LETTER TO SHAREHOLDERS
Dear Shareholder:
Although the total return, based upon the net asset value per share, of
Dreyfus Capital Growth Fund (A Premier Fund) was positive for the latest
three months of the fiscal year ended September 30, 1994, the improvement did
not offset losses sustained earlier in the year, mainly in the credit markets
here and abroad. Accordingly, the total return for the 12-month period ended
September 30, 1994 was -1.50%, based upon net asset value per share,* which
compares with total returns of 3.68% for the Standard & Poor's 500 Composite
Stock Price Index and 11.11% for the Dow Jones Industrial Average.**
One of the material events affecting the performance of the portfolio
occurred during the first half of the fiscal year when the price of European
bonds held by the Fund declined, contrary to our expectations. About 12% of
the portfolio earlier in the year represented Government bonds of Germany,
the Netherlands and France. They were purchased in the belief that, in order
to stimulate their lagging economies, those countries would cut interest
rates. However, economic recovery took hold earlier than expected, resulting
in higher interest rates. Consequently, those bonds were sold at a loss.
A good deal of the money was transferred into U.S. Treasury short-term
notes and bonds. These produced rewarding yields but nonetheless there has
been some unrealized principal loss on these debt obligations, resulting from
the rise in interest rates here at home.
The U.S. common stock holdings in the portfolio, accounting for 46.1% of
the portfolio as of September 30, have fared much better. Here there have
been unrealized gains that came close to offsetting the losses on debt
securities.
Sectors that have performed well include Consumer Staples, such as Philip
Morris Cos. and Gillette; the Health Care stocks, where our major holdings
include Merck & Co. and Pfizer; the Process Industries such as Greif Brothers
Cl.A and OM Group; Basic Industries, where the largest holding is Champion
International; and Retail Trade where Waban performed best.
Recently, we have been reinvesting in the utility industry, whose stocks
have been selling at deeply depressed prices. As of September 30, our utility
holdings, amounting to 3.7%, which represented about half the weighting in
the Standard & Poor's 500 Composite Stock Price Index, showed a modest
unrealized loss. However, we expect recovery to take hold in that sector.
Nearly 10% of the total portfolio is in foreign stocks and, overall,
shows gratifying unrealized gains for the 12-month period. The best
performers in this group have been The News Corp. Ltd.ADS (Australia), Pan
Holding (Luxembourg) and Comcast U.K. Cable Partners, Cl.A. Our stake in
Japanese equities, totaling 2.69% of the Fund's portfolio, was not profitable
at the end of the fiscal year, as was also the case with smaller holdings in
France and Switzerland.
As we see the world economy, interest rates are having an inordinate
effect on securities prices. By most measurements, the U.S. economy is in a
strong growth phase, and recoveries are under way in Western Europe and in
Japan. In this country, corporate profits _ with a few notable exceptions _
are running at record rates. Yet this is not being reflected in the equity
markets, mainly due to the fear of rising interest rates.
In view of these uncertainties, we have increased the Fund's
cash-equivalent holdings from less than 1% six months ago to approximately
17.5% on September 30.
Caution is in order until a more stable trend can be perceived in the
securities markets, particularly in the level of bond prices.
Meanwhile, we regard the cash position and the 27% of assets held in
income-producing U.S. Notes and Bonds as a reserve, to
be used when stock prices become more attractive.
Sincerely,
(logo signature)
Howard Stein
Chairman and Chief Executive Officer
The Dreyfus Corporation
October 24, 1994
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. Unlike the Fund, which may invest in a wide range of
securities, both the Dow Jones Industrial Average and the Standard &
Poor's 500 Composite Stock Price Index are widely accepted unmanaged
indexes of domestic stock market performance.
PERFORMANCE
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS CAPITAL GROWTH
FUND (A PREMIER FUND) AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX
Exhibit A
* Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
% Return Reflecting
% Return Without Maximum Initial
PERIOD ENDED 9/30/94 Sales Charge Sales Charge (3.0%)
--------------------- ------------------- ---------------------
<S> <C> <C>
1 Year (1.50)% (4.44)%
5 Years 8.68 8.02
10 Years 12.65 12.31
From Inception (6/23/69) 11.30 11.16
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Dreyfus Capital
Growth Fund on 6/23/69 (Inception Date) to a $10,000 investment made in the
Standard and Poor's 500 Composite Stock Price Index on that date. For
comparative purposes the value of the Index on 6/30/69 is used as the
beginning value on 6/23/69. All dividends and capital gain distributions are
reinvested.
