THE DREYFUS FUND INCORPORATED
LETTER TO SHAREHOLDERS
Dear Shareholder:
Strength in the securities markets last year benefited shareholders in
The Dreyfus Fund Incorporated, as shown in this annual report for the fiscal
year ended December 31, 1995. In addition to an account of the total return
for the year and a discussion of how the portfolio was managed, we also
include a review of the economic environment and of the year's trends in the
stock market.
ECONOMIC ENVIRONMENT
The dominant influence on the U.S. economy in 1995 was the policy of the
Federal Reserve Board's Open Market Committee, led by Federal Reserve Board
Chairman Alan Greenspan. By deft handling of credit controls, the Fed managed
to keep the U.S. economy growing at a moderate rate throughout the year.
At the start of 1995, the central bank was still fighting inflation and
continued a year-long strategy of raising interest rates to prevent
overheating of the economy. This approach appeared to work. The economy began
to slow down, even raising some fear that the Fed might have caused a
recession. Yet by midsummer the Fed switched gears, and began a very modest
lowering of interest rates. Its purpose was to maintain the growth of the
economy and to place the Fed in a position to avoid blame for causing a
business downturn, if one should come.
By fall, the economic indicators confirmed that growth was indeed
slowing. Construction activity was cooling off. Business inventories were
creeping up. Creation of new jobs slowed, and unemployment inched upward.
However, other sectors of the economy remained strong. U.S. merchandise
exports were growing at 15% a year in constant dollars, reflecting the
tremendous competitiveness of U.S. manufacturers on world markets. Fixed
investments by business continued to grow. Orders for nondefense capital goods,
after a slump in early summer, appeared to be picking up. Lower interest
rates sustained a good level of housing sales.
Retail sales were weak, particularly late in the year. The economy was no
longer being led by consumer spending. Yet, a sizable portion of the slowdown
in consumer spending reflects lower retail prices rather than a drop in
numbers of transactions.
In December, the Federal Reserve lowered interest rates once again, but
by the smallest amount possible. Other steps to reduce interest rates are
expected in 1996 to deal with a continued slowing of the economy.
MARKET OVERVIEW
As one would expect from the key role played by the Federal Reserve, the
stock market was heavily influenced during the year by interest rates, and
hence by the bond market.
The 1995 economic climate was ideal for bonds - slow growth, no worrisome
inflation, and pressure in Washington to reduce the Federal deficit, hence
cutting back the Government's need to borrow money.
The stock market took its cue from the rising prices of fixed income
investments. As indicated by the performance of your Fund, stocks enjoyed a
very strong year. Of course, the rising tide did not lift all the boats, even
though the Dow Jones Industrials broke through the 4000 and 5000 point levels
during the year. Technology stocks, especially computer issues, rose
stunningly until late in the year, when many investors concluded that their
prices might have outrun their profit potential, at least for a while.
Interest-sensitive stocks, such as financial companies and utilities, did
well. As the year wore on, however, some manufacturing and retailing sectors,
where profit margins were being squeezed by competition, reflected investor
concern about future profit potential.
Few analysts believe that market conditions will be as favorable this
year as they were in 1995. Indeed, the market stumbled in early January.
However, stock prices may not as yet fully reflect the possibilities for
dramatically lower interest rates if the Federal Government does actually set
its course toward eliminating the budget deficit in seven years.
PORTFOLIO FOCUS
Our strategy during this turbulent year, especially in the latter part of
the year, was to take advantage of price weakness and acquire quality issues
in sectors that we believed would appreciate in 1996 and, conversely, to sell
what we believed were overvalued holdings. In line with this view we sold
selected consumer names to increase and/or establish new positions in Capital
Goods and Chemicals and rebuild the Technology weighting.
The Dreyfus Fund had a total return of 23.77% for the 12 months ended
December 31, 1995,* which compares with 37.53% for the Standard & Poor's 500
Composite Stock Price Index.**
The Fund was underrepresented in several industry sectors that were the
strongest performers in the S&P 500 last year, primarily Financials,
Technology and selected Health Care issues including Biotechnology. This is
primarily what accounts for the differences between the performance of the
Fund and of the broad market averages.
