THE DREYFUS FUND INCORPORATED
LETTER TO SHAREHOLDERS
Dear Shareholder:
For the six-month fiscal period ended June 30, 1995, The Dreyfus Fund
Incorporated produced a total return of 17.23%,* which compares with a total
return of 20.42% and 20.19%, respectively, for the Dow Jones Industrial
Average and the Standard & Poor's 500 Composite Stock Price Index during the
same period.**
The improvement in the Fund's performance, compared to the fiscal year
ended December 31, 1994, was due to strength in the stock market throughout
the period, and a change in management philosophy instituted when the
management of the Fund was changed early in the calendar year.
One of the most important and immediate changes we made was to put most
of the Fund's uninvested cash to work. In our view, a mutual fund manager's
job is not to try to predict the direction of the market. Rather, it is to
select stocks that possess investment characteristics that potentially
enhance investment performance on a risk-adjusted basis, in spite of the
market environment. As a long-term proposition, we do not believe it is wise
to bet against common stocks. We do, however, think it is smart to be
vigilant and cautious about being swept up in the occasional euphoria over
certain groups in the market, such as the current enthusiasm for technology,
no matter how compelling the fundamentals. This is especially true when the
fundamentals are now well known to all investors. With these considerations
in mind we invested most of the Fund's cash reserves, which stood at nearly
16% when the fiscal year began.
FROM DEFENSIVE TO MILDLY AGGRESSIVE
During the six-month period reflected in this report, our policy in
buying and holding stocks was mildly defensive, in response to the Federal
Reserve Board's actions to raise interest rates. However, as the economy
began to slow down in response to the Fed's moves, we became somewhat less
defensive. Then in early July, when the Federal Reserve finally reversed
gears by cutting interest rates, our stance in the market became more
aggressive, particularly with regard to cyclical issues that move with the
rise and fall of economic activity, often driven by the direction of interest
rates.
Among the more significant sector changes we made in the past six months
was to lighten up the technology holdings and at the same time change the
focus of those holdings. While we cut the technology weighting by
approximately a third, of equal significance, we changed its composition to
focus more on companies in the more high-tech areas of the sector. As a
consequence, emphasis was placed on semiconductors, memory and
communications. New names included Motorola, DSC Communications, General
Instrument, Texas Instruments and Micron Technology.
HEALTH CARE AND ENERGY
We have also increased the Fund's exposure to health care stocks, adding
such names as Lilly (Eli), Baxter International, Schering-Plough and Abbott
Laboratories. The commitment to consumer services, especially entertainment
content companies such as Viacom Cl.B, Time Warner, and Gaylord Entertainment
was much increased. Holdings in select consumer durables such as Chrysler and
Whirlpool were eliminated.
One area in which the portfolio had been sharply underweighted, in our
opinion, was energy. Accordingly, that category has been significantly
increased. New names include the oil producer Amerada Hess, along with the
oil service stocks such as Schlumberger. We believe the long-term outlook for
energy and energy services is good.
In the expectation that basic industries would revive with a stronger
economy, we increased weighting in that component of the portfolio. New names
include Georgia-Pacific, International Paper and Monsanto.
Among stocks that have benefitted the portfolio most are Intel, Grace
(W.R.), McDonald's, Sears Roebuck, Gillette, Hewlett-Packard, Citicorp, Texas
Instruments and Microsoft.
MORE RESTRUCTURING AHEAD
In the coming months, we expect to carry out further restructuring of the
portfolio. We hope that you will be pleased with the results.
Sincerely,
Ernest G. Wiggins
Portfolio Manager
July 27, 1995
New York, N.Y.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
**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 U.S. stock market
performance.
THE DREYFUS FUND INCORPORATED
COMMON STOCK PURCHASES AND SALES (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1995
PURCHASES(1)
NEW COMMITMENTS:
Abbott Laboratories, AlliedSignal, Amerada Hess, American Home Products,
Amgen, Baker Hughes, Bank of Boston, BankAmerica, Baxter International, Boeing,
CBI Industries, CPC International, Century Telephone Enterprises, Comcast,
Cl.A, Compaq Computer, Cooper Industries, Corning, Crown Cork & Seal, DSC
Communications, ENSCO International, FINOVA Group, First Interstate Bancorp,
Gaylord Entertainment, General Instruments, General Mills, Georgia-Pacific,
Astra A, Heinz (H.J.), Home Shopping Network, International Paper, Roche Hold-
ings, Lilly (Eli), May Department Stores, Micron Technology, Mirage Resorts,
Monsanto, Motorola, News Corp., A.D.S., Novell, Schering-Plough, Schlumberger,
Seagram , Smithkline Beecham A.D.S, Sonat Offshore, State Street Boston, Tele-
Communications, Cl.A, Texas Instruments, Time Warner, TRINOVA, USF&G, Viacom,
Cl.B, WMX Technologies, Wendy's International, Western Atlas.