The Fund's performance takes into account all applicable fees and expenses.
The Standard and 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 Condensed Financial Information section of the Prospectus
and elsewhere in this report.
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
ASSET ALLOCATION AS OF SEPTEMBER 30, 1994
Exhibit b
<TABLE>
<CAPTION>
FIVE LARGEST SECTORS
AS OF SEPTEMBER 30, 1994 AS OF SEPTEMBER 30, 1993
<C> <C> <S> <C>
Consumer Staples*............ 18.6% Consumer Growth Staples..... 16.1%
Foreign...................... 7.8 Energy...................... 11.4
Basic Industries............. 6.6 Technology.................. 7.4
Energy....................... 5.5 Capital Goods............... 5.6
Capital Goods................ 5.3 Consumer Staples............ 4.2
</TABLE>
* Note that Consumer Growth Staples has been incorporated into Consumer
Staples (Consumer Growth Staples 10.8% and Consumer Staples 7.8%).
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS AS OF SEPTEMBER 30, 1994
<C> <C>
Merck & Co...................................................... 3.5%
Philip Morris Cos............................................... 3.2
American Home Products.......................................... 2.9
Pan Holding..................................................... 2.1
BBC Brown Boveri AG............................................. 1.7
Cooper Industries............................................... 1.6
News, ADS....................................................... 1.6
Gillette........................................................ 1.6
Household International......................................... 1.4
CNA Financial................................................... 1.4
All percentages shown above are based on Total Net Assets.
</TABLE>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
COMMON STOCK PURCHASES AND SALES
YEAR ENDED SEPTEMBER 30, 1994
PURCHASES*
New Commitments:
Abitibi-Price, Aiwa, Allegheny Power System, American Electric
Power, Archer-Daniels-Midland, Asahi Tec, BBC Brown Boveri AG, Bombay,
Bowater, Bridgestone, Bristol-Myers Squibb, Canon, Chubu Steel Plate,
Club Mediterranee, CNA Financial, Champion International, Comcast UK
Cable Partners, CI. A, Disco, Dominion Resources, Dow Chemical, Foster
Wheeler, General Public Utilities, Global Marine, Hitachi Chemical,
Household International, International Paper, Kanamoto, Kyocera,
Lubrizol, Makino Milling, NEC, Ngk Spark Plug, Nichiei, Nissho-Iwai,
Nomura Securities, Norfolk Southern, PacifiCorp, Promise, Public Service
Enterprise Group, Rohm, Rowan Cos., Sega Enterprises, Sharp, Stone
Container, Sumitomo, Takada Kiko, Temple-Inland, Tokki, Witco, Yurtec.
Additions:
American Home Products, Cooper Industries, Kaufman & Broad Home,
Marion Merrell Dow, Philip Morris Cos., WMX Technologies.
SALES
Reductions:
Baker Hughes, CBI Industries, Diamond Shamrock, IBP, Illinois Tool
Works, Johnson & Johnson, Pennzoil, Tyco International, WHX.
Eliminations:
A.L. Labs Cl. A, Ahold NV, Amsouth Bancorp, BankAmerica, Bank of
Boston, Banque National De Paris, Barnett Banks, Baxter International,
Boeing, British Petroleum ADS, CBS, CMAC Investments, Calgon Carbon,
Campbell Soup, Capital RE, Chase Manhattan, Cliffs Drilling, Coastal,
Colgate-Palmolive, Columbia/HCA Healthcare, Coltec Industries, Comcast,
Comerica, DDI, Daido Metal, Excalibur, First Interstate Bancorp, First
Union, Fluor, General Motors Cl. E, Grainger (W.W.), Grupo Carso Ord
`A1', Healthcare and Retirement, Hibernia Cl. A, Intel, Kimberly Clark
Cl. A, LTV, Lilly (Eli), Lukens, Medical Care America, National City,
Norsk Hydro ADR, Novacare, Novell, O'Sullivan Industries, ONBANCorp,
Parker-Hannifin, Payless Cashways, Perkin-Elmer, Pool Energy Services,
QVC, RJR Nabisco Holdings, Raychem, Reliance, St. Paul Bancorp, Sears,
Cl. B, Shawmut National, Symbol Technologies, Tektronix, Telefonos De
Mexico ADS, Texaco, Time Warner, Westwood One, Weyerhaeuser, Wheelabrator
Technologies.
