LETTER TO SHAREHOLDERS
Dear Shareholder:
The possibility of higher interest rates, perceived inflationary
pressures and the declining dollar have caused investors to be temporarily
uneasy over the future direction of the securities markets. This uncertainty
has had an unfavorable impact on stock prices, which started declining soon
after the Federal Reserve Board began a series of anti-inflation steps in
early February.
The stock market as measured by total return for the Standard & Poor's
500 Composite Stock Price Index declined 3.38% for the six-month period ended
June 30, 1994, while the Dow Jones Industrial Average had a negative total
return of 2.11%.*
This general market decline affected performance of the Dreyfus Fund for
the first half of its fiscal year. For that period, the Fund had a total
return of -5.11%.** Most of the Fund's negative performance occurred in the
second half of the reporting period, offsetting the first three months during
which the Fund modestly outperformed the S & P Index.
RECENT PORTFOLIO CHANGES
In the second calendar quarter, interest rate sensitive portfolio stocks
declined more than the market as a whole. These included the Fund's holdings
in the financial sector, automotive and railroad stocks, and to a lesser
extent, other sectors of the portfolio.
We sold companies that, in our view, have limited growth potential in the
near future such as First Union, Bankers Trust New York, Continental Bank and
Chemical Banking. Other significant sales were Melville, General Mills,
American Brands, CPC International, Polaroid, Kimberly-Clark and Seagram.
Among the new commitments made during the reporting period were Western
National, Green Tree Financial, ADVANTA, and First USA. We have also
established holdings in Xerox, Computer Sciences, Echlin, General Motors,
PACCAR, Cummins Engine, Ryder System and Cracker Barrel Old Country.
From these portfolio shifts it should be apparent that we have become
cautious about money-center banks, and to some extent also about consumer
goods.
THE INFLATION OUTLOOK
So far, whether the Federal Reserve can be credited or not, we have not
noted any resurgence of inflation. By the same token, we do not see signs of
much, if any, slowdown in the economy.
The portfolio now consists of companies that, in our view, have sound
fundamentals that we feel deserve better valuation in the stock market. We
are optimistic that this may occur in the reasonably near future.
Sincerely,
(Wolodymyr Wronskyj Signature Logo)
Wolodymyr Wronskyj
Portfolio Manager
July 14, 1994
New York, N.Y.
* SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the
reinvestment of income dividends and, where applicable, capital gain
distributions. Both the Dow Jones Industrial Average and the Standard &
Poor's 500 Composite Stock Price Index are widely accepted unmanaged
indexes of stock market performance.
** Total return represents the change in value during the period in a
hypothetical account with dividends reinvested.
THE DREYFUS FUND INCORPORATED
ASSET ALLOCATION AS OF JUNE 30, 1994
[Exhibit A]
<TABLE>
<CAPTION>
FIVE LARGEST SECTORS
AS OF DECEMBER 31, 1993 AS OF JUNE 30, 1994
<S> <C> <S> <C>
Financial.................... 18.0% Financial................... 16.6%
Consumer Staples............. 14.4 Consumer Cyclical........... 16.0
Consumer Cyclical............ 12.8 Consumer Growth Staples..... 11.4
Transportation............... 9.4 Consumer Staples............ 10.9
Consumer Growth Staples...... 9.1 Technology.................. 10.0
</TABLE>
<TABLE>
<CAPTION>
FIVE LARGEST EQUITY HOLDINGS AS OF JUNE 30, 1994
<S> <C>
Chrysler........................................................ 2.8%
Lowe's.......................................................... 2.7
Conrail......................................................... 2.4
Colgate-Palmolive............................................... 2.4
McDonald's...................................................... 2.3
</TABLE>
All percentages shown above are based on Total Net Assets.
THE DREYFUS FUND INCORPORATED
COMMON STOCK PURCHASES AND SALES
SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED)
PURCHASES (1)
NEW COMMITMENTS:
ADVANTA Cl. A, ADVANTA Cl. B, Columbia/HCA Healthcare, Computer
Associates International, Computer Sciences, Cracker Barrel Old
Country, Cummins Engine, Echlin, Electronic Arts, First USA, General
Motors, Green Tree Financial, Hasbro, Home Depot, PACCAR, Reebok
International, Ryder System, Sara Lee, Schering-Plough, Western
National and Xerox.
ADDITIONS:
Galen Partners II L.P. (Units), GE Investment Private Placement
Partners I L.P. (Units), Sears Roebuck, Varity and Yorktown Energy
Partners L.P. (Units).