At midyear, we reported that the Fund had lightened up in Technology. As
the year progressed, and especially in the last quarter of 1995 as prices of
Technology issues came under pressure, we began to increase the Fund's
weighting in Technology. New names include Bay Networks, Perkin-Elmer, cisco
Systems and Seagate Technology. In our opinion, the longer-term outlook for
technology issues is bright and the recent weak prices present a buying
opportunity.
We also noted in our last communication that we had increased our
weightings in Energy, which turned out to be advantageous. As the year came
to a close, the Fund began to cut back Energy and apply the proceeds toward
increasing the weighting in Process Industries, especially selected Chemical
issues, often in the midst of restructuring, such as Praxair, DuPont and
Monsanto. The weighting in Producer Manufacturing was also significantly
increased as economic concern dampened enthusiasm for cyclical stocks and
values became compelling. Positions were increased in Cooper Industries and
Xerox, and new positions were established in Honeywell, Raychem and Deere &
Co.
The weighting in Autos was also increased, reflecting our opinion that
the U.S. Auto Industry is much more competitive and that their managements
will be successful in producing increased shareholder value via their
restructuring efforts.
Among the stocks that have benefited the portfolio most since midyear are
Monsanto, Texaco, Allstate, Deere & Co., Ensco International, Astra Group,
General Motors Cl.E, Raychem, Xerox and Amerada Hess.
We are glad that you are a shareholder in The Dreyfus Fund Incorporated.
We look forward to continuing to serve your investment needs, and we extend
our best wishes for a good New Year.
Sincerely,
[Ernest G. Wiggins signature logo]
Ernest G. Wiggins
Portfolio Manager
January 11, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of stock market performance.
THE DREYFUS FUND INCORPORATED DECEMBER 31, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE DREYFUS FUND
INCORPORATED AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[Exhibit A:
$1,567,998
The Dreyfus Fund
Dollars
$1,415,938
Standard & Poor's 500
Composite Stock
Price Index*
*Source:Lipper Analytical Services, Inc.]
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED FROM INCEPTION (5/24/51)
DECEMBER 31, 1995 DECEMBER 31, 1995 DECEMBER 31, 1995 TO DECEMBER 31, 1995
__________ __________ __________ _____________
<S> <C> <C> <C> <C>
23.77% 11.21% 10.82% 12.25%
</TABLE>
Past performance is not predictive of future performance.
Although the Fund commenced operations on 5/24/51, the Standard & Poor's 500
Composite Stock Price Index was available beginning 12/31/51. Accordingly,
the above graph compares a $10,000 investment made in The Dreyfus Fund
Incorporated on 12/31/51 to a $10,000 investment made in the Standard &
Poor's 500 Composite Stock Price Index on that date. All dividends and
capital gain distributions are reinvested.
The Fund's performance shown in the line graph takes into account all
applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price
Index is a widely accepted, unmanaged index of overall stock market
performance which does not take into account charges, fees and other
expenses. Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
THE DREYFUS FUND INCORPORATED
COMMON STOCK PURCHASES AND SALES (UNAUDITED) SIX MONTHS ENDED DECEMBER 31, 1995
PURCHASES
NEW COMMITMENTS:
ACE, Aetna Life & Casualty, American District Telegraph, America
International Group, American Reinsurance, Andarko Petroleum, BHC
Communications Cl. A, Bankers Trust New York, Bard (C.R.), Bay Networks,
Burlington Northern Santa Fe, Chris-Craft Industries, Circus Circus
Enterprises, cisco Systems, Citicorp, Consolidated Stores, Deere & Co.,
Disney (Walt), Ericsson (LM) Telephone Cl. B A.D.R., Federal National
Mortgage Association, First Union, General Motors Cl. E, Goulds Pumps, Home
Depot, Honeywell, International Family Entertainment Cl. B., Kansas City
Southern Industries, Liberty Media Group Cl. A, Noble Drilling, Perkin-Elmer,
Pharmacia & UpJohn, Praxair, Raychem, Sandoz AG, St. Paul, Seagate
Technology, Teva Pharmaceutical Industries A.D.R., Thiokol, Thomas Nelson,
Tidewater, Turner Broadcasting Cl.B, U.S.A. Waste Services, Union Pacific,
Union Planters, Warner-Lambert.