ADDITIONS:
Bank of New York, Columbia/HCA Healthcare, Galen Partners, L.P.
(Units), General Motors, Penney (J.C.), Sara Lee, Sears Roebuck, SK Equity
Fund, L.P. (Units), Texaco, Wal-Mart Stores.
SALES
REDUCTIONS:
First Data, Ford Motor, General Electric, GE Investment Private
Placement Partners, L.P. (Units), Hewlett-Packard, Intel, McDonald's,
NationsBank, Philip Morris Cos., Procter & Gamble, Xerox.
ELIMINATIONS:
AT&T, Advanced Micro Devices, Advanta, CL.A , Advanta, Cl.B, Burlington
Northern, CSX, Canadian Gas Gathering Systems, Cl.A, Chevron, Chrysler,
Computer Associates International, Computer Sciences, Conagra, Conrail,
Cracker Barrel Old Country, Dayton Hudson, Dial, Eastman Kodak, Echlin,
Electronic Arts, Federal Express, First Financial Management, First USA,
Fruit of the Loom, Cl.A, Green Tree Financial, Home Depot, Illinois Central,
Lowes Cos., MBNA, MCI Communications, Mead, Mellon Bank, Mobil, Norfolk
Southern, Office Depot, Premark International, Reebok International, Roche
Holdings A.D.R., Royal Dutch Petroleum, Ryder System, Sprint, TRW, Tenneco,
Toys R Us, Travelers Group, Union Pacific, United Technologies, Varity,
Western National, Weyerhaeuser, Whirlpool, Williams Cos.
ELIMINATION OF SECURITIES ACQUIRED DURING THE SIX MONTHS:
American International Group, Andarko Petroleum, Applied Materials,
Burlington Resources, Citicorp, Comerica, Darden Restaurants, Deere,
Federated Department Stores, First Chicago, General Signal, Glaxo Wellcome
PLC, A.D.R., Johnson & Johnson, Louisiana Land & Exploration, Lubrizol, Merck
& Co., Microsoft, National Semiconductor, Occidental Petroleum, Pacific
Telesis, Pfizer, Providian, Shawmut National, United Healthcare, U.S.
Healthcare, Wheelabrator Technologies.
(1) Not shown are increases resulting from stock dividends and splits.
<TABLE>
<CAPTION>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS JUNE 30, 1995 (UNAUDITED)
COMMON STOCKS-93.2% SHARES VALUE
-------------------- --------------------
<S> <C> <C>
CONSUMER DURABLES-4.2% Ford Motor.................................... 1,500,000 $ 44,625,000
General Motors................................ 600,000 28,125,000
Mattel........................................ 1,562,500 40,625,000
--------------------
113,375,000
--------------------
CONSUMER
NON-DURABLES-13.8% CPC International............................. 400,000 24,700,000
General Mills................................. 500,000 25,687,500
Gillette...................................... 1,600,000 71,400,000
Heinz(HJ.).................................... 500,000 22,187,500
NIKE, Cl. B................................... 300,000 25,200,000
PepsiCo....................................... 650,000 29,656,250
Philip Morris Cos............................. 400,000 29,750,000
Procter & Gamble.............................. 900,000 64,687,500
Sara Lee...................................... 1,000,000 28,500,000
Seagram....................................... 1,500,000 51,937,500
--------------------
373,706,250
--------------------
CONSUMER SERVICES-11.0% Comcast, Cl. A................................ 1,000,000 18,562,500
Gaylord Entertainment......................... 1,470,000 37,117,500
McDonald's.................................... 1,500,000 58,687,500
Mirage Resorts................................ 1,500,000 (a) 45,937,500
News Corp, A.D.S.............................. 800,000 18,100,000
Time Warner................................... 1,100,000 45,237,500
Viacom, Cl. B................................. 1,300,000 (a) 60,287,500
Wendy's International......................... 800,000 14,300,000
--------------------
298,230,000
--------------------
ENERGY-14.4% Amerada Hess.................................. 1,675,000 81,865,625
Baker Hughes.................................. 1,250,000 25,625,000
ENSCO International........................... 1,000,000 (a) 15,875,000
Schlumberger.................................. 1,250,000 77,656,250
Sonat Offshore Drilling....................... 1,300,000 37,375,000
Texaco........................................ 1,500,000 98,437,500
Western Atlas................................. 1,000,000 (a) 44,375,000
Yorktown Energy Partners, L.P. (Units)........ 7.357 (b) 8,132,055
--------------------
389,341,430
--------------------
FINANCIAL-11.0% BankAmerica................................... 500,000 26,312,500
Bank of Boston................................ 1,100,000 41,250,000
Bank of New York.............................. 1,100,000 44,412,500
FINOVA Group.................................. 500,000 17,500,000
First Interstate Bancorp...................... 850,000 68,212,500
NationsBank................................... 397,000 21,289,125
SK Equity Fund, L.P. (Units).................. 20.282 (b) 38,778,211
State Street Boston........................... 650,000 23,968,750
USF&G......................................... 1,000,000 16,250,000
---------------------
297,973,586