Elimination of Securities Acquired During the Period:
Browning-Ferris Industries, Miura.
*Increases resulting from stock splits and distributions are not shown.
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1994
COMMON STOCKS-55.7% SHARES VALUE
---------- ------------
<S> <C> <C> <C>
BASIC INDUSTRIES-6.6% Abitibi-Price.................... 100,000(a) $ 1,512,500
Bowater.......................... 100,000 2,912,500
Champion International........... 165,000 6,393,750
Foster Wheeler................... 150,000 5,156,250
Grace (W.R.)..................... 50,000 2,075,000
International Paper.............. 70,000 5,495,000
OM Group......................... 130,000 2,624,375
Stone Container.................. 100,000(a) 1,950,000
Temple-Inland.................... 100,000 5,525,000
WHX ............................. 150,000(a) 2,568,750
Witco ........................... 50,000 1,437,500
-----------
37,650,625
-----------
CAPITAL GOODS-5.3% CBI Industries................... 50,000 1,356,250
Cooper Industries................ 225,000 9,056,250
Greif Brothers, Cl. A............ 90,000 3,903,750
Illinois Tool Works.............. 84,000 3,591,000
Norfolk Southern................. 125,000 7,781,250
WMX Technologies................. 150,000 4,331,250
-----------
30,019,750
-----------
CHEMICALS-2.2% Dow Chemical..................... 100,000 7,825,000
Lubrizol......................... 150,000 4,668,750
-----------
12,493,750
-----------
CONGLOMERATES-.7% Tyco International............... 50,000 2,375,000
Whitman.......................... 100,000 1,675,000
-----------
4,050,000
-----------
CONSUMER CYCLICAL-.6% Bombay........................... 37,200(a) 492,900
Waban............................ 150,000(a) 2,943,750
-----------
3,436,650
-----------
CONSUMER STAPLES-18.6% American Home Products........... 276,400 16,584,000
Archer-Daniels-Midland........... 155,000 4,030,000
Bristol-Myers Squibb............. 81,800 4,693,275
Dean Foods....................... 100,000 3,025,000
Genzyme.......................... 45,000(a) 1,541,250
Gillette......................... 125,000 8,843,750
IBP.............................. 105,000 3,438,750
Johnson & Johnson................ 100,000 5,162,500
Marion Merrell Dow............... 110,000 2,557,500
Merck & Co....................... 564,481 20,039,075
News, ADS........................ 175,000 8,859,375
Pfizer........................... 100,000 6,912,500
Philip Morris Cos................ 300,000 18,337,500
Tyson Foods, Cl. A............... 100,000 2,400,000
-----------
106,424,475
-----------
CREDIT CYCLICAL-.8% Kaufman & Broad Home............. 325,000 4,428,125
-----------
ENERGY-5.5% Arethusa (OFF-Shore) ............ 465,000(a) 4,940,625
Baker Hughes..................... 250,000 4,656,250
Diamond Shamrock................. 65,000 1,673,750
Dresser Industries............... 320,000 6,480,000
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
----------- ------------
ENERGY (CONTINUED) Global Marine.................... 579,500(a) $ 2,462,875
Pennzoil......................... 145,000 6,796,875
Rowan Cos........................ 600,000(a) 4,350,000
-----------
31,360,375
-----------
FINANCIAL-3.3% CNA Financial.................... 125,000(a) 7,875,000
Equitable of Iowa................ 89,700 3,229,200
Household International.......... 225,000 8,043,750
-----------
19,147,950
-----------
TECHNOLOGY-.2% Comcast UK Cable Partners, Cl. A 50,000 956,250
-----------
TRANSPORTATION-.4% Overseas Shipholding............. 100,000 2,175,000
-----------
UTILITIES-3.7% Allegheny Power Systems.......... 200,000 4,025,000
American Electric Power.......... 125,000 3,921,875
Dominion Resources............... 55,400 2,063,650
General Public Utilities......... 125,000 3,093,750