ADDITIONS:
Amerada Hess, Cooper Industries, Crown Cork & Seal, DSC Communications,
duPont (E.I.) de Nemours, ENSCO International, Ford Motor, Galen Partners II,
L.P. (Units), Gaylord Entertainment Cl. A, GE Investment Private Placement
Partners L.P. (Units), General Motors, Hewlett-Packard, Home Shopping
Network, Lowes, Mirage Resorts, Monsanto, News Corp. A.D.R., Time Warner,
Viacom Cl. B, Wal-Mart Stores, Wendy's International, Xerox, Yorktown Energy
Partners L.P. (Units).
SALES
REDUCTIONS:
AlliedSignal, Bank of Boston, BankAmerica, Grace (W.R.), Seagram, SK Equity
Fund L.P. (Units), State Street Boston, Texaco, Union Pacific, WMX
Technologies, Wal-Mart Stores, Xerox, Yorktown Energy Partners L.P. (Units).
ELIMINATIONS:
Abbott Laboratories, American Home Products, Amgen, Baker Hughes, Bank of New
York, Baxter International, CBI Industries, CPC International, Century
Telephone Enterprises, Columbia/HCA Healthcare, Comcast Cl. A, Compaq
Computer, Corning, FINOVA Group, First Data, First Interstate Bancorp,
General Electric, General Instrument, General Mills, Georgia-Pacific,
Gillette, Heinz (H.J.), Intel, International Paper, Mattel, May Department
Stores, McDonald's, Micron Technology, Motorola, NationsBank, Nike Cl. B,
Novell, Nucor, Penney (J.C.), PepsiCo, Philip Morris, Procter & Gamble, Sara
Lee, Schering-Plough, Schlumberger, Sears Roebuck, SmithKline Beecham A.D.S.,
Sonat Offshore, Tele-Communications Cl. B, Texas Instruments, Time Warner,
TRINOVA, USF&G, UpJohn, Wendy's International, Western Atlas.
ELIMINATION OF SECURITIES ACQUIRED DURING THE SIX MONTHS:
Alcan Aluminium, Allstate, Aluminum Co. of America, Applied Materials,
Browning-Ferris Industries, Cirrus Logic, Cooper Cameron, CSX, Dresser
Industries, ENI Spa A.D.R., Federated Department Stores, Hartcourt General,
Illinois Central Ser. A., Inland Steel Industries, Nucor, Southern Pacific
Railroad, Temple-Inland, Westinghouse Electric.
<TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS DECEMBER 31, 1995
COMMON STOCKS-99.0% SHARES VALUE
________ ________
<S> <C> <C>
COMMERCIAL SERVICES-.8% American District Telegraph 1,500,000 $ 22,500,000
_______
CONSUMER DURABLES-5.7% Ford Motor............................... 2,200,000 63,800,000
General Motors......................... 1,650,000 87,243,750
_______
151,043,750
_______
CONSUMER
NON-DURABLES-1.6% Seagram................................ 1,250,000 43,281,250
_______
CONSUMER SERVICES-16.6% BHC Communications, Cl. A 158,000 14,931,000
Chris-Craft Industries................. 525,000 22,706,250
Circus Circus Enterprises.............. 370,000 (a) 10,313,750
Disney (Walt).......................... 1,250,000 73,750,000
Gaylord Entertainment, Cl. A........... 2,500,000 69,375,000
International Family Entertainment, Cl. B 600,000 (a) 9,825,000
Liberty Media Group, Cl. A............. 900,000 24,187,500
Mirage Resorts......................... 1,600,000 55,200,000
News Corp A.D.R........................ 2,000,000 42,750,000
Thomas Nelson.......................... 1,605,200 (b) 20,867,600
Turner Broadcasting, Cl. B............. 750,000 19,500,000
Viacom, Cl. B.......................... 1,600,000 (a) 75,800,000
_______
439,206,100
_______
ELECTRONIC TECHNOLOGY-9.4% Bay Networks............................ 700,000 (a) 28,787,500
Boeing................................. 350,000 27,431,250
cisco Systems.......................... 360,000 (a) 26,865,000
DSC Communications..................... 1,000,000 (a) 36,875,000
Ericsson (LM) Telephone, Cl. B, A.D.R. 1,000,000 19,500,000
Hewlett-Packard........................ 600,000 50,250,000
Perkin-Elmer........................... 750,000 28,312,500
Seagate Technology..................... 300,000 (a) 14,250,000
Thiokol................................ 500,000 16,937,500
_______
249,208,750
_______
ENERGY MINERALS-6.4% Amerada Hess........................... 1,690,000 89,570,000
Anadarko Petroleum..................... 600,000 32,475,000
Texaco................................. 500,000 39,250,000
Yorktown Energy Partners, L.P. (Units). 7.095 (c) 7,804,989
_______
169,099,989
_______
FINANCE-13.2% ACE.................................... 750,000 29,812,500
Aetna Life & Casualty.................. 360,000 24,930,000
American International Group........... 300,000 27,750,000
American Reinsurance................... 400,000 16,350,000