---------------------
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1995 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------------- -----------------
HEALTH CARE-8.0% Abbott Laboratories........................... 350,000 $ 14,175,000
American Home Products........................ 150,000 11,606,250
Amgen......................................... 275,000 (a) 22,120,313
Astra A....................................... 1,000,000 30,880,330
Baxter International.......................... 500,000 18,187,500
Columbia/HCA Healthcare....................... 1,150,000 49,737,500
Galen Partners II, L.P. (Units)............... 3.357 (b) 3,075,952
Lilly (Eli)................................... 250,000 19,625,000
Roche Holdings................................ 2,100 13,567,261
Schering-Plough............................... 400,000 17,650,000
SmithKline Beecham A.D.S...................... 350,000 15,837,500
-----------------
216,462,606
-----------------
INDUSTRIAL SERVICES-2.1% CBI Industries................................ 750,000 18,843,750
WMX Technologies.............................. 1,300,000 36,887,500
-----------------
55,731,250
-----------------
PROCESS INDUSTRIES-5.7% Crown Cork & Seal............................. 500,000 (a) 25,062,500
duPont (E.I.) de Nemours...................... 300,000 20,625,000
Georgia-Pacific............................... 442,700 38,404,225
Grace (W.R.).................................. 500,000 30,687,500
International Paper........................... 166,000 14,234,500
Monsanto...................................... 300,000 27,037,500
------------------
156,051,225
------------------
PRODUCER
MANUFACTURING-7.7% AlliedSignal.................................. 1,500,000 66,750,000
Cooper Industries............................. 600,000 23,700,000
Corning....................................... 500,000 16,375,000
GE Investment Private Placement Partners
L.P., (Units)................................. 14.098 (b) 15,905,400
General Electric.............................. 1,000,000 56,375,000
TRINOVA....................................... 550,000 19,250,000
Xerox......................................... 80,000 9,380,000
------------------
207,735,400
-----------------
RETAIL TRADE-6.9% Home Shopping Network......................... 181,100 (a) 1,539,350
May Department Stores......................... 700,000 29,137,500
Penney (J.C.)................................. 600,000 28,800,000
Sears, Roebuck................................ 1,150,000 68,856,250
Wal-Mart Stores............................... 2,250,000 60,187,500
------------------
188,520,600
------------------
TECHNOLOGY-8.3% Boeing........................................ 350,000 21,918,750
Compaq Computer............................... 300,000 (a) 13,612,500
DSC Communications............................ 500,000 (a) 23,250,000
First Data.................................... 250,000 14,218,750
General Instrument............................ 500,000 (a) 19,187,500
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1995 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------------ ----------------
TECHNOLOGY (CONTINUED) Hewlett-Packard............................... 235,000 $ 17,507,500
Intel......................................... 300,000 18,993,750
Micron Technology............................. 200,000 10,975,000
Motorola...................................... 500,000 33,562,500
Novell........................................ 800,000 (a) 15,950,000
Tele-Communications, Cl. A.................... 1,000,000 (a) 23,437,500
Texas Instruments............................. 100,000 13,387,500
----------------
226,001,250
----------------
UTILITIES-.01% Century Telephone Enterprises................. 100,000 2,837,500
----------------
TOTAL COMMON STOCKS
(cost $2,144,910,902)......................... $2,525,966,097
================
CONVERTIBLE PREFERRED STOCK-.3%
USF&G, Ser. B, Cum., $10.25
(cost $4,925,000)............................. 50,000 (b) $ 7,770,262
================
PRINCIPAL
AMOUNT
----------------
SHORT-TERM INVESTMENTS-8.6%
COMMERCIAL PAPER-3.7% Prudential Funding, 6.20%, 7/3/1995 $ 100,000,000 $ 99,965,556
-----------------
U.S. GOVERNMENT
& AGENCIES-4.9% Federal Home Loan Mortgage,
6.10%, 7/3/1995......................... 134,300,000 134,254,487
-----------------
TOTAL SHORT-TERM INVESTMENTS
(cost $234,220,043)..................... $ 234,220,043
=================
TOTAL INVESTMENTS (cost $2,384,055,945)...................................... 102.1% $ 2,767,956,402
================ =================
LIABILITIES, LESS CASH AND RECEIVABLES......................................... (2.1%) $ (56,505,658)
=============== =================
NET ASSETS............................................................ 100.0% $2,711,450,744
=============== =================
THE DREYFUS FUND INCORPORATED
NOTES TO STATEMENTS OF INVESTMENTS
(a) Non-income producing.
