and non-qualified employee benefit plans
or other programs where contributions or account information can be
transmitted in a manner and form acceptable to the Fund. Fund shares also
are offered without regard to the minimum initial investment
requirements through the Dreyfus Step Program described under
"Shareholder Services." The Fund reserves the right to vary further the
initial and subsequent minimum investment requirements at any time.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable
to "The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open
new accounts which are mailed should be sent to The Dreyfus Family of
Funds, P.O. Box 9387, Providence, Rhode Island 02940-9387, together with
your Account Application. For subsequent investments, your Fund account
number should appear on the check and an investment slip should be
enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105, Newark,
New Jersey 07101-0105. For Dreyfus retirement plan accounts, both
initial and subsequent investments should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Neither initial nor subsequent investments should be made by third party
check. Purchase orders may be delivered in person only to a Dreyfus
Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank
having a correspondent bank in New York City. Immediately available funds
may be transmitted by wire to The Bank of New York, DDA
#8900051779/The Dreyfus Fund Incorporated, for purchase of Fund shares
in your name. The wire must include your Fund account number (for new
accounts, your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable. If your
initial purchase of Fund shares is by wire, please call 1-800-645-6561
after completing your wire payment to obtain your Fund account number.
Please include your Fund account number on the Fund's Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received.
You may obtain further information about remitting funds in this manner
from your bank. All payments should be made in U.S. dollars and, to avoid
fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear.
The Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House system to The Bank of New York with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and your Fund account number PRECEDED BY
THE DIGITS "1111."
Page 7
Dreyfus Service Corporation may pay dealers a fee of up to .5% of the
amount invested through such dealers in Fund shares by employees
participating in qualified and 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 Dreyfus Service Corporation to such
plans or programs exceeds one million dollars. All present holdings of
shares of funds in the Dreyfus Family of Funds by such employee benefit
plans or programs will be aggregated to determine the fee payable with
respect to each such purchase of Fund shares. Dreyfus Service Corporation
reserves the right to cease paying these fees at any time. Dreyfus Service
Corporation 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.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the
Transfer Agent or other Agent. 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. Net asset value per share is computed by
dividing the value of the Fund's net assets (i.e., the value of its assets
less liabilities) by the total number of shares outstanding. The Fund's
investments are valued based on market value or, where market quotations
are not readily available, based on fair value as determined in good faith
by the Board of Directors. For further information regarding the methods
employed in valuing Fund investments, see "Determination of Net Asset
Value" in the Fund's Statement of Additional Information.
If an order is received by the Transfer Agent 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 net asset
value determined as of such close of trading on that day. Otherwise, Fund
shares will be purchased at the net asset value determined as of such
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 a business day
and transmitted to Dreyfus Service Corporation by the close of its
business day (normally 5: 15 p.m., New York time) will be based on the net
asset value determined as of such close of trading on the New York Stock
Exchange on that day. Otherwise, the orders will be based on the next
determined net asset value. It is the responsibility of dealers to transmit
orders to Dreyfus Service Corporation on a timely basis.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject
you to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if you have
checked the appropriate box and supplied the necessary information on the
Fund's 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 member may be so designated. The Fund may
modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by calling 1-
800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE - The Exchange Privilege enables you to purchase, in
exchange for shares of the Fund, shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds have different
investment objectives which may be of
Page 8
interest to you. If you desire to
use this Privilege, you should consult Dreyfus Service Corporation to
determine if it is available and whether any conditions are imposed on its
use.
To use this Privilege, you must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. If you previously have
established the Telephone Exchange Privilege, you may telephone exchange
instructions by telephoning 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. See "How to Redeem Fund Shares-
Procedures." Before any exchange, you must obtain and should review a
copy of the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained from Dreyfus Service
Corporation. Except in the case of Personal Retirement Plans, the shares
exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must
have a value of at least the minimum initial investment required for the
fund into which the exchange is being made. Telephone exchanges may be
made only if the appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is on file
with the Transfer Agent. Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will automatically be carried over to the fund in which the
exchange is made: Exchange Privilege, Wire Redemption Privilege,
Telephone Redemption Privilege, Dreyfus TELETRANSFER Privilege and the
dividend/capital gain distribution option (except for Dreyfus Dividend
Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares from which you
are exchanging were: (a) purchased with a sales load, (b) acquired by a
previous exchange from shares of the fund purchased with a sales load, or
(c) acquired through reinvestment of dividends or distributions paid with
respect to the foregoing categories of shares. To qualify, at the time of
your exchange you must notify the Transfer Agent. Any such qualification
is subject to confirmation of your holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of Additional
Information. No fees currently are charged shareholders directly in
connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and Exchange
Commission. The Fund reserves the right to reject any exchange request in
whole or in part. The Exchange Privilege may be modified or terminated at
any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE __ Dreyfus Auto-Exchange Privilege
enables you to invest regularly (on a semi-monthly, monthly, quarterly or
annual basis), in exchange for shares of the Fund, in shares of other funds
in the Dreyfus Family of Funds of which you are currently an investor. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month according to the
schedule you have selected. Shares will be exchanged at the then-current
net asset value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder Services" in
the Statement of Additional Information. The right to exercise this
Privilege may be modified or cancelled by the Fund or the Transfer Agent.
You may modify or cancel your exercise of this Privilege at any time by
writing to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. The exchange of shares
of one fund for shares of another is treated for Federal income tax
purposes as a sale of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable gain or loss.
For more information concerning this Privilege and the funds in the
Dreyfus Family of Funds eligible to participate in this Privilege, or to
obtain a Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561.
Page 9
DREYFUS-AUTOMATIC ASSET BUILDER - 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. At your option, the bank account designated by you will
be debited in the specified amount, and Fund shares will be purchased,
once a month, on either the first or fifteenth day, or twice a month, on
both days. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may cancel your
participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company, Custodian, P.O.
Box 6427, Providence, Rhode Island 02940-6427, and the notification will
be effective three business days following receipt. The Fund may modify
or terminate this Privilege at any time or charge a service fee. No such
fee currently is contemplated.
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
Federal government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in Dreyfus
Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in the Privilege. The appropriate form may be obtained
from Dreyfus Service Corporation. Death or legal incapacity will
terminate your participation in the Privilege. You may elect at any time to
terminate your participation by notifying in writing the appropriate
Federal agency. Further, the Fund may terminate your participation upon
30 days' notice to you.
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 Automated
Clearing House 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. Your employer must complete the reverse
side of the form and return it to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may change the
amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not Dreyfus Service Corporation, The Dreyfus Corporation, the
Fund, the Transfer Agent or any other person, to arrange for transactions
under the Dreyfus Payroll Savings Plan. The Fund may modify or terminate
this Privilege at any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement
plans are not eligible for this Privilege.
DREYFUS STEP PROGRAM __ Dreyfus Step Program enables you to purchase
Fund shares without regard to the Fund's minimum initial investment
requirements through Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan. To
establish a Dreyfus Step Program account, you must supply the necessary
information on the Fund's Account Application and file the required
authorization form(s) with the Transfer Agent. For more information
concerning this Program, or to request the necessary authorization
form(s), please call toll free 1-800-782-6620. You may terminate your
participation in this Program at any time by discontinuing your
participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may
be, as provided under the terms of such Privilege(s). The Fund may modify
or terminate this Program at any time. Investors who wish to purchase
Fund shares through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs, SEP-IRAs and
IRA "Rollover Accounts." You should consider your financial condition and
the possibility of having to redeem your Fund shares in times of rising
prices or declining Fund share prices.
Page 10
AUTOMATIC WITHDRAWAL PLAN - The Automatic Withdrawal Plan permits
you to request withdrawal of a specified dollar amount (minimum of $20)
on either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be obtained
from Dreyfus Service Corporation. There is a service charge of 50 cents
for each withdrawal check. The Automatic Withdrawal Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Plan.
DREYFUS DIVIDEND OPTIONS - Dreyfus Dividend Sweep enables you to
invest automatically dividends or dividends and capital gain distributions,
if any, paid by the Fund in shares of another fund in the Dreyfus Family of
Funds of which you are a shareholder. Shares of the other fund will be
purchased at the then-current net asset value; however, a sales load may
be charged with respect to investments in shares of a fund sold with a
sales load. If you are investing in a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which
reflect a reduced sales load. If you are investing in a fund that charges a
contingent deferred sales charge, the shares purchased will be subject on
redemption to the contingent deferred sales charge, if any, applicable to
the purchased shares. See "Shareholder Services" in the Statement of
Additional Information. Dreyfus Dividend ACH permits a shareholder to
transfer electronically on the payment date their 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
Automated Clearing House member may be so designated. Banks may
charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 6527, Providence, Rhode Island 02940-6527.