SALES
REDUCTIONS;
SK Equity Fund L.P. (Units).
ELIMINATIONS:
American Brands, Banc One, Bankers Trust New York, CPC
International, Caremark International, Chemical Banking, Clorox,
Continental Bank, Dean-Witter Discover, First Union, General Mills,
Kimberly-Clark, Melville, Polaroid, Seagram, Shawmut National, Union
Texas Petroleum and Wells Fargo.
(1) Not shown are increases resulting from stock dividends and splits.
<TABLE>
<CAPTION>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS-89.9% SHARES VALUE
----------- ---------------
<S> <C> <C>
BASIC INDUSTRIES-1.9% Eastman Chemical................. 187,500 $ 8,953,125
Mead............................. 500,000 22,062,500
Rayonier......................... 125,000 3,609,375
SK Equity Fund, L.P. (Units)..... 14.764 (c) 14,677,176
--------------
49,302,176
--------------
CAPITAL GOODS-4.9% Cummins Engine................... 200,000 8,650,000
Eaton............................ 500,000 26,000,000
General Electric................. 1,090,000 50,821,250
PACCAR........................... 400,000 18,500,000
Varity........................... 600,000 (a) 21,825,000
--------------
125,796,250
--------------
CONGLOMERATES_3.3% Dial............................. 1,000,000 42,750,000
ITT.............................. 500,000 40,812,500
--------------
83,562,500
--------------
CONSUMER CYCLICAL_16.0% Chrysler......................... 1,500,000 70,687,500
Dana............................. 1,000,000 28,500,000
Eastman Kodak.................... 750,000 36,093,750
Echlin........................... 500,000 15,062,500
Ford Motor....................... 800,000 47,200,000
Fruit of The Loom, Cl. A......... 700,000 (a) 18,287,500
General Motors................... 500,000 25,125,000
Goodyear Tire & Rubber........... 600,000 21,600,000
Home Depot....................... 400,000 16,850,000
Penney (J.C.).................... 400,000 21,700,000
Reebok International............. 500,000 14,937,500
Ryder System..................... 400,000 10,050,000
Sears, Roebuck................... 1,000,000 48,000,000
Wal-Mart Stores.................. 500,000 12,125,000
Whirlpool........................ 400,000 21,000,000
--------------
407,218,750
--------------
CONSUMER GROWTH STAPLES_11.4% Columbia/HCA Healthcare.......... 250,000 9,375,000
Galen Partners II, L.P. (Units).. 2.706 (c) 2,407,711
Gillette......................... 800,000 52,100,000
Hasbro........................... 500,000 14,812,500
Mattel........................... 1,250,000 31,718,750
McDonald's....................... 2,000,000 57,750,000
PepsiCo.......................... 1,525,000 46,703,125
Roche Holdings A.D.S............. 1,140,000 (b) 54,292,500
Schering-Plough.................. 200,000 12,250,000
Toys R Us........................ 250,000 (a) 8,187,500
--------------
289,597,086
--------------
CONSUMER STAPLES_10.9% AT&T............................. 700,000 38,062,500
Campbell Soup.................... 595,000 20,453,125
Colgate-Palmolive................ 1,176,000 61,152,000
ConAgra.......................... 500,000 15,250,000
Cracker Barrel Old Country....... 500,000 11,937,500
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED)
JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ --------------
CONSUMER STAPLES (CONTINUED) Philip Morris Cos................ 1,000,000 $ 51,500,000
Procter & Gamble................. 1,000,000 53,375,000
RJR Nabisco Holdings............. 3,012,400 (a) 18,450,950
Sara Lee......................... 400,000 8,500,000
--------------
278,681,075
--------------
CREDIT CYCLICAL_4.6% Centex........................... 460,000 11,845,000
Green Tree Financial............. 350,000 19,600,000
Lowe's........................... 2,000,000 68,500,000
Masco............................ 600,000 16,500,000
--------------
116,445,000
--------------
ENERGY_1.0% Canadian Gas Gathering Systems, Cl. A 244,511 (c) 2,445,110
GE Investment Private Placement
Partners I, L.P. (Units)....... 14.683 (c) 15,280,919
Yorktown Energy Partners, L.P. (Units) 7.358 (c) 8,262,362
--------------
25,988,391
--------------
FINANCIAL_16.6% ADVANTA, Cl. A................... 15,000 532,500