BankAmerica............................ 200,000 12,950,000
Bank of Boston ........................ 500,000 23,125,000
Bankers Trust New York................. 450,000 29,925,000
Citicorp............................... 300,000 20,175,000
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
________ ________
FINANCE (CONTINUED) Federal National Mortgage Association 285,000 $ 35,375,625
First Union............................ 350,000 19,468,750
SK Equity Fund, L.P. (Units)........... 21.052 (c) 35,527,420
St. Paul Cos........................... 380,000 21,137,500
State Street Boston ................... 500,000 22,500,000
Union Planters......................... 1,000,000 31,875,000
_______
350,901,795
_______
HEALTH TECHNOLOGY-8.6% Astra A................................ 1,000,000 39,861,612
Bard. (C.R.)........................... 119,000 3,837,750
Galen Partners II, L.P. (Units)........ 3.599 (c) 3,351,033
Lilly (Eli)............................ 700,000 39,375,000
Pharmacia & UpJohn..................... 725,000 28,093,750
Roche Holdings......................... 2,100 16,605,286
Sandoz AG.............................. 20,000 18,301,559
Teva Pharmaceutical Industries, A.D.R.. 650,000 30,143,750
Warner-Lambert......................... 500,000 48,562,500
_______
228,132,240
_______
INDUSTRIAL SERVICES-3.2%. ENSCO International.................... 1,675,000 (a) 38,525,000
Noble Drilling......................... 1,850,000 (a) 16,650,000
U.S.A. Waste Services.................. 160,000 (a) 3,020,000
WMX Technologies....................... 900,000 26,887,500
_______
85,082,500
_______
PROCESS INDUSTRIES-10.2% Crown Cork & Seal...................... 1,900,000 (a) 79,325,000
duPont (E.I.) de Nemours............... 950,000 66,381,250
Grace (W.R.)........................... 300,000 17,737,500
Monsanto............................... 600,000 73,500,000
Praxair ............................... 1,000,000 33,625,000
_______
270,568,750
_______
PRODUCER
MANUFACTURING-11.4% AlliedSignal........................... 1,350,000 64,125,000
Cooper Industries...................... 1,100,000 40,425,000
Deere & Co............................. 1,450,000 51,112,500
GE Investment Private Placement
Partners I, L.P. (Units)............... 14.684 (c) 20,852,167
Goulds Pumps........................... 600,000 15,000,000
Honeywell.............................. 700,000 34,037,500
Raychem................................ 500,000 28,437,500
Xerox.................................. 350,000 47,950,000
_______
301,939,667
_______
RETAIL TRADE-5.9% Consolidated Stores..................... 600,000 (a) 13,050,000
Home Depot............................. 1,000,000 47,875,000
Home Shopping Network.................. 809,000 (a) 7,281,000
THE DREYFUS FUND INCORPORATED
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
________ ________
RETAIL TRADE (CONTINUED) Lowes................................. 1,050,000 $ 35,175,000
Wal-Mart Stores........................ 2,400,000 53,700,000
_______
157,081,000
_______
TECHNOLOGY SERVICES-1.8% General Motors, Cl. E.................. 900,000 46,800,000
_______
TRANSPORTATION-4.2% Burlington Northern Santa Fe........... 300,000 23,400,000
CSX.................................... 500,000 22,812,500
Kansas City Southern Industries........ 159,100 7,278,825
Tidewater.............................. 1,125,000 35,437,500
Union Pacific.......................... 350,000 23,100,000
_______
112,028,825
_______
TOTAL COMMON STOCKS
(cost $2,427,326,033)................ $2,626,874,616
=======
PRINCIPAL
SHORT-TERM INVESTMENTS-.5% AMOUNT
________
U.S. GOVERNMENT & AGENCY;
Federal Home Loan Mortgage,
5.70%, 1/2/1996...................... $12,500,000 $ 12,498,021
_______
TOTAL SHORT-TERM INVESTMENTS
(cost $12,498,021)................... $ 12,498,021
=======
TOTAL INVESTMENTS (cost $2,439,824,054)..................................... 99.5% $2,639,372,637
===== =======
CASH AND RECEIVABLES (NET).................................................. .5% $ 14,166,654
===== =======
NET ASSETS.................................................................. 100.0% $2,653,539,291
===== =======
</TABLE>
<TABLE>
THE DREYFUS FUND INCORPORATED
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Investment in non-controlled affiliates (cost $37,295,581)-see Note
1(d).