PacifiCorp....................... 225,000 3,796,875
Public Service Enterprise ....... 150,000 3,937,500
-----------
20,838,650
-----------
FOREIGN-7.8% Aiwa............................. 34,000 843,996
Asahi Tec........................ 20,000 185,873
BBC Brown Boveri AG.............. 11,000 9,483,495
Bridgestone...................... 60,000 938,446
Canon............................ 55,000 965,691
Chubu Steel Plate................ 20,000 141,272
Club Mediterranee................ 60,000 5,203,099
Disco............................ 5,000 165,490
Eurafrance....................... 6,015 2,119,398
Hitachi Chemical................. 90,000 1,080,727
Kanamoto......................... 7,000 211,201
Kyocera.......................... 13,000 928,759
Makino Milling................... 114,000 1,046,822
NEC.............................. 75,000 900,605
Ngk Spark Plug................... 79,000 1,060,242
Nichei........................... 2,200 152,735
Nissho-Iwai...................... 15,000 166,498
Nomura Securities................ 70,000 918,264
Pan Holding...................... 20,000 12,125,580
Promise.......................... 3,000 187,689
Rohm............................. 20,000 871,847
Sega Enterprises................. 13,400 831,584
Sharp............................ 50,000 887,992
Sumitomo......................... 100,000 978,809
Takada Kiko...................... 17,000 185,267
Tokki............................ 16,000 201,816
Tostem........................... 46,000 1,401,816
Yurtec........................... 7,350 171,327
-----------
44,356,340
-----------
TOTAL COMMON STOCKS
(cost $279,775,142)....................................... $317,337,940
============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1994
PRINCIPAL
U.S. TREASURY NOTES-27.1% AMOUNT VALUE
----------- -------------
<S> <C> <C>
U.S. Treasury Notes,
5 7/8%, 2/15/2004
(cost $ 165,368,054)........... $175,000,000 $154,820,400
============
PRINCIPAL
AMOUNT
SUBJECT
CALL OPTIONS-.0% TO CALL
-------
Bundesrepublik Deutschland,
6 5/8%, 1/20/1998,
April `95 @ 65.72 (b,c,e)
(cost $89,609) ............. $ 15,000,000 $ 1,937
============
PRINCIPAL
SHORT-TERM INVESTMENTS-17.6% AMOUNT
-------
U.S. Treasury Bills: 3.975%, 10/6/1994................. $ 527,000 $ 526,627
3 1/4%, 10/13/1994............... 11,877,000 (d) 11,859,287
3.20%, 10/20/1994................ 8,066,000 8,046,820
4.27%, 10/27/1994................ 18,295,000 18,236,685
4 1/4%, 11/3/1994................ 46,773,000 46,576,867
4.81%, 11/10/1994................ 1,207,000 1,200,814
3.20%, 11/17/1994................ 14,097,000 14,011,102
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $100,458,202)............ $100,458,202
============
TOTAL INVESTMENTS (cost $545,691,007)....................................... 100.4% $572,618,479
====== ============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (.4%) $(2,258,583)
====== ============
NET ASSETS.................................................................. 100.0% $570,359,896
====== ============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Denominated in German Deutsche Marks.
(c) Strike price subject to prevailing rate of exchange.
(d) Partially held by the custodian in a segregated account as
collateral for open financial futures positions.
(e) Security restricted as to public resale. Investment in restricted
security, with an aggregate value of $1,937 represents approximately .0%
of net assets:
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
___ ----------- -------- ------------ ----------
<S> <C> <C> <C> <C>
Bundesrepublik Deutschland,
6 5/8%, 1/20/1998, April `95 @ 65.72..... 4/27/94 $.60 .0% $0.02
</TABLE>
* The valuation of this security has been determined in good faith under the
direction of the Board of Directors.
