The Dreyfus Fund
Incorporated
SEMIANNUAL REPORT
June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
12 Statement of Financial Futures
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
16 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
The Dreyfus Fund
Incorporated
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for The Dreyfus Fund
Incorporated, covering the six-month period from January 1, 2000 through June
30, 2000. Inside, you'll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, Timothy M. Ghriskey.
While stock prices were little changed on average over the past six months, the
period was marked by high levels of volatility and dramatic shifts in investor
sentiment. Between January and mid-March, large-cap stocks generally continued
to advance, led by fast-growing technology stocks that, many investors believed,
would benefit most from the "new economy." Subsequently, however, technology
stocks corrected sharply over concerns about rising interest rates and extremely
high valuations. Other sectors of the large-cap stock market also declined,
erasing the gains achieved earlier in the year.
Also, primarily because of the precipitous drop in technology stock prices,
value-oriented stocks generally outperformed growth stocks during the reporting
period, a reversal of the trend established over the past several years. In
addition, small-capitalization stocks generally outperformed large-cap stocks,
particularly in the value-oriented segment of the market. In our view, these
short-term swings in investor sentiment highlight once again the importance of
broad diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in The Dreyfus Fund Incorporated.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF FUND PERFORMANCE
Timothy M. Ghriskey, Senior Portfolio Manager
How did The Dreyfus Fund Incorporated perform relative to its benchmark?
For the six-month period ended June 30, 2000, the fund's total return was
-2.35%.(1) The fund's benchmark, the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500 Index"), produced a total return of -0.43%.(2)
We attribute the fund's absolute performance to uncertainties regarding the
sustainability of domestic economic growth in the face of rising interest rates.
These uncertainties caused sharp swings in investor sentiment, driving various
investment styles and market sectors in and out of favor during the first six
months of 2000. Prices for the types of well-established, high quality companies
in which the fund invests ended the period relatively unchanged. Additionally,
disappointing individual stock selections, particularly among consumer staples
companies, hurt the fund's performance relative to the S&P 500 Index.
What is the fund's investment approach?
The Dreyfus Fund Incorporated invests primarily in stocks of well-established
U.S. companies that we believe demonstrate potential to outperform the S&P 500
Index with less volatility. Our investment approach targets both growth- and
value-oriented stocks, while maintaining a somewhat conservative bias in favor
of value. In short, we seek growth at a reasonable price.
Our disciplined investment process sifts through over 1,500 equity securities to
identify the relatively small number of stocks that best meet our criteria. We
start with computerized, quantitative analysis of all potential targets, scoring
each stock on a wide range of growth, valuation, leverage, earnings surprise,
momentum and risk factors. Our team of experienced analysts then further narrow
the field by examining the specifics of each top-ranked candidate. We observe
their
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
operations, interview corporate management and conduct detailed research and
analysis of the competitive environment, seeking catalysts likely to spark a
change in a company's market value. Armed with these analytical insights, we
decide which stocks to purchase and whether any current holdings should be sold.
What other factors influenced the fund's performance?
During the first few months of the period, the fund was affected by the market's
narrow emphasis on growth-oriented technology stocks, many of which had little
or no earnings. Because our management discipline emphasizes value-conscious
investing, results suffered in this environment. Later in the period, however,
investors displayed renewed interest in company fundamentals and market strength
broadened to include a wider range of stocks, creating a more positive
environment for the portfolio.
Throughout the period, the market's high level of volatility and uncertainty
constrained our efforts to produce higher returns than the S&P 500 Index. Our
investment approach allows us the flexibility to take larger positions than the
S&P 500 Index in industry sectors that we believe are likely to lead the
market's performance. However, in light of the market's volatility and, in our
opinion, the absence of clear market leadership from any particular sector, we
chose to allocate approximately the same percentage of assets to various sectors
as the S&P 500 Index. For example, we held approximately the same percentage of
capital goods, utilities, consumer staples and technology stocks as the S&P 500
Index. As a result, our performance relative to the S&P 500 Index depended
largely on the performance of our individual holdings within sectors.