(c) Securities restricted as to public resale. Investments in restricted
securities with an aggregate market value of $67,535,609 represent
approximately 2.55% of net assets:
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE* NET ASSETS VALUATION+
___ __________ _______ _______ _____
<S> <C> <C> <C> <C>
GE Investment Private Placement
Partners I, L.P.(Units) 5/28/91-9/13/95 $1,120,352.90 .79% $1,420,060.41 per unit
Galen Partners II, L.P. (Units) 12/8/93-9/28/95 930,895.99 .13 930,895.99 per unit
SK Equity Fund, L.P. (Units) 12/16/92-10/27/95 1,081,140.30 1.34 1,687,603.08 per unit
Yorktown Energy Partners, L.P. (Units) 3/25/91-3/30/94 1,100,068.92 .29 1,100,068.92 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 limited
partnerships listed below:
<TABLE>
PORTION OF COMMITTED
ISSUER AMOUNTS UNINVESTED
___ ___________
<S> <C> <C>
Galen Partners II, L.P. (Units) $ 1,398,335
SK Equity Fund, L.P. (Units) 23,962,996
</TABLE>
See notes to financial statements.
<TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $2,439,824,054)-see statement................................... $2,639,372,637
Cash.................................................................... 102,579
Receivable for investment securities sold............................... 21,966,547
Dividends and interest receivable....................................... 4,924,647
Receivable for subscriptions to Capital Stock........................... 1,287,350
Prepaid expenses ....................................................... 154,344
_______
2,667,808,104
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 1,447,738
Payable for investment securities purchased............................. 11,207,106
Payable for Capital Stock redeemed...................................... 619,904
Net unrealized depreciation on forward currency
exchange contracts-Note 3(a).......................................... 309,848
Accrued expenses ....................................................... 684,217 14,268,813
_____ _______
NET ASSETS.................................................................. $2,653,539,291
=======
REPRESENTED BY:
Paid-in capital......................................................... $2,440,718,011
Accumulated undistributed net realized gain on investments.............. 13,582,545
Accumulated net unrealized appreciation on investments
and forward currency exchange contracts-Note 3(b)..................... 199,238,735
_______
NET ASSETS at value applicable to 254,719,659 shares outstanding
(300 million shares of $1 par value Capital Stock authorized)........... $2,653,539,291
=======
NET ASSET VALUE, offering and redemption price per share
($2,653,539,291 / 254,719,659 shares)................................... $10.42
=======
See notes to financial statements.
</TABLE>
<TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends:
Unaffiliated issuers (net of 18,055 foreign taxes withheld at source) $ 44,109,442
Affiliated issuers................................................ 64,208 $ 44,173,650
______
Interest.............................................................. 17,690,265
______
TOTAL INCOME.................................................... 61,863,915
EXPENSES:
Management fee-Note 2(a).............................................. 16,964,640
Shareholder servicing costs-Note 2(a)................................. 2,120,374
Custodian fees........................................................ 274,726
Prospectus and shareholders' reports.................................. 185,239
Professional fees..................................................... 162,812
Directors' fees and expenses-Note 2(b)................................ 84,197
Registration fees..................................................... 58,295
Miscellaneous......................................................... 29,639
______
TOTAL EXPENSES.................................................. 19,879,922
______
INVESTMENT INCOME-NET........................................... 41,983,993
______
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3(a).............................. $757,969,953
Net realized (loss) on forward currency exchange
contracts-Note 3(a)................................................... (3,052,503)
______
NET REALIZED GAIN............................................... 754,917,450
Net unrealized (depreciation) on investments:
Unaffiliated issuers.................................................. (205,791,210)
Affiliated issuers.................................................... (16,427,981) (222,219,191)
______ ______
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 532,698,259
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 574,682,252
=======
</TABLE>
See notes to financial statements.