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1994
MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/94
--------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Standard & Poor's 500 (Short)................ 100 $23,162,500 Dec `94 $85,750
=======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $545,691,007)-see statement..................................... $572,618,479
Cash.................................................................... 314,730
Dividends and interest receivable....................................... 2,714,853
Receivable for investment securities sold............................... 819,201
Receivable for futures variation margin-Note 4(a)....................... 37,500
Receivable for subscriptions to Common Stock............................ 5,177
Prepaid expenses........................................................ 67,937
------------
576,577,877
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 358,178
Payable for investment securities purchased............................. 5,274,311
Payable for Common Stock redeemed....................................... 253,398
Accrued expenses and other liabilities.................................. 332,094 6,217,981
------------ ----------
NET ASSETS ................................................................ $570,359,896
============
REPRESENTED BY:
Paid-in capital......................................................... $525,029,561
Accumulated undistributed investment income-net-Note 1(c)............... 3,333,561
Accumulated undistributed net realized gain on investments.............. 14,983,552
Accumulated net unrealized appreciation on investments
(including $85,750 net unrealized appreciation on financial futures)-Note 4(b) 27,013,222
------------
NET ASSETS at value applicable to 37,160,617 outstanding shares of Common Stock,
equivalent to $15.35 per share (100 million shares of $1 par value authorized) $570,359,896
============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1994
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Interest.............................................................. $11,032,502
Cash dividends (net of $60,381 foreign taxes withheld at source)...... 8,348,759
------------
TOTAL INCOME...................................................... $19,381,261
EXPENSES:
Management fee-Note 3(a).............................................. 4,509,012
Shareholder servicing costs-Note 3(b)................................. 1,389,131
Interest-Note 2....................................................... 405,773
Loan commitment fees-Note 2........................................... 139,901
Custodian fees........................................................ 131,949
Professional fees..................................................... 52,971
Directors' fees and expenses-Note 3(c)................................ 51,815
Prospectus and shareholders' reports.................................. 40,511
Dividends on securities sold short.................................... 15,600
Miscellaneous......................................................... 5,283
------------
TOTAL EXPENSES.................................................... 6,741,946
-----------
INVESTMENT INCOME-NET............................................. 12,639,315
-----------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments-Note 4(a):
Long transactions (including options transactions).................... $25,410,671
Short sale transactions............................................... 304,375
Net realized (loss) on forward currency exchange contracts-Note 4(a);
Short transactions.................................................... (3,812,001)
Net realized loss on financial futures-Note 4(a):
Long transactions..................................................... (938,614)
Short transactions.................................................... (372,986)
------------
NET REALIZED GAIN..................................................... 20,591,445
Net unrealized (depreciation) on investments and forward currency
exchange contracts (including $159,026 net unrealized appreciation
on financial futures)................................................. (41,885,909)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (21,294,464)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (8,655,149)
==============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
----------------------------
1993 1994
------------ -------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 6,946,39 $ 12,639,315
Net realized gain on investments........................................ 78,971,489 20,591,445
Net unrealized (depreciation) on investments for the year............... (21,913,541) (41,885,909)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 64,004,339 (8,655,149)
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net................................................... (6,706,107) (26,079,930)
Net realized gain on investments........................................ (39,095,109) (72,371,864)
------------- -------------
TOTAL DIVIDENDS....................................................... (45,801,216) (98,451,794)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 660,458,934 250,776,376
Dividends reinvested.................................................... 41,429,266 88,813,669
Cost of shares redeemed................................................. (644,617,878) (258,491,934)
------------- -------------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................ 57,270,322 81,098,111
------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... 75,473,445 (26,008,832)
NET ASSETS:
Beginning of year....................................................... 520,895,283 596,368,728
------------- -------------
End of year [including undistributed investment income-net of $9,701,176
in 1993 and distributions in excess of investment income-net of
($3,739,439) in 1994]................................................. $596,368,728 $570,359,896
============ ============
SHARES SHARES
---------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 37,499,322 14,069,123
Shares issued for dividends reinvested.................................. 2,451,375 5,561,247
Shares redeemed......................................................... (36,543,389) (14,647,204)
---------- -------------
NET INCREASE IN SHARES OUTSTANDING.................................... 3,407,308 4,983,166
============ ============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common 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 SEPTEMBER 30,
----------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $16.07 $14.31 $17.72 $18.11 $18.53
------ ------ ------ ------ -------
INVESTMENT OPERATIONS:
Investment income-net........................ .67 .37 .32 .21 .40
Net realized and unrealized gain (loss) on investments (1.73) 3.80 1.83 1.82 (.56)
------ ------ ------ ------ -------
TOTAL FROM INVESTMENT OPERATIONS........... (1.06) 4.17 2.15 2.03 (.16)
------ ------ ------ ------ -------
DISTRIBUTIONS:
Dividends from investment income-net......... (.70) (.76) (.39) (.24) (.80)
Dividends from net realized gain on investments -- -- (1.37) (1.37) (2.22)
------ ------ ------ ------ -------
TOTAL DISTRIBUTIONS........................ (.70) (.76) (1.76) (1.61) (3.02)
------ ------ ------ ------ -------
Net asset value, end of year................. $14.31 $17.72 $18.11 $18.53 $15.35
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN * (6.90%) 30.27% 13.28% 12.04% (1.50%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets 1.05% .97% .97% 1.02% 1.03%
Ratio of interest expense, loan commitment fees and
dividends on securities sold short to average
net assets................................. .29% .17% .10% .04% .09%
Ratio of net investment income to average net assets 3.97% 2.13% 1.74% 1.24% 2.10%
Portfolio Turnover Rate...................... 89.04% 81.02% 141.67% 102.23% 158.05%
Net Assets, end of year (000's Omitted)...... $400,981 $494,342 $520,895 $596,369 $570,360
* Exclusive of sales charge.