In some sectors, we succeeded in outperforming the S&P 500 Index. For example,
we held relatively large positions in strong-performing capital goods companies,
such as General Electric, which delivered better than expected earnings, and
Emerson Electric, which made progress in emphasizing its core electrical
component business. We also realized relatively strong returns from utility
holdings, such as Coastal,
which benefited from rising oil and gas prices. However, these gains were
outweighed by disappointing results from the consumer staples sector and, to a
lesser degree, technology. Several of our consumer staples holdings, such as
AT&T-Liberty Media Group Class A shares and Procter & Gamble, suffered from a
variety of company-specific problems that hurt stock prices. In technology, we
achieved positive returns, but failed to match the S&P 500 Index's strong
performance. That's because we held relatively small positions in some of the
technology companies that performed best during the period, such as Micron
Technology and Corning, and held relatively large positions in a few laggards,
such as Electronic Data Systems and America Online.
What is the fund's current strategy?
As of the end of the reporting period, we believe that market conditions remain
volatile and the market's direction remains unclear. Accordingly, we have chosen
to continue approximately matching our benchmark's allocation of assets among
industry sectors, rather than emphasizing particular sectors. We continue to
adhere to our value-conscious investment discipline while seeking to outperform
the S&P 500 Index.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET
PERFORMANCE.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
June 30, 2000 (Unaudited)
COMMON STOCKS--98.8% Shares Value ($)
------------------------------------------------------------------------------------------------
<S> <C> <C>
AUTO RELATED--.0%
Visteon 32,995 (a) 400,066
COMMERCIAL SERVICES--.5%
McGraw-Hill Cos. 234,000 12,636,000
CONSUMER DURABLES--.6%
Ford Motor 252,000 10,836,000
General Motors 104,542 6,069,970
16,905,970
CONSUMER NON-DURABLES--5.2%
Anheuser-Busch Cos. 96,000 7,170,000
Coca-Cola 751,000 43,135,562
Estee Lauder, Cl. A 134,000 6,624,625
Gillette 246,000 8,594,625
NIKE, Cl. B 142,000 5,653,375
Nabisco Group Holdings 125,800 3,262,937
PepsiCo 368,000 16,353,000
Philip Morris Cos. 993,000 26,376,562
Procter & Gamble 369,000 21,125,250
138,295,936
CONSUMER SERVICES--4.5%
Carnival 125,000 2,437,500
Cendant 525,000 (a) 7,350,000
Clear Channel Communications 148,000 (a) 11,100,000
Comcast, Cl. A 289,100 11,708,550
Disney (Walt) 683,000 26,508,937
McDonald's 277,000 9,123,687
Time Warner 262,000 19,912,000
Viacom, Cl. B 459,310 (a) 31,319,201
119,459,875
ELECTRONIC COMPONENTS--15.3%
Agilent Technologies 79,216 5,842,179
Applied Materials 169,000 (a) 15,315,625
Cisco Systems 1,454,000 92,419,875
Flextronics International 101,200 (a) 6,951,175
Intel 700,000 93,581,250
JDS Uniphase 106,000 (a) 12,706,750
Lucent Technologies 988,000 58,539,000