<TABLE>
THE DREYFUS FUND INCORPORATED
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
___________________________________
1994 1995
________ ________
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 43,763,364 $ 41,983,993
Net realized gain on investments........................................ 115,978,966 754,917,450
Net unrealized (depreciation) on investments for the year............... (270,620,589) (222,219,191)
_______ _______
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... (110,878,259) 574,682,252
_______ _______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net................................................... (43,763,364) (41,983,993)
Net realized gain on investments........................................ (79,518,304) (785,802,043)
_______ _______
TOTAL DIVIDENDS....................................................... (123,281,668) (827,786,036)
_______ _______
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 6,662,064,854 8,936,161,261
Dividends reinvested.................................................... 105,591,624 715,713,497
Cost of shares redeemed................................................. (6,938,719,174) (9,190,532,165)
_______ _______
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..... (171,062,696) 461,342,593
_______ _______
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... (405,222,623) 208,238,809
NET ASSETS:
Beginning of year....................................................... 2,850,523,105 2,445,300,482
_______ _______
End of year............................................................. $ 2,445,300,482 $ 2,653,539,291
======== ========
SHARES SHARES
_______ _______
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 517,021,740 669,232,838
Shares issued for dividends reinvested.................................. 8,762,943 67,564,166
Shares redeemed......................................................... (538,493,724) (686,986,385)
_______ _______
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... (12,709,041) 49,810,619
======== ========
See 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 year indicated. This information
has been derived from the Fund's financial statements.
YEAR ENDED DECEMBER 31,
___________________________________________________________
PER SHARE DATA: 1991 1992 1993 1994 1995
___ ___ ___ ___ ___
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $10.80 $13.14 $13.27 $13.10 $11.93
___ ___ ___ ___ ___
INVESTMENT OPERATIONS:
Investment income-net........................ .34 .27 .24 .21 .22
Net realized and unrealized gain (loss) on investments 2.63 .44 .58 (.76) 2.57
___ ___ ___ ___ ___
TOTAL FROM INVESTMENT OPERATIONS........... 2.97 .71 .82 (.55) 2.79
___ ___ ___ ___ ___
DISTRIBUTIONS:
Dividends from investment income-net......... (.35) (.24) (.30) (.22) (.22)
Dividends in excess of investment income-net. - - (.03) - -
Dividends from net realized gain on investments (.28) (.34) (.66) (.40) (4.08)
___ ___ ___ ___ ___
TOTAL DISTRIBUTIONS........................ (.63) (.58) (.99) (.62) (4.30)
___ ___ ___ ___ ___
Net asset value, end of year................. $13.14 $13.27 $13.10 $11.93 $10.42
==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN.......................... 28.02% 5.53% 6.36% (4.26%) 23.77%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .78% .74% .74% .74% .74%
Ratio of net investment income to average net assets 2.65% 2.08% 1.67% 1.63% 1.56%
Portfolio Turnover Rate...................... 79.70% 55.42% 39.29% 27.70% 269.26%
Net Assets, end of year (000's Omitted)...... $2,996,663 $3,148,858 $2,850,523 $2,445,300 $2,653,539
See notes to financial statements.
</TABLE>
THE DREYFUS FUND INCORPORATED
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. 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 forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) 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.
(D) AFFILIATED ISSUERS: Issuers in which the Fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act.
THE DREYFUS FUND INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(E) 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.
(F) 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 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, 1995.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of the Manager, under a transfer agency agreement
for providing personnel and facilities to perform transfer agency services
for the Fund. Such compensation amounted to $111,707 for the period from
December 1, 1995 through December 31, 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:
(A) The following summarizes the aggregate amount of purchases and sales
of investment securities, excluding short-term securities and forward
currency exchange contracts, during the year ended December 31, 1995:
<TABLE>
PURCHASES SALES
_________ ________
<S> <C> <C>
Unaffiliated issuers........................................... $6,717,513,026 $6,724,806,093
Affiliated issuers............................................. 37,295,581 __
_________ ________
TOTAL.................................................... $6,754,808,607 $6,724,806,093
========= ========
</TABLE>
<TABLE>
THE DREYFUS FUND INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In addition, the following summarizes open forward currency exchange contracts at December 31, 1995:
FOREIGN
CURRENCY U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALES CONTRACTS AMOUNTS PROCEEDS VALUE (DEPRECIATION)
______ _______ ______ ______
<S> <C> <C> <C> <C>
Swiss Francs, expiring 3/18/96........... 33,167,991 $28,687,070 $28,965,148 $(278,078)
Swedish Krona, expiring 3/18/96.......... 208,817,365 31,218,958 31,250,728 (31,770)
____
$(309,848)
=====
</TABLE>
The Fund enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. 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 purchase
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. The Fund is also
exposed to credit risk associated with counter party nonperformance on these
forward currency exchange contracts which is typically limited to the
unrealized gains on such contracts that are recognized in the statement of
assets and liabilities.