Enrollment in or cancellation of these privileges is effective three
business days following receipt. These privileges are available only for
existing accounts and may not be used to open new accounts. Minimum
subsequent investments do not apply for Dreyfus Dividend Sweep. The Fund
may modify or terminate these privileges at any time or charge a service
fee. No such fee currently is contemplated. Shares held under Keogh Plans,
IRAs or other retirement plans are not eligible for these privileges.
RETIREMENT PLANS - The Fund offers a variety of pension and profit-
sharing plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan
support services also are available. You can obtain details on the various
plans by calling the following numbers: for Keogh Plans, please call 1-
800-358-5566; for IRAs and IRA "Rollover Accounts," please call 1-800-
645-6561; and for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7)
Plans, please call 1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value.
The Fund imposes no charges when shares are redeemed directly through
Dreyfus Service Corporation. Securities dealers, banks and other financial
institutions may charge a nominal fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed
may be more or less than their original cost, depending on the Fund's then-
current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-
AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR
DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT
BUSINESS DAYS OR MORE. IN
page 11
ADDITION, THE FUND WILL REJECT REQUESTS
TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER
RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS
TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET BUILDER
ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE
PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE
IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME
ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE
AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER
RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until
the Transfer Agent has received your Account Application.
PROCEDURES - You may redeem shares by using the regular redemption
procedure through the Transfer Agent, the Wire Redemption Privilege, the
Telephone Redemption Privilege or the Dreyfus TELETRANSFER Privilege,
or through certain securities dealers. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities.
If you select a telephone redemption or exchange privilege, you
authorize the Transfer Agent to act on telephone instructions from any
person representing himself or herself to be you and reasonably believed
by the Transfer Agent to be genuine. The Fund will require the Transfer
Agent to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that instructions are genuine and, if it
does not follow such procedures, the Fund or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of
these other redemption procedures may result in your redemption request
being processed at a later time than it would have been if telephone
redemption had been used. During the delay the Fund's net asset value may
fluctuate.
REGULAR REDEMPTION __ Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Redemption
requests may be delivered in person only to a Dreyfus Financial Center.
THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature
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. If you have any questions with respect to
signature-guarantees, please call the telephone number listed under
"General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE - You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank
if your bank is not a member. To establish the Wire Redemption Privilege,
you must check the appropriate box and supply the necessary information
on the Fund's Account Application or file a Shareholder Services Form
with the Transfer Agent. You may direct that redemption proceeds be paid
by check (maximum $150,000 per day) made out to the owners of record
and mailed to your address. Redemption proceeds of less than $1,000 will
be paid automatically by check. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of only up to $250,000 wired
within any 30-day period. You may telephone redemption requests by
calling 1-800-
Page 12
221-4060 or, if you are calling from overseas, call 1-401-
455-3306. The Fund reserves the right to refuse any redemption request,
including requests made shortly after a change in address, and may limit
the amount involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares held under Keogh Plans,
IRAs or other retirement plans, and shares for which certificates have
been issued, are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE __ You may redeem Fund shares
(maximum $150,000 per day) by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The redemption
proceeds will be paid by check and mailed to your address. You may
telephone redemption instructions by calling 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. The Fund reserves the
right to refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount involved or
the number of telephone redemption requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares
for which the certificates have been issued, are not eligible for this
Privilege.
DREYFUS TELETRANSFER PRIVILEGE - You may redeem Fund shares
(minimum $500 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between your Fund account and the
bank account designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an Automated
Clearing House member may be so designated. Redemption proceeds will be
on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request or, at your
request, paid by check (maximum $150,000 per day) and mailed to your
address. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account only up to $250,000 within any 30-day period. The Fund reserves
the right to refuse any request made by telephone, including requests
made shortly after a change of address, and may limit the amount involved
or the number of such requests. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to shareholders.
No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-
3306. Shares held under Keogh Plans, IRAs or other retirement plans, and
shares issued in certificate form, are not eligible for this Privilege.
REDEMPTION THROUGH DEALERS - Dreyfus Service Corporation will accept
orders from dealers with which it has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by
the dealer prior to the close of trading on the floor of the New York Stock
Exchange on any business day and transmitted to Dreyfus Service
Corporation 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 dealer to transmit orders on a timely basis. The
dealer may charge the shareholder a fee for executing the order. This
repurchase arrangement is discretionary and may be withdrawn at any
time.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment income
quarterly and distributes net realized securities gains, if any, once a year,
but it may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), in all events in a manner consistent with the
provisions of the Investment Company Act of 1940. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive dividends and distributions of securities gains in cash
or to reinvest such amounts in additional shares at net asset value. You
also may elect to receive only dividends and distributions of short-term
securities gains in cash and automatically reinvest all distributions of
long-term securities
Page 13
gains at net asset value. You may make these
elections by sending a written request to the Transfer Agent or, if you
have purchased shares through a securities dealer, by notifying your
dealer at the time the shares are purchased. All expenses are accrued
daily and deducted before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gain realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S.
shareholders as ordinary income whether received in cash or reinvested in
additional Fund shares. Depending upon the composition of the Fund's
income, a portion of the dividends from net investment income may
qualify for the dividends received deduction allowable to certain U.S.
corporations. Distributions from net realized long-term securities gains
of the Fund will be taxable to U.S. shareholders as long-term capital gains,
regardless of how long shareholders have held their Fund shares and
whether such distributions are received in cash or reinvested in additional
Fund shares. The Code provides that the net capital gains of an individual
generally will not be taxed at a rate in excess of 28%. Dividends and
distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gain realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless
the foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain
or loss may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains of the Fund and the
proceeds of any redemption, regardless of the extent to which gain or loss
may be realized, paid to a shareholder if such shareholder fails to certify
either that the TIN furnished in connection with opening an account is
correct, or that such shareholder has not received notice from the IRS of
being subject to backup withholding as a result of a failure to properly
report taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines a shareholder's TIN is incorrect or if a shareholder
has failed to properly report taxable dividend and interest income on a
Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended December 31, 1993 as a "regulated investment company"
under the Code. The Fund intends to continue to so qualify if such
qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income tax to
the extent its net investment income and realized capital gains are
distributed in accordance with applicable provisions of the Code. The Fund
is subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of taxable investment income and capital
gains.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes, if any.
PERFORMANCE INFORMATION
For purposes of advertising, performance will be calculated on the
basis of average annual total return. Advertisements may also include
performance calculated on the basis of total return.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased
with an initial payment of $1,000 and that the investment was redeemed
at
Page 14
the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return
is expressed as a percentage rate which, if applied on a compounded
annual basis, would result in the redeemable value of the investment at
the end of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for one, five and ten year
periods.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the net
asset value per share at the beginning of the period. Advertisements may
include the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type
and quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies using a different method of calculating performance.
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., the Dow Jones Industrial Average, Morningstar,
Inc., Standard & Poor's 500 Composite Stock Price Index and other
industry publications.
GENERAL INFORMATION
The Fund, a Maryland corporation incorporated on January 2, 1947, began
operations under its present name on May 24, 1951. The Fund is authorized
to issue 300 million shares of Capital Stock, par value $1 per share. Each
share has one vote.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year
the election of Directors or the appointment of auditors. However,
pursuant to the Fund's By-Laws, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Fund to hold a special
meeting of shareholders for the purpose of removing a Director from
office and the holders of at least 25% of such shares may require the Fund
to hold a special meeting of shareholders for any other purpose. Fund
shareholders may remove a Director by the affirmative vote of a majority
of the Fund's outstanding voting shares. In addition, the Board of Directors
will call a meeting of shareholders for the purpose of electing Directors
if, at any time, less than a majority of the Directors then holding office
have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561. In New York City, call 1-718-895-1206; on Long
Island, call 794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY
PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 15
DREYFUS
THE DREYFUS FUND
INCORPORATED
PROSPECTUS
(LION LOGO)
copyright Dreyfus Service Corporation, 1994
Distributor
THE DREYFUS FUND INCORPORATED
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 2, 1994
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of The Dreyfus Fund Incorporated (the "Fund"), dated May 2, 1994, as it may
be revised from time to time. To obtain a copy of the Fund's Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 794-5452
The Dreyfus Corporation (the "Manager") is the Fund's investment
adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies . . . . . . . .B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . .B-5
Management Agreement. . . . . . . . . . . . . . . . . . . . .B-8
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . .B-10
Redemption of Fund Shares . . . . . . . . . . . . . . . . . .B-11
Shareholder Services . . . . . . . . . . . . . . . . . . . .B-13
Determination of Net Asset Value. . . . . . . . . . . . . . .B-16
Dividends, Distributions and Taxes. . . . . . . . . . . . . .B-17
Portfolio Transactions. . . . . . . . . . . . . . . . . . . .B-18
Performance Information . . . . . . . . . . . . . . . . . . .B-19
Information About the Fund. . . . . . . . . . . . . . . . . .B-20
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . .B-21
Financial Statements. . . . . . . . . . . . . . . . . . . . .B-22
Report of Independent Auditors. . . . . . . . . . . . . . . .B-35
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund."