ADVANTA, Cl. B................... 485,000 15,641,250
AMBAC............................ 1,250,000 49,062,500
Bank of New York................. 1,600,000 46,200,000
Chase Manhattan (Warrants)....... 11,772 (a) 97,119
EXEL Limited..................... 493,000 19,042,125
First Chicago.................... 400,000 19,250,000
First Data....................... 800,000 33,100,000
First Financial Management....... 500,000 27,750,000
First USA........................ 500,000 19,187,500
GFC Financial.................... 650,000 21,693,750
MBNA............................. 2,250,000 50,625,000
Mellon Bank...................... 983,100 55,299,375
NationsBank...................... 500,000 25,687,500
Travelers........................ 666,666 21,500,000
Western National................. 1,500,000 17,812,500
--------------
422,481,119
--------------
TECHNOLOGY_10.0% Advanced Micro Devices........... 500,000 (a) 12,437,500
Computer Associates International 500,000 20,000,000
Computer Sciences................ 500,000 (a) 20,812,500
Electronic Arts.................. 525,000 (a) 7,350,000
Hewlett-Packard.................. 600,000 45,225,000
Intel............................ 500,000 29,250,000
MCI Communications............... 1,025,000 22,678,125
Sprint........................... 950,000 33,131,250
Sun Microsystems................. 500,000 (a) 10,312,500
TRW.............................. 400,000 25,800,000
Xerox............................ 300,000 29,325,000
--------------
256,321,875
--------------
TRANSPORTATION_9.3% Burlington Northern.............. 700,000 37,362,500
CSX.............................. 600,000 45,300,000
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED)
JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ --------------
TRANSPORTATION (CONTINUED) Conrail......................... 1,140,000 $ 62,415,000
Illinois Central................. 1,000,000 33,125,000
Norfolk Southern................. 500,000 31,500,000
Union Pacific.................... 500,000 28,312,500
--------------
238,015,000
--------------
TOTAL COMMON STOCKS
(cost $1,782,271,111).......... $2,293,409,222
==============
CONVERTIBLE PREFERRED STOCK_.2%
USF&G, Ser.B, Cum., $10.25
(cost $4,925,000).............. 50,000 (c) $ 5,857,583
==============
PRINCIPAL
CORPORATE BONDS_.3% AMOUNT
---------------
Canadian Gas Gathering Systems:
14%, 8/29/2005................. $ 187,500 (c) $ 187,500
14%, 10/31/2005................ 187,500 (c) 187,500
14%, 7/24/2006................. 531,633 (c) 531,633
14%, 12/10/2006................ 2,184,406 (c) 2,184,406
14%, 4/8/2007.................. 549,478 (c) 549,478
14%, 11/17/2007................ 1,683,276 (c) 1,683,276
14%, 6/30/2008................. 1,930,747 (c) 1,930,747
14%, 12/29/2008................ 112,831 (c) 112,831
TOTAL CORPORATE BONDS ---------
(cost $7,367,371).............. $ 7,367,371
==============
SHORT-TERM INVESTMENTS_16.7%
TIME DEPOSITS_7.4% Chemical Bank (London),
41/4%, 7/1/1994................ $100,000,000 $ 100,000,000
Republic National Bank of New York (London),
43/8%, 7/1/1994................ 88,150,000 88,150,000
--------------
188,150,000
--------------
U.S. GOVERNMENT & AGENCIES_9.3% Federal Home Loan Mortgage:
4.15%, 7/1/1994................ 75,000,000 75,000,000
4.16%, 7/1/1994................ 44,475,000 44,475,000
Federal National Mortgage Association,
4.10%, 7/1/1994................ 109,850,000 109,850,000
U.S. Treasury Bills,
31/8%, 7/21/1994............... 7,268,000 7,253,161
--------------
236,578,161
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $424,728,161)............ $ 424,728,161
==============
TOTAL INVESTMENTS (cost $2,219,291,643).................................... 107.1% $2,731,362,337
====== ==============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (7.1%) $ (180,952,594)
====== ==============
NET ASSETS.................................................................. 100.0% $2,550,409,743
====== ==============
</TABLE>
THE DREYFUS FUND INCORPORATED
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. This security
amounted to 2.13% of net assets.