(B) At December 31, 1995, accumulated net unrealized appreciation on
investments and forward currency exchange contracts was $199,238,735,
consisting of $255,763,085 gross unrealized appreciation and $56,524,350
gross unrealized depreciation.
At December 31, 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
REPORT OF ERNST & YOUNG LLP, 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, 1995, 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, 1995, 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, 1995, 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 and Young LLP signature logo]
New York, New York
February 12, 1996
THE DREYFUS FUND INCORPORATED
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $.229 per share as a
long-term capital gain distribution paid on June 27, 1995. The Fund hereby
designates $3.16 per share as a long-term capital gain distribution of the
$3.905 per share paid on December 27, 1995.
[Dreyfus lion "d" logo]
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
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 026AR9512
[Dreyfus logo]
The Dreyfus Fund Incorporated
Annual Report
December 31, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN THE DREYFUS FUND INCORPORATED AND THE STANDARD
& POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
___________________________________________
| | STANDARD | |
| | & POOR'S 500 | THE |
| PERIOD |COMPOSITE STOCK| DREYFUS |
| | PRICE INDEX * | FUND |
|-----------|---------------|--------------|
| 12/31/51 | 10,000 | 10,000 |
| 12/31/52 | 11,840 | 10,437 |
| 12/31/53 | 11,722 | 10,426 |
| 12/31/54 | 17,887 | 17,094 |
| 12/31/55 | 23,540 | 21,634 |
| 12/31/56 | 25,093 | 24,887 |
| 12/31/57 | 22,383 | 23,767 |
| 12/31/58 | 32,097 | 36,617 |
| 12/31/59 | 35,949 | 45,971 |
| 12/31/60 | 36,129 | 49,066 |
| 12/31/61 | 45,847 | 61,990 |
| 12/31/62 | 41,859 | 53,563 |
| 12/31/63 | 51,402 | 67,003 |
| 12/31/64 | 59,884 | 78,289 |
| 12/31/65 | 67,369 | 101,770 |
| 12/31/66 | 60,565 | 103,506 |
| 12/31/67 | 75,101 | 131,100 |
| 12/31/68 | 83,437 | 146,511 |
| 12/31/69 | 76,345 | 128,868 |
| 12/31/70 | 79,398 | 120,805 |
| 12/31/71 | 90,752 | 137,760 |
| 12/31/72 | 107,995 | 150,414 |
| 12/31/73 | 92,120 | 121,928 |
| 12/31/74 | 67,708 | 97,676 |
| 12/31/75 | 92,896 | 128,698 |
| 12/31/76 | 115,005 | 163,843 |
| 12/31/77 | 106,724 | 163,899 |
| 12/31/78 | 113,768 | 183,947 |
| 12/31/79 | 134,702 | 230,811 |
| 12/31/80 | 178,345 | 301,036 |
| 12/31/81 | 169,606 | 317,341 |
| 12/31/82 | 205,902 | 362,707 |
| 12/31/83 | 252,229 | 434,405 |
| 12/31/84 | 268,120 | 448,407 |
| 12/31/85 | 354,455 | 560,839 |
| 12/31/86 | 420,029 | 652,370 |
| 12/31/87 | 441,870 | 708,583 |
| 12/31/88 | 516,104 | 770,529 |
| 12/31/89 | 678,677 | 952,677 |
| 12/31/90 | 656,960 | 920,941 |
| 12/31/91 | 857,332 | 1,178,926 |
| 12/31/92 | 923,347 | 1,244,137 |
| 12/31/93 | 1,016,235 | 1,323,210 |
| 12/31/94 | 1,029,548 | 1,266,843 |
| 12/31/95 | 1,415,938 | 1,567,998 |
-----------------------------------------
*Source: Lipper Analytical Services, Inc.