Investment Approach. Fund management is chiefly concerned with two
factors:
1. Individual Securities Values - These are determined through
fundamental studies of the relative worth and position of
individual companies.
2. Major Trends - These are evaluated through technical studies
which give a broad picture of overall market trends.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers or other institutional
investors, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral. For
the purposes of this policy, the Fund considers collateral consisting of
U.S. Government securities or irrevocable letters of credit issued by banks
whose securities meet the standards for investment by the Fund to be the
equivalent of cash. Such loans may not exceed 10% of the value of the
Fund's total assets. From time to time, the Fund may return to the
borrower and/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.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or
other distributions payable on the loaned securities, and any increase in
market value; (5) the Fund may pay only reasonable custodian fees in
connection with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board of Directors must
terminate the loan and regain the right to vote the securities if a
material event adversely affecting the investment occurs. These
requirements may be subject to future modification.
Investment Restrictions. The Fund has adopted the following investment
restrictions as fundamental policies. These restrictions cannot be changed
without approval by the holders of a majority (as defined in the Investment
Company Act of 1940 (the "Act")) of the Fund's outstanding voting shares.
The Fund may not:
1. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of its
total assets (including the amount borrowed) valued at the lesser
of cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made, nor pledge,
hypothecate, mortgage or otherwise encumber its assets, except to
secure borrowings for temporary or emergency purposes. While
borrowings exceed 5% of the value of the Fund's total
assets, the Fund will not make any additional investments.
2. Purchase any securities on margin.
3. Sell any securities short.
4. Lend any funds or other assets. This shall not prevent the
purchase of a portion of an issue of publicly distributed bonds,
debentures or other evidences of indebtedness of corporations, or
the purchase of bankers' acceptances and commercial paper of
corporations listed on the New York Stock Exchange or their
subsidiaries. However, the Fund may lend securities to
broker-dealers or other institutional investors, but only
when the borrower pledges cash collateral to the Fund and agrees
to maintain such collateral so that it amounts at all times to at
least 100% of the value of the securities loaned. Such loans
will not be made if, as a result, the aggregate value of the
securities loaned exceeds 10% of the value of the Fund's total
assets.
5. Participate in any underwriting or selling group in connection
with the public distribution of securities, except for its own
capital stock, nor enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid by virtue of legal or contractual
restrictions on resale or the absence of a readily available
market, if in the aggregate more than 10% of its net assets would
be so invested. The Board of Directors will in good faith
determine the specific types of securities deemed to be illiquid
and the value of such securities held in the Fund's portfolio.
6. Invest more than 5% of the market value of its net assets in the
securities of any one issuer, except that up to 25% of the value
of the Fund's total assets may be invested, and securities issued
or guaranteed by the U.S. Government, or its agencies or
instrumentalities may be purchased, without regard to such
limitation.
7. Hold more than 10% of the voting securities of any one issuer.
This restriction applies only with respect to 75% of the Fund's
total assets.
8. Purchase from or sell to any of its officers or directors, or
firms of which any of them are members, any securities (other
than capital stock of the Fund), but such persons or firms may
act as brokers for the Fund for customary commissions.
9. Retain securities of any issuer in which those officers or
directors of the Fund who beneficially own more than 1/2 of 1% of
the securities of the issuer together own more than 5% of the
securities of the issuer.
10. Purchase any securities issued by any investment company, except
in connection with a merger, consolidation, acquisition or
reorganization, if more than 10% of the market value of the
Fund's total assets would be invested in securities of other
investment companies, more than 5% of the market value of the
Fund's total assets would be invested in the securities
of any one investment company or the Fund would own more than 3%
of the total voting stock of any one investment company. This
limitation, however, shall not prevent the Fund from investing in
securities issued by a real estate investment trust, provided
that such trust is not permitted to invest in real estate or
interests in real estate other than mortgages or other security
interests.
11. Purchase the securities of any issuer the business of which has
been in continuous operation for less than three years if such
purchase would cause the Fund's investments in such issuers to
exceed 5% of the market value of the Fund's net assets.
12. Lease, acquire or hold real estate, except for office purposes.
This limitation, however, shall not prevent the Fund from
investing in securities issued by a real estate investment trust,
provided that such trust is not permitted to invest in real
estate or interests in real estate other than mortgages or other
security interests.
13. Purchase and sell commodities or commodity contracts.
14. Invest in the securities of a company for the purpose of
management or the exercise of control, but the Fund votes the
securities it owns in its portfolio as a shareholder in
accordance with its own views. The Manager may make
recommendations to portfolio companies on financial
and operating matters relevant to the conduct of their business
if the Manager believes it desirable to do so, in the best
interests of the Fund and for the protection of the value of the
Fund's investments.
15. Invest in a particular industry if any such investment would
result in the Fund holding more than 25% of the value of its
assets in any single industry.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values
or assets will not constitute a violation of that restriction.
In addition to the foregoing, while not a fundamental policy, the Fund
has
undertaken not to invest in oil, gas or mineral programs.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund (as defined in the Act) is indicated by an asterisk.
Directors and Officers of the Fund
*DAVID W. BURKE, Director. Vice President and Chief Administrative Officer
of the Manager since October 1990, and a director or trustee of other
investment companies advised and administered by the Manager. During
the period 1977 to 1990, Mr. Burke was involved in the management of
national television news, as Vice President and Executive Vice
President of ABC News, and subsequently as President of CBS News. His
address is 200 Park Avenue, New York, New York 10166.
LUCY WILSON BENSON, Director. President of Benson and Associates,
consultants to business and government. Mrs. Benson is a director of
Communications Satellite Corporation, General RE Corporation, The
Grumman Corporation and Logistics Management Institute. 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 a member of the Council on Foreign
Relations. Mrs. Benson served as a consultant to the U.S. Department
of State and to SRI International from 1980 to 1981. From 1977 to
1980, she was Under Secretary of State for Security Assistance,
Science and Technology. Her address is 46 Sunset Avenue, Amherst,
Massachusetts 01002.
MARTIN D. FIFE, Director. President of Fife Associates, Inc. and other
companies engaged in the chemical and plastics industries. His
address is 30 Rockefeller Plaza, New York, New York 10112.
WHITNEY I. GERARD, Director. Partner of the New York City law firm of
Chadbourne & Parke. His address is 30 Rockefeller Plaza, New York,
New York 10112.
ROBERT R. GLAUBER, Director. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University, since January 1992. Mr. Glauber was Under Secretary of
the Treasury for Finance at the U.S. Treasury Department from May 1989
to January 1992. For more than 5 years prior thereto, he was a
Professor of Finance at the Graduate School of Business Administration
of Harvard University and, from 1985 to 1989, Chairman of its Advanced
Management Program. His address is 79 John F. Kennedy Street,
Cambridge, Massachusetts 02138.
ARTHUR A. HARTMAN, Director. Senior consultant with APCO Associates Inc.
From 1981 to 1987, he was United States Ambassador to the former
Soviet Union. He is a director of the Hartford Insurance Group and
Ford Meter Box Corporation and a member of the advisory councils of
several other companies, research institutes and foundations. He is
President of the Harvard Board of Overseers. His address is 2738
McKinley Street, N.W., Washington, D.C. 20015.
GEORGE L. PERRY, Director. An economist and Senior Fellow at the Brookings
Institution since 1969. He is co-director of the Brookings Panel on
Economic Activity and editor of its journal, The Brookings Papers. He
is also a director of the State Farm Mutual Automobile Association,
State Farm Life Insurance Company and Federal Realty Investment Trust.