(c) Securities restricted as to public resale. Investments in restricted
securities with an aggregate market value of $56,298,232 represent
approximately 2.21% of net assets:
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE* NET ASSETS VALUATION+
- --_ ------------------ --------- -------------- -----------------------
<S> <C> <C> <C> <C>
Canadian Gas Gathering Systems, Cl. A 8/29/90 - 12/29/93 $ 10.00 .10% $ 10.00 per share
Canadian Gas Gathering Systems 14%:
8/29/2005-12/29/2008 8/29/90 - 12/29/93 100.00 .29 par
GE Investment Private Placement
Partners I, L.P. (Units) 5/28/91 - 6/22/94 1,040,738.89 .60 1,040,738.89 per unit
Galen Partners II, L.P. (Units) 12/8/93 - 6/21/94 889,767.32 .09 889,767.32 per unit
SK Equity Fund, L.P. (Units) 12/16/92 - 5/10/94 994,150.83 .58 994,150.83 per unit
USF&G, Ser.B, Cum., $10.25 6/3/91 98.50 .23 117.15 per share
Yorktown Energy Partners, L.P. (Units) 3/25/91 - 3/30/94 1,123,000.25 .32 1,123,000.25 per unit
</TABLE>
*Average cost.
+The valuation of these securities has been determined in good faith
under the direction of the Board of Directors.
- --------------------
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) 5,317,240
Galen Partners II, L.P. (Units) 2,294,000
SK Equity Fund, L.P. (Units) 35,236,461
Yorktown Energy Partners, L.P. (Units) 2,642,600
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS FUND INCORPORATED
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED)
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $2,219,291,643)_see statement................................... $2,731,362,337
Cash.................................................................... 2,005,483
Dividends and interest receivable....................................... 5,656,487
Receivable for investment securities sold............................... 4,429,250
Receivable for subscriptions to Capital Stock........................... 1,045,064
Prepaid expenses and other assets....................................... 782,942
--------------
2,745,281,563
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 1,398,089
Payable for Capital Stock redeemed...................................... 192,511,453
Payable for investment securities purchased............................. 96,503
Accrued expenses and other liabilities.................................. 865,775 194,871,820
------------ --------------
NET ASSETS.................................................................. $2,550,409,743
==============
REPRESENTED BY:
Paid-in capital......................................................... $2,017,759,164
Accumulated distributions in excess of investment income-net............ (1,247,300)
Accumulated undistributed net realized gain on investments.............. 21,827,185
Accumulated net unrealized appreciation on investments_Note 3(b)........ 512,070,694
--------------
NET ASSETS at value applicable to 207,656,089 outstanding shares of Capital
Stock, equivalent to $12.28 per share (300 million shares of
$1 par value authorized)................................................ $2,550,409,743
==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS FUND INCORPORATED
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED)
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Cash dividends (net of $81,202 foreign taxes withheld at source)...... $25,153,439
Interest.............................................................. 6,768,146
-----------
TOTAL INCOME...................................................... $ 31,921,585
EXPENSES:
Management fee_Note 2(a).............................................. 8,748,744
Shareholder servicing costs........................................... 1,230,650
Prospectus and shareholders' reports.................................. 113,512
Custodian fees........................................................ 99,204
Directors' fees and expenses_Note 2(b)................................ 29,754
Registration fees..................................................... 27,312
Professional fees..................................................... 23,191
Miscellaneous......................................................... 14,934
-----------
TOTAL EXPENSES.................................................... 10,287,301
--------------
INVESTMENT INCOME_NET............................................ 21,634,284
--------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments_Note 3(a).............................. $23,853,192
Net realized (loss) on forward currency exchange contracts_Note 3(a);
Short transactions.................................................... (775,318)
-----------
NET REALIZED GAIN................................................. 23,077,874
Net unrealized (depreciation) on investments and forward currency exchange contracts (180,007,821)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (156,929,947)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (135,295,663)
==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS FUND INCORPORATED
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1994
1993 (UNAUDITED)
---------------- ---------------
OPERATIONS:
<S> <C> <C>
Investment income-net............................................ $ 49,842,001 $ 21,634,284
Net realized gain on investments.................................. 134,240,029 23,077,874
Net unrealized appreciation (depreciation) on investments for the period 12,667,571 (180,007,821)
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS. 196,749,601 (135,295,663)
---------------- ---------------
DIVIDENDS TO SHAREHOLDERS:
From investment income-net....................................... (63,624,901) (21,634,284)
In excess of investment income-net................................ (6,130,584) (1,247,300)
From net realized gain on investments............................. (140,044,515) (9,257,165)
---------------- ----------------
TOTAL DIVIDENDS................................................. (209,800,000) (32,138,749)
---------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold..................................... 12,798,442,290 4,233,958,997
Dividends reinvested.............................................. 181,237,341 27,471,286
Cost of shares redeemed........................................... (13,264,963,957) (4,394,109,233)
---------------- ---------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS........ (285,284,326) (132,678,950)
---------------- ---------------
TOTAL (DECREASE) IN NET ASSETS.............................. (298,334,725) (300,113,362)
NET ASSETS:
Beginning of period............................................... 3,148,857,830 2,850,523,105
---------------- ---------------
End of period [including distributions in excess of investment income-net of
($1,247,300) in 1994]........................................... $ 2,850,523,105 $ 2,550,409,743
================ ================
SHARES SHARES
---------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................................... 965,802,077 323,761,488
Shares issued for dividends reinvested............................ 13,953,428 2,173,566
Shares redeemed................................................... (999,357,279) (335,897,046)
---------------- ---------------
NET (DECREASE) IN SHARES OUTSTANDING............................ (19,601,774) (9,961,992)
================ ================
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS FUND INCORPORATED
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 period indicated. This
information has been derived from the Fund's financial statements.