(b) Securities restricted as to public resale. Investments in restricted
securities with an aggregate market value of $73,661,880 represent
approximately 2.72% of net assets:
</TABLE>
<TABLE>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE* NET ASSETS VALUATION+
- ------ ------------------ --------------- --------------- -------------------------
<S> <C> <C> <C> <C>
GE Investment Private Placement
Partners l, L.P. (Units)................ 5/28/91-5/23/95 $1,128,202.58 .59% $ 1,128,202.58 per unit
Galen Partners II, L.P. (Units)......... 12/8/93-4/27/95 916,280.01 .11 916,280.01 per unit
SK Equity Fund, L.P. (Units)............ 12/16/92-3/8/95 1,165,113.41 1.43 1,911,952.03 per unit
USF&G, Ser. B, Cum., $10.25............. 6/3/91 98.50 .29 155.41 per share
Yorktown Energy Partners, L.P. (Units).. 3/25/91-3/30/94 1,105,349.33 .30 1,105,349.33 per unit
* 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 limited partnerships listed below:
PORTION OF COMMITTED
ISSUER AMOUNTS UNINVESTED
------- -----------------------
GE Investment Private Placement
Partners l, L.P. (Units) $3,620,223
Galen Partners II, L.P. (Units) 1,915,448
SK Equity Fund, L.P. (Units) 27,851,286
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $2,384,055,945)-see statement................................... $2,767,956,402
Cash.................................................................... 1,867,183
Receivable for investment securities sold............................... 138,149,485
Dividends and interest receivable....................................... 4,509,135
Receivable for subscriptions to Capital Stock........................... 1,244,959
Prepaid expenses........................................................ 184,817
---------------
2,913,911,981
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 1,446,151
Payable for investment securities purchased............................. 199,975,909
Payable for Capital Stock redeemed...................................... 244,790
Accrued expenses........................................................ 794,387 202,461,237
----------------- ----------------
NET ASSETS.................................................................. $2,711,450,744
================
REPRESENTED BY:
Paid-in capital......................................................... $1,893,550,326
Accumulated undistributed investment income-net......................... 65,165
Accumulated undistributed net realized gain on investments.............. 433,934,796
Accumulated net unrealized appreciation on investments-Note 3........... 383,900,457
----------------
NET ASSETS at value applicable to 198,808,049 outstanding shares of Capital
Stock, equivalent to $13.64 per share (300 million shares of $1 par
value authorized)....................................................... $2,711,450,744
==================
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $416,433 foreign taxes withheld at source)..... $ 24,389,883
Interest.............................................................. 13,616,202
---------------
TOTAL INCOME...................................................... $ 38,006,085
EXPENSES:
Management fee-Note 2(a).............................................. 8,321,399
Shareholder servicing costs........................................... 1,198,539
Custodian fees........................................................ 122,857
Prospectus and shareholders' reports.................................. 91,759
Professional fees..................................................... 55,075
Directors' fees and expenses-Note 2(b)................................ 39,392
Registration fees..................................................... 24,777
Miscellaneous......................................................... 14,788
---------------
TOTAL EXPENSES.................................................... 9,868,586
----------------
INVESTMENT INCOME-NET............................................. 28,137,499
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $427,727,873
Net unrealized (depreciation) on investments............................ (37,557,469)
---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 390,170,404
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $418,307,903
================
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1995
1994 (UNAUDITED)
----------------- ---------------------
<S> <C> <C>
OPERATIONS:
Investment income-net............................................. $ 43,763,364 $ 28,137,499
Net realized gain on investments.................................. 115,978,966 427,727,873
Net unrealized (depreciation) on investments for the period....... (270,620,589) (37,557,469)
----------------- ---------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS. (110,878,259) 418,307,903
----------------- ---------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net............................................. (43,763,364) (21,683,496)
Net realized gain on investments.................................. (79,518,304) (44,649,053)
----------------- --------------------