His address is 1775 Massachusetts Avenue, N.W., Washington,
D.C. 20036.
*HOWARD STEIN, Chairman of the Board and Investment Officer. Chairman of
the Board and Chief Executive Officer of the Manager, Chairman of the
Board of the Distributor and an officer, director, managing general
partner or trustee of other investment companies advised or
administered by the Manager. His address is 200 Park Avenue, New
York, New York 10166.
PAUL D. WOLFOWITZ, Director. Dean of The Paul H. Nitze School of Advanced
International Studies at Johns Hopkins University. From 1989 to 1993,
he was Under Secretary of Defense for Policy. From 1986 to 1989, he
was the U.S. Ambassador to the Republic of Indonesia. From 1982 to
1986, he was Assistant Secretary of State for East Asian and Pacific
Affairs of the Department of State. His address is 1740 Massachusetts
Avenue, N.W., Washington, D.C. 20036.
*WOLODYMYR WRONSKYJ, Director, President and Investment Officer. An
employee of the Manager and an officer of other investment companies
advised or administered by the Manager. His address is 200 Park
Avenue, New York, New York 10166.
The "non-interested" Directors are also directors of Dreyfus
California Municipal Income, Inc., Dreyfus Municipal Income, Inc., Dreyfus
New York Municipal Income, Inc., Dreyfus Short-Term Income Fund, Inc.,
Dreyfus Asset Allocation Fund, Inc., and The 401/K Fund, and trustees of
Dreyfus Short-Intermediate Municipal Bond Fund and Dreyfus Institutional
Short Term Treasury Fund. Each of the "non-interested" Directors, except
Mr. Glauber, is also a director of Dreyfus Liquid Assets, Inc., and
trustees of Dreyfus Short-Intermediate Government Fund. Each of the "non-
interested" Directors, except Mr. Wolfowitz, is also a director of Dreyfus
Worldwide Dollar Money Market Fund, Inc. Mrs. Benson also is a director of
The Dreyfus Third Century Fund, Inc. and The Dreyfus Socially Responsible
Growth Fund, Inc.
The Fund does not pay any remuneration to its officers and Directors
other than fees and expenses to Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totalled $51,215 for the year ended December 31, 1993
for all such Directors as a group.
Officers of the Fund Not Listed Above
MARK N. JACOBS, Vice President. Secretary and Deputy General Counsel of
the Manager and an officer of other investment companies advised or
administered by the Manager.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President--Mutual Fund
Accounting of the Manager and an officer of other investment companies
advised or administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
ROBERT F. DUBUSS, Assistant Treasurer. Vice President of the Manager and
Treasurer of the Distributor.
PAUL R. CASTI, JR., Controller. Senior Accounting Manager of the Fund
Accounting Department of the Manager and an officer of other
investment companies advised or administered by the Manager.
DANIEL C. MACLEAN, Secretary. Vice President and General Counsel of the
Manager, Secretary of the Distributor and an officer of other
investment companies advised or administered by the Manager.
ROBERT I. FRENKEL, Assistant Secretary. Senior Assistant General Counsel
of the Manager and an officer of other investment companies advised or
administered by the Manager.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Manager, the Distributor and other investment companies advised or
administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of Capital Stock outstanding on March 31, 1994.
The following persons are also officers and/or directors of the
Manager: Julian M. Smerling, Vice Chairman of the Board of Directors;
Joseph S. DiMartino, President, Chief Operating Officer and a director;
Alan M. Eisner, Vice President and Chief Financial Officer; Elie M.
Genadry, Vice President--Institutional Sales; Peter A. Santoriello, Vice
President; Robert H. Schmidt, Vice President; Kirk V. Stumpp, Vice
President -- New Product Development; Philip L. Toia, Vice President;
Katherine C. Wickham, Assistant Vice President -- Human Resources; Maurice
Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman, Lawrence
M. Greene, Abigail Q. McCarthy and David B. Truman, directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") with the Fund which is subject to annual
approval by (i) the Fund's Board of Directors or (ii) vote of a majority
(as defined in the Act) of the Fund's outstanding voting securities,
provided that in either event the continuance also is approved by a
majority of the Directors who are not "interested persons" (as defined in
the Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Fund's Board of
Directors, including a majority of the Directors who are not "interested
persons" (as defined in the Act) of any party to the Agreement, last voted
to renew the Agreement at a meeting held on May 3, 1993. Shareholders last
approved the Agreement on June 30, 1977. The Agreement is terminable upon
60 days' notice by either party and will terminate automatically in the
event of its assignment (as defined in the Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Directors. The Manager is responsible for investment decisions
and provides the Fund with Investment Officers who are authorized by the
Board of Directors to execute purchases and sales of securities. The
Fund's Investment Officers are Joseph S. DiMartino, Lawrence M. Greene,
Howard Stein and Wolodymyr Wronskyj. The Manager also maintains a research
department with a professional staff of portfolio managers and securities
analysts who provide research services for the Fund as well as for other
funds advised by the Manager. All purchases and sales are reported for the
Board of Directors' review at the meeting subsequent to such transactions.
The Manager pays the salaries of all officers and employees of the
Fund who are employed by both it and the Fund and furnishes, among other
things, office facilities, statistical and research data, clerical help,
accounting, data processing, bookkeeping, internal auditing services and
certain other required services. The Manager also may make such
advertising and promotional expenditures, using its own resources, as it
from time to time deems appropriate.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, advisory fees, state
Blue Sky qualification fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of maintaining corporate
existence, costs of independent pricing services, costs attributable to
investor services (including, without limitation, telephone and personnel
expenses), costs of shareholders' reports and corporate meetings, costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to existing
shareholders, and any extraordinary expenses.
As compensation for its services, the Fund has agreed to pay the
Manager an annual fee, payable monthly, as follows:
Annual Fee Average Daily Net Assets
.65 of 1% of the first $1.5 billion
.625 of 1% between $1.5 billion and $2.0 billion
.60 of 1% between $2.0 billion and $2.5 billion
.55 of 1% over $2.5 billion
The Agreement also provides that if the aggregate expenses of the
Fund, exclusive of taxes and brokerage commissions but including the
management fee, exceed 1% of the value of the Fund's average daily net
assets for any full fiscal year, the Manager will bear such expenses or
refund to the Fund the amount of such excess. No expense reimbursement was
required for the last three fiscal years.
The management fees paid by the Fund to the Manager for the fiscal
years ended December 31, 1991, 1992 and 1993 amounted to $16,578,976,
$17,847,268 and $18,514,648, respectively.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 a.m. and 4:00 p.m., New York time, on
any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To qualify to
use the Dreyfus TeleTransfer Privilege, the initial payment for purchase of
Fund 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 "Redemption of Fund
Shares--Dreyfus TeleTransfer Privilege."
Sales and Other Charges. There is no sales or service charge by
the Fund or the Distributor, although investment dealers, banks and other
institutions may make reasonable charges to investors for their services.
The services provided and the applicable fees are established by each
dealer or other institution acting independently of the Fund. The Fund has
been given to understand that fees may be charged for customer services
including, but not limited to, same-day investment of client funds;
same-day access to client funds; advice to customers about the status of
their accounts, yield currently being paid or income earned to date;
provision of periodic account statements showing security and money market
positions; other services available from the dealer, bank or other
institution; and assistance with inquiries related to their investment.
Any such fees will be deducted from the investor's account monthly and on
smaller accounts could constitute a substantial portion of the
distribution. Small, inactive, long-term accounts involving monthly
service charges may not be in the best interest of investors. Investors
should be aware that they may purchase shares of the Fund directly from the
Fund without imposition of any maintenance or service charges, other than
those already described herein. In some states, banks or other
institutions effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.
Maintenance expenses of a Fund account are presently borne by the
Fund, although the Fund reserves the right, upon not less than 90 days'
notice, to charge shareholders a nominal fee for such maintenance expenses.
During the 90-day notice period, a shareholder would be able to withdraw
shares without charge.
Reopening an Account. An investor 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.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege
on the next business day after receipt if the Transfer Agent receives the
redemption request in proper form. Redemption proceeds will be transferred
by Federal Reserve wire only to the commercial bank account specified by
the investor on the Account Application or Shareholder Services Form.