Micron Technology 162,000 (a) 14,266,125
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS (CONTINUED)
Motorola 459,000 13,339,687
Nortel Networks 619,000 42,246,750
Qualcomm 220,000 13,200,000
Tellabs 189,000 (a) 12,934,687
Texas Instruments 350,000 24,040,625
405,383,728
ELECTRONIC HARDWARE--10.0%
Apple Computer 67,400 (a) 3,530,075
Boeing 276,000 11,540,250
Compaq Computer 469,000 11,988,812
Dell Computer 537,100 (a) 26,485,744
EMC 453,000 (a) 34,852,687
General Dynamics 39,000 2,037,750
Hewlett-Packard 207,700 25,936,537
International Business Machines 603,000 66,066,187
Network Appliance 64,000 (a) 5,152,000
Nokia, ADS 118,000 5,892,625
Scientific-Atlanta 199,300 14,847,850
Sun Microsystems 493,000 (a) 44,832,187
United Technologies 207,000 12,187,125
265,349,829
ENERGY MINERALS--4.6%
BP Amoco, ADS 339,720 19,215,413
Chevron 135,000 11,449,687
Exxon Mobil 721,721 56,655,099
Royal Dutch Petroleum, ADR 446,000 27,456,875
Texaco 125,000 6,656,250
121,433,324
FINANCE--13.0%
AXA Financial 216,000 7,344,000
American Express 456,000 23,769,000
American General 122,000 7,442,000
American International Group 508,250 59,719,375
Associates First Capital, Cl. A 235,400 5,252,363
Bank One 232,800 6,183,750
Bank of America 356,000 15,308,000
Bank of New York 223,600 10,397,400
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------
FINANCE (CONTINUED)
Chase Manhattan 268,500 12,367,781
Citigroup 1,127,500 67,931,875
Federal Home Loan Mortgage 141,000 5,710,500
Federal National Mortgage Association 208,000 10,855,000
First Union 377,000 9,354,313
FleetBoston Financial 453,000 15,402,000
GE Investment Private Placement
Partners 1, L.P. (Units) 5.798 (b) 8,909,247
Goldman Sachs Group 75,000 7,115,625
Merrill Lynch 85,000 9,775,000
Morgan (J.P.) 106,700 11,750,338
Morgan Stanley Dean Witter & Co. 239,000 19,896,750
Schwab (Charles) 277,500 9,330,938
Wells Fargo 502,000 19,452,500
343,267,755
HEALTH SERVICES--.3%
HCA-Healthcare 274,000 8,322,750
HEALTH TECHNOLOGY--10.9%
Abbott Laboratories 341,000 15,195,813
American Home Products 404,000 23,735,000
Amgen 304,000 (a) 21,356,000
Bristol-Myers Squibb 208,000 12,116,000
Galen Partners ll, L.P. (Units) 2.920 (b) 2,382,635
Guidant 64,000 (a) 3,168,000
Johnson & Johnson 290,000 29,543,750
Lilly (Eli)& Co. 228,500 22,821,438
Medtronic 238,000 11,855,375
Merck & Co. 488,000 37,393,000
Pfizer 1,383,500 66,408,000
Pharmacia 125,400 6,481,613
Schering-Plough 573,000 28,936,500
Watson Pharmaceuticals 148,000 7,955,000
289,348,124
INDUSTRIAL SERVICES--.8%
Cooper Cameron 37,000 (a) 2,442,000
Halliburton 96,000 4,530,000
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES (CONTINUED)
Schlumberger 179,000 13,357,875
Yorktown Energy Partners, L.P. (Units) 0.775 (b) 1,167,695
21,497,570
NON-ENERGY MINERALS--.6%
Alcoa 410,000 11,890,000
Lone Star Technologies 18,900 (a) 874,125
Phelps Dodge 115,000 4,276,563
17,040,688
PROCESS INDUSTRIES--1.8%
Corning 58,000 15,652,750
Dow Chemical 150,000 4,528,125
duPont (E.I.) deNemours 220,000 9,625,000
International Paper 100,000 2,981,250