</TABLE>
See notes to financial statements.
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the exclusive distributor of the
Fund's shares. Dreyfus Service Corporation is a wholly-owned subsidiary of
The Dreyfus Corporation ("Manager"). Effective August 24, 1994, the Manager
became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administrative Services, Inc., a provider of
mutual fund administrative services, the parent company of which is Boston
Institutional Group, Inc.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
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, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
Short-term investments are carried at amortized cost, which approximates
value. Investments denominated in foreign currencies are translated to U.S.
dollars at the prevailing rates of exchange. Forward currency exchange
contracts are valued at the offsetting rate.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and 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.
In accordance with a recently adopted Statement of Position (SOP 93-02)
certain differences resulting from the classification of gains/losses
recognized on foreign currency transactions for book and tax purposes and the
recording of related distributions to shareholders have been reclassified. As
of October 1, 1993, the cumulative effect of such differences totalling
$7,073,000 was reclassified to undistributed net investment income from
undistributed net realized gains. In addition, the Fund reclassified
permanent book and tax basis differences relating to utilization of a capital
loss carryforward acquired by the Fund in connection with a merger with
another fund in 1972. As a result, the Fund reclassified $11,092,000 from
undistributed net realized gains to paid-in capital. These reclassifications
had no effect on net investment income, net realized gains and net assets.
(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-BANK LINES OF CREDIT:
In accordance with an agreement with a bank, the Fund may borrow up to
$76 million under a short-term unsecured line of credit. In connection
therewith, the Fund has agreed to pay commitment fees at an annual rate of
.375 of 1% on the unused portion of the first $46 million of the line of
credit.
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
No commitment fee is charged on the additional $30 million. Interest on
borrowings is charged at rates which are related to Federal Funds rates in
effect. There were no outstanding borrowings on September 30, 1994 under the
line of credit.
The average daily amount of short-term debt outstanding during the year
ended September 30, 1994 was approximately $8,531,000, with a related
weighted average annualized interest rate of 4.75% (based upon actual
interest expense, not including commitment fees, for the year). The maximum
amount of such debt outstanding at any time during the year ended September
30, 1994, was $68 million.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of 3/4 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings (which, in the
view of Stroock & Stroock & Lavan, counsel to the Fund, also contemplates
loan commitment fees and dividends on securities sold short), brokerage
commissions and extraordinary expenses, exceed 1 1/2% of the average value of
the Fund's net assets for any full fiscal year. No expense reimbursement was
required for the year ended September 30, 1994.
Dreyfus Service Corporation retained $1,004,878 during the year ended
September 30, 1994 from commissions earned on sales of Fund shares.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of
1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the year ended
September 30, 1994, the Fund was charged an aggregate of $686,581 pursuant to
the Shareholder Services Plan.
(C) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each director who is not an "affiliated person"
receives an annual fee of $4,500 and an attendance fee of $500 per meeting.
NOTE 4-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities
and securities sold short, excluding short-term securities, forward currency
exchange contracts and options transactions, during the year ended September
30, 1994 is summarized as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------------- ----------------
<S> <C> <C>
Long transactions................................................ $869,505,106 $743,179,408
Short sale transactions.......................................... 21,867,500 22,171,875
------------ ------------
TOTAL.......................................................... $891,372,606 $765,351,283
============ ============
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at
current market value. The Fund would incur a loss if the price of the
security increases between the date of the short sale and the date on which
the Fund replaces the borrowed security. The Fund would realize a gain if the
price of the security declines between those dates. Until the Fund replaces
the borrowed security, the Fund will maintain daily, a segregated account
with a broker and custodian, of cash and/or U.S. Government securities
sufficient to cover its short position.
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
When executing forward currency exchange contracts, the Fund is obligated
to buy or sell a foreign currency at a specified rate on a certain date in
the future. With respect to sales of forward currency exchange contracts, the
Fund would incur a loss if the value of the contract increases between the
date the forward contract is opened and the date the forward contract is
closed. The Fund realizes a gain if the value of the contract decreases
between those dates. With respect to purchases of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract decreases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
increases between those dates.