Redemption proceeds, if wired, must be in the amount of $1,000 or more and
will be wired to the investor's account at the bank of record designated in
the investor's file at the Transfer Agent, if the investor's bank is a
member of the Federal Reserve System, or to a correspondent bank if the
investor's bank is not a member. Fees ordinarily are imposed by such bank
and usually are borne by the investor. Immediate notification by the
correspondent bank to the investor's bank is necessary to avoid a delay in
crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment 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
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should inform the operator of the
Transfer Agent's answer back sign.
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 "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have also selected the Dreyfus TeleTransfer Privilege, any request for
a wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any stock 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 one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, 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 and is a fundamental policy of the Fund which may not be changed
without shareholder approval. In the case of requests for redemption in
excess of such amount, the Board of Directors reserves the right to make
payments in whole or in part in securities or other assets of the Fund 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 Redemption. 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 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
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Exchange Privilege. 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 that are offered without a sales
load will be made 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"), provided that, 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.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account number.
To use this Privilege, a shareholder must give exchange instructions
to the Transfer Agent in writing, by wire or by telephone. Telephone
exchanges may be made only if the appropriate "YES" box has been checked on
the Account Application, or a separate signed Shareholder Services Form is
on file with the Transfer Agent. By using this Privilege, the investor
authorizes the Transfer Agent to act on exchange instructions from any
person representing himself or herself to be the investor, 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 exchanges.
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.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in Corporate Plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value
of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of another fund in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under "Exchange
Privilege." Enrollment in or modification or cancellation of this Privilege
is effective three business days following notification by the investor.
An investor will be notified if his account falls below the amount
designated to be exchanged under this Privilege. In this case, an
investor's 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 and other retirement plans are eligible
for this Privilege. Exchanges of IRA shares may be made between IRA
accounts 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.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Dreyfus Auto-
Exchange Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $20) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. An Automatic Withdrawal Plan may be established by completing
the appropriate application available from the Distributor. There is a
service charge of $.50 for each withdrawal check. Automatic Withdrawal may
be terminated at any time by the investor, the Fund or the Transfer Agent.
Shares for which stock certificates have been issued may not be redeemed
through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on the payment date their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is 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 the Fund may be invested
without imposition of a sales load in shares of other funds that
are 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
the sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, 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 contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan. In
addition, the Fund makes available Keogh Plans, IRAs, SEP-IRAs and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support services are also
available. Investors can obtain details on the various plans by calling
the following numbers toll free: for Keogh Plans, please call 1-800-358-
5566; for IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; and
for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please
call 1-800-322-7880.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, 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 forms.
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.
The minimum initial investment for corporate plans, salary reduction
plans, 403(b)(7) Plans and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans, with only one participant, is ordinarily $750 with no minimum on
subsequent purchases. Individuals who open an IRA may also open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plans and the form
of Custodial Agreement for further details as to eligibility, service fees
and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. Portfolio securities are valued at
the last sale price on the securities exchange or national securities
market on which such securities are primarily 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 recently
reported bid and asked prices. Bid price is used when no asked price is
available. Options are valued at the last sale price on an exchange.
Options for which there were no transactions are valued at the average of
the most recently reported bid and asked prices. Market quotations of
foreign securities in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Any securities or other assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors. Expenses and fees,
including the management fee, reduced by the expense limitation, if any,
are accrued daily and taken into account for the purpose of determining the
net asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund qualified for the fiscal year ended
December 31, 1993 as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended (the "Code"). The Fund intends to
continue to so qualify if such qualification is in the best interests of
its shareholders. Such qualification relieves the Fund of any liability
for Federal income taxes to the extent its net investment income and net
realized capital gains are distributed in accordance with the applicable
provisions of the Code. The term "regulated investment company" does not
imply the supervision of management or investment practices or policies by
any government agency.
Depending upon the composition of the Fund's income, the entire amount
or a portion of the dividends from net investment income may qualify for
the dividends received deduction allowable to qualifying U.S. corporate
shareholders ("dividends received deduction"). In general, dividend income
of the Fund distributed to its qualifying corporate shareholders will be
eligible for the dividends received deduction only to the extent that (i)
the Fund's income consists of dividends paid by U.S. corporations and (ii)
the Fund would have been entitled to the dividends received deduction with
respect to such dividend income if the Fund were not a regulated investment
company. The dividends received deduction for qualifying corporate
shareholders may be further reduced if the shares of the Fund held by them
with respect to which dividends are received are treated as debt-financed
or deemed to have been held for less than 46 days. In addition, the Code
provides other limitations with respect to the ability of a qualifying
corporate shareholder to claim the dividends received deduction in
connection with holding Fund shares.
The Code provides that if a shareholder holds shares of the Fund for
six months (or such shorter period as the Internal Revenue Service may
prescribe by regulation) 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 addition, any dividend or distribution paid
shortly after an investor's purchase may have the effect of reducing the
net asset value of the shares below the cost of the investment. Such a
distribution would be a return on investment in an economic sense although
taxable as described above.
Ordinarily, gains or losses realized from portfolio transactions will
be treated as capital gains or losses. However, a portion of the gain or
loss realized from the disposition of certain non-U.S. dollar denominated
securities (including debt instruments, certain forward and option
transactions and certain preferred stock) may be treated as ordinary income
or loss under Section 988 of the Code. In addition, all or a portion of
the gain realized from the disposition of certain market discount bonds
will be treated as ordinary income under Section 1276. Finally, all or a
portion of the gains realized from engaging in "conversion transactions"
may be treated as ordinary income under Section 1258. "Conversion
transactions" are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce capital
gains, or transactions described in Treasury regulations to be issued in
the future.
Under Section 1256 of the Code, gain or loss the Fund realizes from
certain foreign currency forward contracts and options transactions, other
than those subject to Section 988 of the Code, 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 such contracts and
options as well as from closing transactions. In addition, any such
contracts or options 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 foreign currency
forward contracts or options may be considered, for tax purposes, to
constitute "straddles." "Straddles" are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
"straddles" is governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of Sections
1256 and 988. As such, all or a portion of any short or long-term capital
gain from certain "Straddle" and/or conversion transactions may be
recharacterized to ordinary income.
If the Fund were treated as entering into "straddles" by reason of its
engaging in forward contracts or options transactions, such "straddles"
would be characterized as "mixed straddles" if the forward contracts or
options transactions comprising a part of such "straddles" were governed by
Section 1256 of the Code. The Fund may make one or more elections with
respect to "mixed straddles." If no election is made, to the extent the
"straddle" rules apply to positions established by the Fund, losses
realized by the Fund will be deferred to the extent of unrealized gain in
any related offsetting position. Moreover, as a result of the "straddle"
and conversion transaction rules, short-term capital loss on "straddle"
positions may be recharacterized as long-term capital loss, and long-term
capital gain may be treated as short-term capital gain or ordinary income.
PORTFOLIO TRANSACTIONS
The Manager supervises the placement of orders on behalf of the Fund
for the purchase or sale of portfolio securities. Allocation of brokerage
transactions, including their frequency, is made according to the best
judgment of the Manager and the Fund's Investment Officers and in a manner
deemed fair and reasonable to the shareholders. The primary consideration
is prompt and effective execution of orders at the most favorable net
price. Subject to this consideration, the brokers selected 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 fee is not reduced as a
consequence of the receipt of such supplemental information. Such
information may be useful to the Manager in serving both the Fund and other
funds which 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 obligation to the Fund. Brokers also will be selected
for their ability to handle special executions, such as are involved in
large block trades or broad distributions, provided the primary con-
sideration is met. Large block trades may, in certain cases, result from
two or more funds in the Dreyfus Family of Funds being engaged
simultaneously in the purchase or sale of the same security. 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. When transactions are executed in the over-the-counter market,
the Fund will deal with the primary market makers unless a more favorable
price is otherwise obtainable.
In connection with its portfolio securities transactions for 1991,
1992 and 1993 the Fund paid brokerage commissions of $3,050,425,
$1,980,626, and $2,968,900, respectively, none of which was paid to the
Distributor. The above figures for brokerage commissions paid do not
include gross spreads and concessions on principal transactions, which,
where determinable, amounted to $4,029,400, $3,084,285 and $348,000 in
1991, 1992, and 1993, respectively, none of which was paid to the
Distributor.