PPG Industries 38,000 1,683,875
Union Carbide 259,000 12,820,500
47,291,500
PRODUCER MANUFACTURING--6.7%
Caterpillar 81,000 2,743,875
Emerson Electric 206,000 12,437,250
General Electric 2,064,000 109,392,000
Honeywell International 251,125 8,459,773
Illinois Tool Works 58,000 3,306,000
Minnesota Mining & Manufacturing 150,000 12,375,000
Tyco International 589,200 27,913,350
176,627,248
RETAIL TRADE--5.4%
Gap 175,000 5,468,750
Home Depot 480,500 23,994,969
May Department Stores 102,000 2,448,000
SK Equity Fund, L.P. (Units) 16.484 (b) 42,807,832
Sears, Roebuck & Co. 191,000 6,231,375
Staples 103,000 1,583,625
Target 97,000 5,626,000
Wal-Mart Stores 939,000 54,109,875
142,270,426
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------
TECHNOLOGY SERVICES--9.1%
America Online 481,000 25,372,750
Automatic Data Processing 129,000 6,909,563
BroadVision 164,000 (a) 8,333,250
Computer Associates International 122,000 6,244,875
eBay 12,000 (a) 651,750
Electronic Data Systems 219,000 9,033,750
Microsoft 1,100,000 (a) 88,000,000
Oracle 820,000 (a) 68,931,250
Veritas Software 112,000 (a) 12,657,750
Yahoo! 112,000 (a) 13,874,000
240,008,938
UTILITIES--9.5%
AES 214,000 (a) 9,763,750
ALLTEL 69,000 4,273,688
AT&T 913,349 28,884,662
AT&T--Liberty Media Group, Cl. A 570,000 (a) 13,822,500
Bell Atlantic 89,000 4,522,313
BellSouth 424,000 18,073,000
Coastal 448,000 27,272,000
Duke Energy 80,000 4,510,000
Enron 217,000 13,996,500
GTE 397,000 24,713,250
NEXTEL Communications, Cl. A 160,000 (a) 9,790,000
SBC Communications 649,288 28,081,706
Sprint (FON Group) 245,800 12,535,800
Sprint (PCS Group) 188,000 (a) 11,186,000
U S West 157,000 13,462,750
WorldCom 594,550 (a) 27,274,981
252,162,900
TOTAL COMMON STOCKS
(cost $1,846,106,296) 2,617,702,627
Principal
SHORT-TERM INVESTMENTS--2.2% Amount ($) Value ($)
----------------------------------------------------------------------------------------
U.S GOVERNMENT AGENCY--2.1%
Federal Home Loan Banks,
6.57%, 7/3/2000 56,250,000 56,229,469
U.S. TREASURY BILLS--.1%
5.82%, 8/3/2000 2,028,000 (c) 2,018,367
TOTAL SHORT-TERM INVESTMENTS
(cost $58,246,649) 58,247,836
------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $1,904,352,945) 101.0% 2,675,950,463
LIABILITIES, LESS CASH AND RECEIVABLES (1.0%) (25,610,295)
NET ASSETS 100.0% 2,650,340,168
(a) NON-INCOME PRODUCING.
(b) SECURITIES RESTRICTED AS TO PUBLIC RESALE. INVESTMENTS IN RESTRICTED
SECURITIES WITH AN AGGREGATE MARKET VALUE OF $55,267,409 REPRESENTING
APPROXIMATELY 2.1% OF NET ASSETS.
(c) PARTIALLY HELD BY THE CUSTODIAN IN A SEGRAGATED ACCOUNT AS COLLATERAL FOR
OPEN FINANCIAL FUTURES POSITIONS.
</TABLE>
<TABLE>
Net
Acquisition Purchase Assets
Issuer Date Price ($)* (%) Valuation ($)**
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GE Investment Private Placement
Partners I, L.P. (Units) 5/28/91-9/13/95 1,536,607 .34 1,536,607 per unit
Galen Partners II, L.P. (Units) 1/28/93-1/3/97 815,971 .09 815,971 per unit
SK Equity Fund, L.P. (Units) 12/6/92-10/30/96 719,753 1.62 2,596,932 per unit
Yorktown Energy Partners, L.P.