In addition, the following table summarizes the Fund's put options
written transactions for the year ended September 30, 1994:
<TABLE>
<CAPTION>
OPTIONS TERMINATED
------------------
NET
NUMBER OF PREMIUMS REALIZED
CONTRACTS RECEIVED COST GAIN
---------- ---------- -------- -----------
<S> <C> <C> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding September 30, 1993.... 9 $ 243,267
Contracts terminated;
Closed.................................... 9 243,267 $42,894 $ 200,373
----------- ---------- --------- ----------
Contracts outstanding September 30, 1994.... -- --
========== =========
</TABLE>
As a writer of put options, the Fund receives a premium at the outset
and then bears the market risk of unfavorable changes
in the price of the financial instrument underlying the option. Generally,
the Fund would incur a gain, to the extent of the premiums, if the price of
the underlying financial instrument increases between the date the option is
written and the date on which the option is terminated. Generally, the Fund
would realize a loss, if the price of the financial instrument declines
between those dates.
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments (see the Statement of Financial Futures). 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 made or
received 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 September
30, 1994 and their related unrealized market appreciation (depreciation) are
set forth in the Statement of Financial Futures.
(B) At September 30, 1994, accumulated net unrealized appreciation on
investments was $27,013,222, consisting of $48,356,708 gross unrealized
appreciation and $21,343,486 gross unrealized depreciation.
At September 30, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)
We have audited the accompanying statement of assets and liabilities of
Dreyfus Capital Growth Fund (A Premier Fund), including the statements of
investments and financial futures, as of September 30, 1994, 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 September 30, 1994 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 Dreyfus Capital Growth Fund (A Premier Fund) at September 30,
1994, 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.
New York, New York
November 8, 1994
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
IMPORTANT TAX INFORMATION (UNAUDITED)
For federal tax purposes the Fund hereby designates $1.71 per share as a
long-term capital gain distribution of the $3.02 per share paid on December
6, 1993.
DREYFUS
CAPITAL GROWTH FUND
(A Premier Fund)
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
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. 009AR949
Capital Growth Fund
(A Premier Fund)
Annual Report
September 30, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS CAPITAL GROWTH FUND ( A PREMIER FUND)
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX
EXHIBIT A:
_________________________________________________
| | STANDARD | DREYFUS |
| | & POOR'S 500 | CAPITAL |
| PERIOD |COMPOSITE STOCK | GROWTH |
| | PRICE INDEX * | FUND |
|-----------|---------------- | --------------|
| 6/23/69 | 10,000 | 9,697 |
| 9/30/69 | 9,609 | 9,760 |
| 9/30/70 | 9,023 | 9,232 |
| 9/30/71 | 10,882 | 12,070 |
| 9/30/72 | 12,598 | 14,108 |
| 9/30/73 | 12,729 | 12,821 |
| 9/30/74 | 7,772 | 8,154 |
| 9/30/75 | 10,736 | 11,073 |
| 9/30/76 | 14,004 | 13,557 |
| 9/30/77 | 13,436 | 14,800 |
| 9/30/78 | 15,044 | 18,432 |
| 9/30/79 | 16,938 | 22,428 |
| 9/30/80 | 20,527 | 30,493 |
| 9/30/81 | 19,983 | 26,784 |
| 9/30/82 | 21,964 | 31,112 |
| 9/30/83 | 31,703 | 41,049 |
| 9/30/84 | 33,202 | 44,055 |
| 9/30/85 | 38,016 | 53,180 |
| 9/30/86 | 50,083 | 67,685 |
| 9/30/87 | 71,829 | 97,453 |
| 9/30/88 | 62,929 | 80,259 |
| 9/30/89 | 83,664 | 95,631 |
| 9/30/90 | 75,934 | 89,028 |
| 9/30/91 | 99,541 | 115,978 |
| 9/30/92 | 110,531 | 131,384 |
| 9/30/93 | 124,867 | 147,198 |
| 9/30/94 | 129,493 | 144,996 |
|------------------------------------------------|
*Source: Lipper Analytical Services
Dreyfus Capital Growth (A Premier Fund)
Asset Allocation as of September 30, 1994
-------------------------------------------------------------------|
| Common Stocks 55.7 % |
| U.S. Treasury Notes 27.1 % |
| Cash Equivalents 17.2 % |
| -------------------------------------------------------------------|