Daiwa Securities Co., Ltd. ("Daiwa") is a Japanese securities firm
which, since 1973, has acted as a principal underwriter of the Fund in
connection with the exclusive distribution of Fund shares in Japan. In
1993, Daiwa purchased shares from the Fund for $11,610,345 (aggregate net
asset value) for distribution in Japan. Daiwa received $129,978 and $350,
respectively, of the brokerage commissions paid by the Fund in 1991 and
1993, respectively. Daiwa received no brokerage commissions in 1992.
The Fund's investment policy, which stresses flexibility, may result
in more trading of securities than would be the case for a fund with more
restricted investment policies, although the Fund's portfolio turnover rate
generally should not exceed 100%. Portfolio turnover rates for 1992 and
1993 were 55.42% and 39.29%, respectively.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
The Fund's average annual total return for the 1, 5 and 10 year
periods ended December 31, 1993 was 6.36%, 11.42% and 11.78%,
respectively. Average annual total return is calculated by determining the
ending redeemable value of an investment purchased 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.
The Fund's total return for the period May 24, 1951 to December 31,
1993 was 14,514.79%. Total return is calculated by subtracting the amount
of the Fund's net asset value 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 dividing the result by the net asset value per share at the
beginning of the period.
From time to time, advertising materials for the Fund may provide
historical information about the Fund or the Manager such as: the
aggregate size of the Fund's assets for the number of shareholder accounts
in the Fund at various points in time; causes for the Fund's growth in
assets during various time periods; portfolio philosophy and practices
utilized in managing the Fund's assets; past promotional efforts on behalf
of the Fund such as the use of the "Dreyfus Lion" as a logo or the "Dreyfus
Lion/Subway" television commercial; biographical information about Jack J.
Dreyfus, Jr., the Fund's first President at its inception in May 1951; the
public offering of shares of the Manager in 1965; the public awareness of
the concept of growth funds at the time of the Fund's inception; or the
role played by Jack J. Dreyfus, Jr. and/or the Fund in popularizing the
concept of mutual funds as an investment vehicle or the growth of assets in
the mutual fund industry since the Fund's inception.
From time to time, advertising materials for the Fund may refer to or
discuss current or past business, political, economic or financial
conditions, such as any U.S. monetary or fiscal policies that may result
from a new President being elected. In addition, from time to time,
advertising materials for the Fund may include information concerning
retirement and investing for retirement.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote, and when issued and paid for in
accordance with the terms of the offering, is fully paid and nonassessable.
Fund shares are of one class and have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
acts as custodian of the Fund's investments. The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's transfer and dividend
disbursing agent. Neither The Bank of New York nor The Shareholder
Services Group, Inc. has any part in determining the investment policies of
the Fund or which portfolio securities are to be purchased or sold by the
Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of Capital Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young, independent auditors, 787 Seventh Avenue, New York, New
York 10019, have been selected as independent auditors of the Fund.
COMMON STOCK
PURCHASES AND SALES
six months ended December 31, 1993
PURCHASES(1)
NEW COMMITMENTS:
Advanced Micro Devices, Chemical Banking, First Chicago, Galen Partners
II L.P. (Units), Intel, Masco, Primerica, Sun Microsystems, TRW, Union Texas
Petroleum, Varity, Wells Fargo and Whirlpool.
ADDITIONS:
Canadian Gas Gathering Systems Cl. A, Chrysler, First Union, GE
Investment Private Placement Partners I L.P. (Units), Mead and SGK Equity Fund
L.P. (Units).
SALES
REDUCTIONS:
MCI Communications, Philip Morris, Seagram and Yorktown Energy Partners
L.P. (Units).
ELIMINATIONS:
Anheuser-Busch, Baxter International, Dillard Department Stores Cl. A,
duPont (E.I.) de Nemours, K mart, NIKE Cl. B, Reebok International, Triton
Energy, V. F., Weyerhaeuser and Woolworth Corp.
(1) Not shown are increases resulting from stock dividends and splits.
<PAGE>
- --------------------------------------------------------------------------------
COMMON STOCK PURCHASES AND SALES
six months ended December 31, 1993
PURCHASES (1)
New Commitments:
Advanced Micro Devices, Chemical Banking, First Chicago, Galen Partners
II L.P. (Units), Intel, Masco, Primerica, Sun Microsystems, TRW, Union Texas
Petroleum, Varity, Wells Fargo and Whirlpool.
Additions:
Canadian Gas Gathering Systems Cl. A, Chrysler, First Union,
GE Investment Private Placement Partners I L.P. (Units), Mead and SGK Equity
Fund L.P. (Units).
SALES
Reductions:
MCI Communications, Phillip Morris, Seagram and Yorktown Energy
Partners L.P. (Units).
Eliminations:
Anheuser-Busch, Baxter International, Dillard Department Stores Cl. A,
duPont (e.I.) de Nemours, K mart, NIKE Cl. B, Reebok International, Triton
Energy, V.F.; Weyerhaeuser and Woolworth Corp.
(1) Not shown are increases resulting from stock dividends and splits.
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS December 31, 1993
<TABLE>
<CAPTION>
COMMON STOCKS--85.5% SHARES VALUE
------------ --------------
<C> <S> <C> <C>
BASIC INDUSTRIES--2.5% Kimberly-Clark............................. 600,000 $ 31,125,000
Mead....................................... 500,000 22,500,000
SGK Equity Fund, L.P. (Units).............. 15.982(e) 15,896,064
--------------
69,521,064
--------------
CAPITAL GOODS--3.7% Eaton...................................... 500,000 25,250,000
General Electric........................... 545,000 57,156,875
Varity..................................... 500,000(a) 22,375,000
--------------
104,781,875
--------------
CONGLOMERATES--3.0% Dial....................................... 1,000,000 40,375,000
ITT........................................ 500,000 45,625,000
--------------
86,000,000
--------------
CONSUMER CYCLICAL--12.8% Chrysler................................... 1,500,000 79,875,000
Dana....................................... 500,000 29,937,500
Eastman Kodak.............................. 750,000 42,000,000
Ford Motor................................. 800,000 51,600,000
Fruit of The Loom, Cl. A................... 700,000(a) 16,887,500
Goodyear Tire & Rubber..................... 600,000 27,450,000
Penney (J.C.).............................. 400,000 20,950,000
Polaroid................................... 600,000 20,250,000
Sears, Roebuck............................. 700,000 36,925,000
Wal-Mart Stores............................ 500,000 12,500,000
Whirlpool.................................. 400,000 26,600,000
--------------
364,975,000
--------------
CONSUMER GROWTH STAPLES--9.1% Caremark International..................... 250,000 4,906,250
Galen Partners II, L.P. (Units)............ 2.086(e) 2,086,224
Gillette................................... 800,000 47,700,000
Mattel..................................... 1,000,000 27,625,000
McDonald's................................. 1,000,000 57,000,000
PepsiCo.................................... 1,525,000 62,334,375
Roche Holdings A.D.S....................... 1,140,000(b) 48,307,500
Toys R Us.................................. 250,000(a) 10,218,750
--------------
260,178,099
--------------
CONSUMER STAPLES--14.4% American Brands............................ 800,000 26,600,000
Campbell Soup.............................. 595,000 24,395,000
Clorox..................................... 300,000 16,275,000
Colgate-Palmolive.......................... 1,176,000 73,353,000
ConAgra.................................... 500,000 13,187,500
CPC International.......................... 801,000 38,147,625
General Mills.............................. 600,000 36,450,000
Melville................................... 500,000 20,312,500
Philip Morris.............................. 1,000,000 55,750,000
Procter & Gamble........................... 1,000,000 57,000,000
RJR Nabisco Holdings....................... 3,012,400(a) 19,204,050
Seagram.................................... 1,133,200 29,604,850