(Units) 3/5/91-9/15/95 1,567,332 .04 1,506,703 per unit
* AVERAGE COST.
** THE VALUATION OF THESE SECURITIES HAS BEEN DETERMINED IN GOOD FAITH UNDER
THE DIRECTION OF THE BOARD OF DIRECTORS.
</TABLE>
SUBJECT TO CERTAIN LIMITATIONS, THE FUND HAS COMMITMENTS TO INVEST IN THE
LIMITED PARTNERSHIP LISTED BELOW:
--------------------------------------------------------------------------------
Portion of Committed
Issuer Amounts Uninvested
--------------------------------------------------------------------------------
Galen Partners II, L.P. (Units) $147,742
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF FINANCIAL FUTURES
<TABLE>
June 30, 2000 (Unaudited)
Market Value Unrealized
Covered (Depreciation)
Contracts by Contracts ($) Expiration at 6/30/2000 ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL FUTURES LONG
Standard & Poor's 500 5 1,835,125 September 2000 (15,102)
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 1,904,352,945 2,675,950,463
Dividends receivable 10,514,279
Receivable for investment securities sold 1,196,712
Receivable for futures variation margin-Note 4(a) 47,926
Prepaid expenses 59,245
2,687,768,625
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 1,586,184
Cash overdraft due to Custodian 3,231,035
Payable for investment securities purchased 29,058,896
Payable for shares of Capital Stock redeemed 3,250,485
Accrued expenses 301,857
37,428,457
--------------------------------------------------------------------------------
NET ASSETS ($) 2,650,340,168
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 1,791,418,925
Accumulated undistributed investment income--net 8,295,078
Accumulated net realized gain (loss) on investments 79,043,749
Accumulated net unrealized appreciation (depreciation)
on investments [including ($15,102) net unrealized
(depreciation) on financial futures]-Note 4(b) 771,582,416
--------------------------------------------------------------------------------
NET ASSETS ($) 2,650,340,168
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(500 million shares of $1 par value Capital Stock authorized) 207,292,369
NET ASSET VALUE, offering and redemption price per share ($) 12.79
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $88,350 foreign taxes withheld at source) 20,079,298
Interest 3,196,348
TOTAL INCOME 23,275,646
EXPENSES:
Management fee--Note 3(a) 8,456,509
Shareholder servicing costs--Note 3(a) 663,057
Prospectus and shareholders' reports 113,729
Professional fees 103,892
Custodian fees--Note 3(a) 83,176
Directors' fees and expenses--Note 3(b) 44,993
Registration fees 14,650
Loan commitment fees--Note 2 10,057
Interest expense--Note 2 2,219
Miscellaneous 16,068
TOTAL EXPENSES 9,508,350
INVESTMENT INCOME--NET 13,767,296
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 89,302,615
Net realized gain (loss) on financial futures (2,820,937)
NET REALIZED GAIN (LOSS) 86,481,678
Net unrealized appreciation (depreciation)
on investments [including ($15,102) net
unrealized (depreciation) on financial futures] (165,819,546)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (79,337,868)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (65,570,572)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 13,767,296 11,428,498
Net realized gain (loss) on investments 86,481,678 115,288,140
Net unrealized appreciation (depreciation)
on investments (165,819,546) 449,043,472
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (65,570,572) 575,760,110
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (5,169,143) (12,722,630)
Net realized gain on investments (31,364,897) (183,841,821)
TOTAL DIVIDENDS (36,534,040) (196,564,451)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 446,692,592 679,848,709
Dividends reinvested 31,345,924 167,780,735
Cost of shares redeemed (556,218,532) (982,845,166)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (78,180,016) (135,215,722)
TOTAL INCREASE (DECREASE) IN NET ASSETS (180,284,628) 243,979,937
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 2,830,624,796 2,586,644,859
END OF PERIOD 2,650,340,168 2,830,624,796
Undistributed investment income--net 8,295,078 --
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 35,129,293 55,665,487
Shares issued for dividends reinvested 2,443,484 13,414,475
Shares redeemed (43,497,711) (80,406,477)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (5,924,934) (11,326,515)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
June 30, 2000 Year Ended December 31,
------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 13.28 11.52 9.93 10.82 10.42 11.93
Investment Operations:
Investment income--net .07(a) .05(a) .10 10 .08 .22
Net realized and unrealized
gain (loss) on investments (.38) 2.65 1.60 1.01 1.57 2.57
Total from Investment Operations (.31) 2.70 1.70 1.11 1.65 2.79
Distributions:
Dividends from investment
income--net (.03) (.06) (.11) (.08) (.09) (.22)
Dividends from net realized
gain on investments (.15) (.88) -- (1.78) (1.16) (4.08)
Dividends in excess of net
realized gain on investments -- -- -- (.14) -- --
Total Distributions (.18) (.94) (.11) (2.00) (1.25) (4.30)
Net asset value,
end of period 12.79 13.28 11.52 9.93 10.82 10.42
-----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (2.35)(b) 24.07 17.15 10.75 15.85 23.77
-----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .35(b) .71 .73 .71 .73 .74
Ratio of net investment income
to average net assets .51(b) .43 .82 .85 .70 1.56
Portfolio Turnover Rate 31.42(b) 58.61 109.61 201.10 220.92 269.26
-----------------------------------------------------------------------------------------------------------------------
Net Assets,
end of period ($ x 1,000) 2,650,340 2,830,625 2,586,645 2,628,072 2,698,767 2,653,539
(a) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(b) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
The Dreyfus Fund Incorporated (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified open-end
management investment company. The fund's investment objective is to provide
investors with long-term capital growth consistent with the preservation of
capital. The Dreyfus Corporation (the "Manager") serves as the fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon"),
which is a wholly-owned subsidiary of Mellon Financial Corporation. Effective
March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned subsidiary
of the Manager, became the distributor of the fund's shares, which are sold to
the public without a sales charge. Prior to March 22, 2000, Premier Mutual Fund
Services, Inc. was the distributor.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including financial futures)
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.
(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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 and 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. Under the terms of the custody agreement, the fund received net
earnings credits of $39,773 based on available cash balances left on deposit.
Income earned under this arrangement is included in interest income.
(d) 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 of 1986, as
amended (the "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.
(e) 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 Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings.
The average daily amount of borrowings outstanding during the period ended June
30, 2000 was approximately $59,900 with a related weighted average annualized
interest rate of 7.45%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement (the "Agreement") with the Manager, the
management fee is payable monthly, based on the following annual percentages of
the value of the fund's average daily 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 Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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. During the period
ended June 30, 2000, the fund was charged $450,320 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended June 30, 2000, the fund was
charged $83,176 pursuant to the custody agreement.
(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.
(c) During the period ended June 30, 2000, the fund incurred total brokerage
commissions of $1,212,199, of which $59,427 was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period ended
June 30, 2000, amounted to $833,058,841 and $972,591,200, respectively.
The fund may invest in financial futures contracts in order to gain exposure to
or protect against changes in the market. The fund is exposed to market risk as
a result of changes in the value of the underlying financial instruments.
Investments in financial futures require the fund to "mark to market" on a daily
basis, which reflects the change in the market value of the contract at the
close of each day's trading. Accordingly, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the fund recognizes a realized gain or loss. These investments require
initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. Contracts open at June 30, 2000 are set
forth in the Statement of Financial Futures.
(b) At June 30, 2000, accumulated net unrealized appreciation on investments and
financial futures was $771,582,416, consisting of $841,860,546 gross unrealized
appreciation and $70,278,130 gross unrealized depreciation.
At June 30, 2000, 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 Fund
For More Information
The Dreyfus Fund Incorporated
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call
1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to
[email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 026SA006