TOTAL DIVIDENDS................................................. (123,281,668) (66,332,549)
----------------- --------------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold..................................... 6,662,064,854 4,481,324,734
Dividends reinvested.............................................. 105,591,624 56,514,616
Cost of shares redeemed........................................... (6,938,719,174) (4,623,664,442)
----------------- --------------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS........ (171,062,696) (85,825,092)
----------------- --------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... (405,222,623) 266,150,262
NET ASSETS:
Beginning of period............................................... 2,850,523,105 2,445,300,482
----------------- --------------------
End of period (including undistributed investment income-net of;
$65,165 in 1995)................................................ $ 2,445,300,482 $2,711,450,744
================== ====================
SHARES SHARES
----------------- ---------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................................... 517,021,740 344,633,538
Shares issued for dividends reinvested............................ 8,762,943 4,209,257
Shares redeemed................................................... (538,493,724) (354,943,786)
----------------- --------------------
NET (DECREASE) IN SHARES OUTSTANDING............................ (12,709,041) (6,100,991)
================== ====================
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
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.
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30, 1995
--------------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED)
----------- ---------- ---------- ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.07 $10.80 $13.14 $13.27 $13.10 $11.93
----------- ---------- ---------- ----------- ----------- ---------------
INVESTMENT OPERATIONS:
Investment income-net............... .50 .34 .27 .24 .21 .14
Net realized and unrealized gain (loss)
on investments.................... (.89) 2.63 .44 .58 (.76) 1.91
----------- ---------- ---------- ----------- ----------- ---------------
TOTAL FROM INVESTMENT OPERATIONS.. (.39) 2.97 .71 .82 (.55) 2.05
----------- ---------- ---------- ----------- ----------- ---------------
DISTRIBUTIONS:
Dividends from investment income-net (.51) (.35) (.24) (.30) (.22) (.11)
Dividends in excess of investment
income-net........................ -- -- -- (.03) -- --
Dividends from net realized gain
on investments.................... (.37) (.28) (.34) (.66) (.40) (.23)
----------- ---------- ---------- ----------- ----------- ---------------
TOTAL DISTRIBUTIONS............... (.88) (.63) (.58) (.99) (.62) (.34)
----------- ---------- ---------- ----------- ----------- ---------------
Net asset value, end of period...... $10.80 $13.14 $13.27 $13.10 $11.93 $13.64
=========== ========== ========== =========== =========== ===============
TOTAL INVESTMENT RETURN................. (3.33%) 28.02% 5.53% 6.36% (4.26%) 17.23%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .77% .78% .74% .74% .74% .37%*
Ratio of net investment income to
average net assets................ 4.20% 2.65% 2.08% 1.67% 1.63% 1.07%*
Portfolio Turnover Rate............. 98.58% 79.70% 55.42% 39.29% 27.70% 147.76%*
Net Assets, end of period (000's Omitted) $2,525,321 $2,996,663 $3,148,858 $2,850,523 $2,445,300 $2,711,451
* 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. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
(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. 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, but 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 and
excise 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; .60 of 1% of the
next $500 million; and .55 of 1% over $2.5 billion.
THE DREYFUS FUND INCORPORATED
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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, 1995.
(B) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $6,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the six months ended June 30, 1995,
amounted to $3,574,185,293 and $3,491,436,554, respectively.
At June 30, 1995, accumulated net unrealized appreciation on investments
was $383,900,457, consisting of $393,344,271 gross unrealized appreciation
and $9,443,814 gross unrealized depreciation.
At June 30, 1995, 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, 1995, and the related statements of operations and changes in net
assets and financial highlights for the six month period ended June 30, 1995.
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, 1994 and financial highlights for each of the five years in the
period ended December 31, 1994 and in our report dated January 30, 1995, 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
July 26, 1995
THE DREYFUS FUND INCORPORATED
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 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. 026SA956
The Dreyfus Fund
Incorporated
Semi-Annual
Report
June 30, 1995
(Dreyfus Logo)