--------------
410,279,525
--------------
<PAGE>
</TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1993
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ --------------
<C> <S> <C> <C>
CREDIT CYCLICAL--3.5% Centex..................................... 460,000 $ 19,320,000
Lowe's..................................... 1,000,000 59,250,000
Masco...................................... 600,000 22,200,000
--------------
100,770,000
--------------
ENERGY--1.1% Canadian Gas Gathering Systems, Cl. A...... 244,511(e) 2,445,110
GE Investment Private Placement
Partners I, L.P. (Units)........... 12.357(e) 12,363,142
Union Texas Petroleum...................... 500,000 10,187,500
Yorktown Energy Partners, L.P. (Units)..... 6.357(e) 6,419,841
--------------
31,415,593
--------------
FINANCIAL--18.0% AMBAC...................................... 1,250,000 52,500,000
Banc One................................... 349,463 13,672,769
Bank of New York........................... 800,000 45,600,000
Bankers Trust New York..................... 203,700 16,117,763
Chase Manhattan (Warrants)................. 11,772(a) 95,647
Chemical Banking........................... 500,000 20,062,500
Continental Bank........................... 800,000 21,100,000
Dean-Witter, Discover...................... 373,217 12,922,639
EXEL Limited............................... 493,000 21,876,875
First Chicago.............................. 400,000 17,300,000
First Data................................. 800,000 32,600,000
First Financial Management................. 500,000 28,375,000
First Union................................ 500,000 20,625,000
GFC Financial.............................. 650,000 18,850,000
MBNA....................................... 1,500,000 50,062,500
Mellon Bank................................ 983,100 52,104,300
NationsBank................................ 500,000 24,500,000
Primerica.................................. 666,666 25,916,667
Shawmut National........................... 600,000 13,050,000
Wells Fargo................................ 200,000 25,875,000
--------------
513,206,660
--------------
TECHNOLOGY--6.7% Advanced Micro Devices..................... 500,000(a) 8,875,000
Hewlett-Packard............................ 600,000 47,400,000
Intel...................................... 500,000 31,000,000
MCI Communications......................... 1,025,000 28,956,250
Sprint..................................... 950,000 33,012,500
Sun Microsystems........................... 500,000(a) 14,562,500
TRW........................................ 400,000 27,700,000
--------------
191,506,250
--------------
TRANSPORTATION--9.4% Burlington Northern........................ 700,000 40,512,500
CSX........................................ 600,000 48,600,000
Conrail.................................... 1,140,000 76,237,500
Illinois Central........................... 1,000,000 35,875,000
Norfolk Southern........................... 500,000 35,250,000
Union Pacific.............................. 500,000 31,312,500
--------------
267,787,500
--------------
<PAGE>
</TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1993
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ --------------
<C> <S> <C> <C>
UTILITIES--1.3% American Telephone & Telegraph............. 700,000 $ 36,750,000
--------------
TOTAL COMMON STOCKS
(cost $1,752,459,350).............. $2,437,171,566
--------------
--------------
CONVERTIBILE PREFERRED
STOCK--.2%
USF&G, Ser. B, Cum., $10.25
(cost $4,925,000).................. 50,000(e) $ 7,053,008
--------------
--------------
<CAPTION>
PRINCIPAL
AMOUNT
SUBJECT TO
CALL
------------
<C> <S> <C> <C>
CALL OPTIONS--.6% Bundesobligationen;
6 5/8%, 1/20/1998, April '94 @
$58.42.............................. $ 8,625,647(c,e) $ 360,552
Bundesrepublik Deutschland:
6 1/2%, 7/15/2003, October '94 @
$59.15.............................. 189,764,232(c,e) 5,522,139
6 1/2%, 7/15/2003, October '94 @
$59.96.............................. 94,882,116(c,e) 1,527,602
6%, 9/15/2003, June '94 @ $58.68... 97,757,332(c,e) 2,140,886
Obligations Assimilables du Tresor;
6 3/4%, 10/25/2003, June '94 @
$18.04.............................. 98,022,647(d,e) 2,411,357
<CAPTION>
CONTRACTS
SUBJECT TO
CALL
------------
<C> <S> <C> <C>
German Stocks Bank Baskets:
October '94 @ $2,510.06............ 7,450(c,e) 1,884,991
October '94 @ $2,497.99............ 5,650(c,e) 1,494,538
October '94 @ $2,484.19............ 5,640(c,e) 1,540,538
--------------
TOTAL CALL OPTIONS
(cost $12,363,018)................. $ 16,882,603
--------------
--------------
<CAPTION>
PRINCIPAL
AMOUNT
------------
<C> <S> <C> <C>
CORPORATE BONDS--.3% Canadian Gas Gathering Systems:
14%, 8/29/2005..................... $ 187,500(e) $ 187,500
14%, 10/31/2005.................... 187,500(e) 187,500
14%, 7/24/2006..................... 531,633(e) 531,633
14%, 12/10/2006.................... 2,184,406(e) 2,184,406
14%, 4/8/2007...................... 549,478(e) 549,478
14%, 11/17/2007.................... 1,683,276(e) 1,683,276
14%, 6/30/2008..................... 1,930,747(e) 1,930,747
14%, 12/29/2008.................... 112,831(e) 112,831
--------------
TOTAL CORPORATE BONDS
(cost $7,367,371).................. $ 7,367,371
--------------
--------------
SHORT-TERM INVESTMENTS--13.3%
TIME DEPOSITS--3.7% Republic National Bank of New York (London)
2 3/8%, 1/3/94..................... $104,000,000 $ 104,000,000
--------------
REPURCHASE AGREEMENT--3.5% Kidder Peabody & Co.,
2 1/2%, (collateralized by U.S.
Treasury Bills
due 11/17/94 and U.S. Treasury
Notes 4 1/4% due 7/31/94)........... 100,000,000 100,000,000
--------------
<PAGE>
</TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ --------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY--6.1% U.S. Treasury Bill;
3.12%, 3/3/94...................... $175,000,000 $ 174,077,799
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $378,077,799)................ $ 378,077,799
--------------
--------------
TOTAL INVESTMENTS (cost $2,155,192,538)....................................... 99.9% $2,846,552,347
------- --------------
------- --------------
CASH AND RECEIVABLES (NET).................................................... .1% $ 3,970,758
------- --------------
------- --------------
NET ASSETS.................................................................... 100.0% $2,850,523,105
------- --------------
------- --------------
<FN>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the year
end, this security amounted to 1.69% of net assets.
(c) Denominated in Deutsche Marks.
(d) Denominated in French Francs.
(e) Securities restricted as to public resale. Investments in restricted
securities with an aggregate market value of $70,513,363, represent
approximately 2.47% of net assets:
</TABLE>
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE* NET ASSETS VALUATION+
<S> <C> <C> <C> <C> <C>
___________ ---------------------- ------------- ------------- -------------------------
Bundesobligationen;
6 5/8%, 1/20/1998,
April '94 @ $58.42 4/27/93 $ .89 .01% $ 2.40
Bundesrepublik Deutschland:
6 1/2%, 7/15/2003,
October '94 @ $59.15 10/4/93 1.05 .19 1.67
6 1/2%, 7/15/2003,
October '94 @ $59.96 10/26/93 .89 .05 0.93
6%, 9/15/2003,
June '94 @ $58.68 12/13/93 .74 .07 1.26
Canadian Gas Gathering
Systems, Cl. A 8/29/90 - 12/29/93 10.00 .09 10.00 per share
Canadian Gas
Gathering Systems 14%:
8/29/2005 - 12/29/2008 8/29/90 - 12/29/93 100.00 .27 par
German Stocks Bank Baskets:
October '94 @ $2,510.06 10/20/93 233.05 .07 253.02
October '94 @ $2,497.99 10/19/93 233.17 .05 264.52
October '94 @ $2,484.19 10/18/93 233.15 .05 273.15
GE Investment
Private Placement
Partners I, L.P. (Units) 5/28/91 - 10/14/93 1,000,497.05 .43 1,000,497.05 per unit
Galen Partners II, L.P.
(Units) 12/8/93 1,000,107.38 .07 1,000,107.38 per unit
Obligations Assimilables du Tresor;
6 3/4%, 10/25/2003,
June '94 @ $18.04 12/13/93 .29 .08 0.42
</TABLE>
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) December 31, 1993
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE* NET ASSETS VALUATION+
____________ ---------------------- ------------- ------------- -------------------------
<S> <C> <C> <C> <C> <C>
SGK Equity Fund, L.P.
(Units) 12/16/92 - 9/17/93 $ 994,622.95 .56% $ 994,622.95 per unit
USF&G, Ser. B, Cum. $10.25 6/3/91 98.50 .25 141.06 per share
Yorktown Energy
Partners, L.P.
(Units) 3/25/91 - 4/26/93 1,003,100.16 .23 1,003,100.16 per unit
<FN>
*Average cost.
+The valuation of these securities has been determined in good faith under the
direction of the Board of Directors.