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED
---------------------------------------------------------- JUNE 30, 1994
PER SHARE DATA: 1989 1990 1991 1992 1993 (UNAUDITED)
------ ------ ------ ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $10.55 $12.07 $10.80 $13.14 $13.27 $13.10
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net................. .58 .50 .34 .27 .24 .10
Net realized and unrealized gain (loss)
on investments....................... 1.89 (.89) 2.63 .44 .58 (.76)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS..... 2.47 (.39) 2.97 .71 .82 (.66)
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income_net... (.59) (.51) (.35) (.24) (.30) (.10)
Dividends in excess of investment income_net -- -- -- -- (.03) (.01)
Dividends from net realized gain on investments (.36) (.37) (.28) (.34) (.66) (.05)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS.................. (.95) (.88) (.63) (.58) (.99) (.16)
------ ------ ------ ------ ------ ------
Net asset value, end of period......... $12.07 $10.80 $13.14 $13.27 $13.10 $12.28
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 23.64%(1) (3.33%) 28.02% 5.53% 6.36% (5.11%)(2)
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .75% .77% .78% .74% .74% .37%(2)
Ratio of net investment income to
average net assets................... 4.73% 4.20% 2.65% 2.08% 1.67% .77%(2)
Portfolio Turnover Rate................ 104.28% 98.58% 79.70% 55.42% 39.29% 14.41%(2)
Net Assets, end of period (000's Omitted) $2,536,151 $2,525,321 $2,996,663 $3,148,858 $2,850,523 $2,550,410
(1) Exclusive of sales load.
(2) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
THE DREYFUS FUND INCORPORATED
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 denominated in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange. Forward
currency exchange contracts are valued at the offsetting rate.
(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.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from 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 $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 six months ended June 30, 1994.
(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.
THE DREYFUS FUND INCORPORATED
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger (the "Merger Agreement") 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 receipt of certain regulatory approvals and
approvals of the stockholders of the Manager and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's
shareholders before completion of the merger. Proxy materials, approved by
the Fund's Board, recently have been mailed to Fund shareholders.
NOTE 3_SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, options transactions and forward currency
exchange contracts, during the six months ended June 30, 1994, amounted to
$351,232,445 and $369,406,199, respectively.
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 those dates. At June 30, 1994, there were no forward
currency exchange contracts outstanding.
(B) At June 30, 1994, accumulated net unrealized appreciation on
investments was $512,070,694, consisting of $586,941,494 gross unrealized
appreciation and $74,870,800 gross unrealized depreciation.
At June 30, 1994, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
THE DREYFUS FUND INCORPORATED
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
THE DREYFUS FUND INCORPORATED
We have reviewed the accompanying statement of assets and liabilities of
The Dreyfus Fund Incorporated, including the statement of investments, as of
June 30, 1994, and the related statements of operations and changes in net
assets and financial highlights for the six month period ended June 30, 1994.
These financial statements and financial highlights are the responsibility of
the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the statement of changes in net assets for the year ended December
31, 1993 and financial highlights for each of the five years in the period
ended December 31, 1993 and in our report dated February 9, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP Signature Logo)
New York, New York
August 1, 1994
(Dreyfus Logo)
Fund, Inc.
Semi-Annual
Report
June 30, 1994
(Dreyfus Lion Logo)
(Dreyfus `D' Logo)
THE DREYFUS FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 026SA946
The Dreyfus Fund Incorporated
Asset Allocation as of June 30, 1994
|----------------------------------------------------|
|Common Stocks 89.9% |
|Convertible Preferred Stocks 0.2% |
|Corporate Bonds 0.3% |
|Cash Equivalents 9.6% |
|----------------------------------------------------|