</TABLE>
- ------------------------------------------------------------------------
Subject to certain limitations, the Fund has commitments to invest in the
securities and limited partnerships listed below:
<TABLE>
<CAPTION>
PORTION OF COMMITTED
ISSUER AMOUNTS UNINVESTED
<S> <C>
_____________ --------------------
Canadian Gas Gathering Systems $ 150,441
GE Investment Private Placement Partners I, L.P. (Units) 7,636,858
Galen Partners II, L.P. (Units) 2,913,776
SGK Equity Fund, L.P. (Units) 34,103,936
Yorktown Energy Partners, L.P. (Units) 3,580,159
</TABLE>
See notes to financial statements.
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF
ASSETS AND LIABILITIES
December 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $2,155,192,538)--see statement........... $2,846,552,347
Cash.................................................... 718,585
Receivable for investment securities sold............... 17,105,104
Dividends and interest receivable....................... 6,905,025
Receivable for subscriptions to Capital Stock........... 1,955,872
Net unrealized appreciation on forward currency exchange
contracts--Note 3(a)........................... 718,706
Prepaid expenses and other assets....................... 832,907
--------------
2,874,788,546
LIABILITIES:
Due to The Dreyfus Corporation.......................... $ 1,521,705
Payable for Capital Stock redeemed...................... 21,869,371
Accrued expenses........................................ 874,365 24,265,441
----------- --------------
NET ASSETS....................................................... $2,850,523,105
--------------
--------------
REPRESENTED BY:
Paid-in capital......................................... $2,150,438,114
Accumulated undistributed net realized gain on
investments........................................... 8,006,476
Accumulated net unrealized appreciation on
investments--Note 3(b)................................ 692,078,515
--------------
NET ASSETS at value applicable to 217,618,081 shares outstanding
(300 million shares of $1 par value Capital Stock
authorized)........................................... $2,850,523,105
--------------
--------------
NET ASSET VALUE, offering and redemption price per share
($2,850,523,105 / 217,618,081 shares)................... $13.10
------
------
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF
OPERATIONS
Year ended December 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Cash dividends (net of $238,306 foreign taxes
withheld at source)............................ $ 55,534,225
Interest....................................... 16,374,430
------------
TOTAL INCOME................................ $ 71,908,655
EXPENSES:
Management fee--Note 2(a)...................... 18,514,648
Shareholder servicing costs.................... 2,758,054
Prospectus and shareholders' reports........... 263,006
Custodian fees................................. 223,884
Professional fees.............................. 185,829
Directors' fees and expenses--Note 2(b)........ 51,215
Registration fees.............................. 42,238
Miscellaneous.................................. 27,780
------------
TOTAL EXPENSES............................... 22,066,654
------------
INVESTMENT INCOME--NET....................... 49,842,001
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 3(a)............. $132,872,635
Net realized gain on forward currency exchange
contracts--Note 3(a); Short transactions.............. 1,367,394
------------
NET REALIZED GAIN............................ 134,240,029
Net unrealized appreciation on investments and forward
currency exchange contracts........................... 12,667,571
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS................................ 146,907,600
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $196,749,601
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF
CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1992 1993
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................. $ 59,563,508 $ 49,842,001
Net realized gain on investments................... 101,846,699 134,240,029
Net unrealized appreciation (depreciation) on
investments for the year......................... (1,467,412) 12,667,571
--------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.................................... 159,942,795 196,749,601
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net............................. (51,433,224) (63,624,901)
Excess investment income--net...................... -- (6,130,584)
Net realized gain on investments................... (73,934,421) (140,044,515)
--------------- ---------------
TOTAL DIVIDENDS........................... (125,367,645) (209,800,000)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold...................... 9,435,773,801 12,798,442,290
Dividends reinvested............................... 108,691,981 181,237,341
Cost of shares redeemed............................ (9,426,845,870) (13,264,963,957)
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS.............. 117,619,912 (285,284,326)
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS... 152,195,062 (298,334,725)
NET ASSETS:
Beginning of year.................................. 2,996,662,768 3,148,857,830
--------------- ---------------
End of year (including undistributed investment
income--net; $13,782,900 in 1992)................ $ 3,148,857,830 $ 2,850,523,105
--------------- ---------------
--------------- ---------------
<CAPTION>
SHARES SHARES
<S> <C> <C>
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold........................................ 728,486,540 965,802,077
Shares issued for dividends reinvested............. 8,319,610 13,953,428
Shares redeemed.................................... (727,707,146) (999,357,279)
--------------- ---------------
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING............................. 9,099,004 (19,601,774)
--------------- ---------------
--------------- ---------------
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
THE DREYFUS FUND INCORPORATED
FINANCIAL
HIGHLIGHTS
- --------------------------------------------------------------------------------
Reference is made to page 2 of the Prospectus dated May 2, 1994.
NOTES TO FINANCIAL
STATEMENTS
NOTE 1-- SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the exclusive distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor is
a wholly-owned subsidiary of The Dreyfus Corporation ("Manager").
(A) PORTFOLIO VALUATION: Investments in securities are valued at the
last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market.
Securities not listed on an exchange or the national securities market, or
securities for which there were no transactions, are valued at the average of
the most recent bid and asked prices. Bid price is used when no asked price is
available. Securities for which there are no such valuations are valued at fair
value as determined in good faith under the direction of the Board of Directors.
Short-term investments are carried at amortized cost, which approximates value.
Investments traded in foreign currencies are translated to U.S. dollars at the
prevailing rates of exchange.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on the
accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a quarterly
basis. Dividends from net realized capital gain are normally declared and paid
annually. The Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
Dividends in excess of investment income-net result primarily from
foreign currency transactions which are treated as ordinary income for tax
purposes and as capital gains for financial statement purposes.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the provisions available to
certain investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income sufficient to relieve
it from all, or substantially all, Federal income taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is payable monthly, based on the following annual percentages
of the average daily value of the Fund's net assets: .65 of 1% of the first $1.5
billion; .625 of 1% of the next
<PAGE>
$500 million; .6 of 1% of the next $500 million; and .55 of 1% over $2.5
billion.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes and brokerage
commissions, exceed 1% of the average daily value of the Fund's net assets for
any full year. No expense reimbursement was required pursuant to the Agreement
for the year ended December 31, 1993.
(B) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each director who
is not an "affiliated person" receives an annual fee of $6,500 and an attendance
fee of $500 per meeting.
(C) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger providing for the merger of the Manager with a subsidiary of Mellon
Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number of
contingencies, including the receipt of certain regulatory approvals and the
approvals of the stockholders of the Manager and of Mellon. The merger is
expected to occur in mid-1994, but could occur later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with the Manager under the Investment Company Act of 1940,
and thus a termination of such Agreement, the Manager will seek prior approval
from the Fund's Board and shareholders.
- --------------------------------------------------------------------------------
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investments,
excluding short-term securities, options transactions and forward currency
exchange contracts, during the year ended December 31, 1993, amounted to
$987,489,319 and $1,212,668,000, respectively.
In addition, the following summarizes open forward currency exchange
contracts at December 31, 1993:
<TABLE>
<CAPTION>
U.S. Dollar
Value at Unrealized
Forward Currency Sale Contracts Proceeds 12/31/1993 Appreciation
- -------------------------------- ----------- ----------- ------------
<S> <C> <C> <C>
Deutsche Marks, expiring 1/13/94.................... $12,835,472 $12,648,767 $186,705
Japanese Yen, expiring 2/15/94 and 2/17/94.......... 25,017,406 24,485,405 532,001
------------
$718,706
------------
------------
</TABLE>
<PAGE>
When executing forward currency exchange contracts, the Fund is
obligated to buy or sell a foreign currency at a specified rate on a certain
date in the future. With respect to sales of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract increases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
decreases between those dates. With respect to purchases of forward currency
exchange contracts, the Fund would incur a loss if the value of the contract
decreases between the date the forward contract is opened and the date the
forward contract is closed. The Fund realizes a gain if the value of the
contract increases between these dates.
(B) At December 31, 1993, accumulated net unrealized appreciation on
investments was $692,078,515, consisting of $744,471,097 gross unrealized
appreciation and $52,392,582 gross unrealized depreciation.
At December 31, 1993, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting purposes
(see the Statement of Investments).
<PAGE>
REPORT OF ERNST & YOUNG,
INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
THE DREYFUS FUND INCORPORATED
We have audited the accompanying statement of assets and liabilities of The
Dreyfus Fund Incorporated, including the statement of investments, as of
December 31, 1993, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the years indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1993, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Dreyfus Fund Incorporated at December 31, 1993, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the indicated
years, in conformity with generally accepted accounting principles.
ERNST & YOUNG
New York, New York
February 9, 1994
