PRESIDENT'S LETTER
Dear Shareholder:
The Dreyfus Capital Growth Fund was not immune to the weakness in
worldwide stock and bond markets in recent months.
For the six months ended March 31, 1994, the Fund showed a total
return of .30%, based upon net asset value per share.* This compares with
a negative return of -1.56% for the Standard & Poor's 500 Composite
Stock Price Index and a positive return of 3.67% for the Dow Jones
Industrial Average during the same fiscal half-year period.**
USING CASH RESERVES
Because we were wary of problems in the markets and in the
economy, the Fund entered this 6-month fiscal period with nearly 40% of
assets in cash and short-term securities. These reserves are customarily
invested in U.S. Treasury bills. In recent weeks, however, the major
portion of these reserves were transferred into U.S. Treasury notes with
coupon yields of close to 6%. The balance of the cash, amounting to some
13% of Fund assets, was reinvested mainly in European debt securities.
Most of the decline in total return was caused by weakness in the
European bond market. Both the European bonds that we held and the call
options in the portfolio covering European bonds declined in value when
anticipated reductions in European interest rates did not occur. However,
recent steps by the German Bundesbank to reduce interest rates benefitted
our holdings.
U.S. ECONOMY
While the U.S. economy continues to gain strength, the securities
markets have been adversely affected by higher interest rates in the U.S.
initiated by the Federal Reserve Board to head off inflation.
To deal with this situation, we made moderate shifts in assets from
consumer issues, capital goods, technology and energy into foreign stocks
plus a few very highly selective domestic issues.
The expected passage of a new interstate banking law prompted us
to increase the portfolio allocation to bank stocks, particularly regional
banks that we deem to be strong merger candidates.
INCREASED HEALTH CARE HOLDINGS
Health care stocks have experienced difficult times, due to pending
legislation. We believe many aspects of health care have strong growth
potential and prices for a number of pharmaceutical issues have moved
into an attractive buying range. With these factors in mind, we have
increased the holdings in Merck & Co. and Marion Merrell Dow, held on to
the stock in Lilly (Eli), and acquired new holdings in Columbia/HCA
Healthcare and Medical Care America.
DEFENSIVE POSITIONING
In the current market climate, both here and abroad, we are still
inclined to manage the Fund defensively. I am sure that our shareholders
will appreciate the reasons for this strategy.
As a matter of prudence, it is our intention to adhere to this
cautious approach unless there is a major change in fundamental market
outlook, in the U.S. or abroad. We trust that you will agree.
Sincerely,
(Howard Stein Signature Logo)
Howard Stein
President
April 20, 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. Both the Dow Jones Industrial Average and the Standard &
Poor's 500 Composite Stock Price Index are widely accepted unmanaged
indexes of stock market performance.
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
COMMON STOCK PURCHASES AND SALES SIX MONTHS ENDED MARCH 31, 1994 (UNAUDITED)
PURCHASES*
New Commitments:
Ahold, Amsouth Bancorp, BankAmerica, Bank of Boston, Banque National de
Paris, Barnett Banks, Boeing, Calgon Carbon, Campbell Soup, Chase
Manhattan, Cliffs Drilling, Coastal, Columbia/HCA Healthcare, Comcast Cl.
A, Comerica, DDI, Dean Foods, Dresser Industries, Equitable of Iowa, First
Interstate Bancorp, First Union Bancorp, Fruit of the Loom "A", Grace
(W.R.), Hibernia Cl. A, Hoechst A.G., Lukens, Medical Care America, National
City, OM Group, O'Sullivan Industries Holdings, Overseas Shipholding,
Partner Re Holdings, Paul Revere, Pool Energy Services, Raychem, RJR
Nabisco Holdings Conv. Pfd., Roussel UCLAF, Shawmut National, Telefonos
de Mexico `L' ADS, Tostem, Tyson Foods Cl. A, Wells Fargo, Westwood One,
Whitman, WMX Technologies.
Additions:
American Home Products, Baker Hughes, Intel, Kimberly Clark Cl. A, Marion
Merrill Dow, Merck & Co., Novell, Pennzoil, QVC Network, Sears Cl. B, St.
Paul Bancorp, Texaco.
SALES
Reductions:
CBS, Diamond Shamrock, Excalibur Technologies, General Motors Cl. E,
Genzyme, Grainger (W.W.), Grupo Carso Ord. `A1', Kimberly Clark Cl. A, IBP,
News ADS, ONBANCorp, Reliance, Telefonos de Mexico `L' ADS, Time
Warner.
ELIMINATIONS:
Alleanza Assic, Baroid, Burlington Resources, Charming Shoppes, Cifra `B',
First Colony, International Business Machines, Philips Petroleum, Pogo
Producing, RAS Risp, Sega Enterprises, Sonat Offshore Drilling, STET,
Tele-communications Cl. A, USAir Group, Ser. B Cum. Conv., Pfd.
ELIMINATION OF SECURITIES ACQUIRED DURING THE PERIOD:
Fruit of the Loom "A", Hoechst A.G., Partner Re Holdings, Paul Revere,
Roussel UCLAF, Wells Fargo.
- -----------
*Increases resulting from stock splits and distributions are not shown.
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<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF INVESTMENTS MARCH 31, 1994 (UNAUDITED)
COMMON STOCKS-66.9% SHARES VALUE
------------ ------------
<S> <C> <C>
BANKING-1.8% AmSouth Bancorp........................... 28,500 $ 847,875
Banque National de Paris.................. 70,000 (a) 3,123,750
Barnett Banks............................. 34,000 1,500,250
First Union............................... 37,500 1,560,937
Hibernia, Cl. A........................... 102,500 755,938
National City............................. 57,600 1,533,600
Shawmut National.......................... 75,000 1,518,750
------------
10,841,100
------------
BASIC INDUSTRIES-3.7% Calgon Carbon............................. 100,000 1,287,500
Grace (W.R.).............................. 50,000 2,062,500
LTV....................................... 136,000 (a) 2,040,000
Lukens.................................... 70,000 2,178,750
OM Group.................................. 130,000 2,713,750
Raychem................................... 100,000 3,737,500
Weyerhaeuser.............................. 100,000 4,325,000
Wheeling Pittsburgh....................... 222,000 (a) 3,441,000
------------
21,786,000
------------
CAPITAL GOODS-6.7% CBI Industries............................ 140,000 4,182,500
Coltec Industries......................... 350,000 (a) 7,000,000
Cooper Industries......................... 150,000 5,550,000
Fluor..................................... 55,000 2,750,000
Greif Brothers, Cl. A..................... 90,000 3,555,000
Illinois Tool Works....................... 200,000 8,100,000
O'Sullivan Industries Holdings............ 60,000 (a) 1,170,000
Parker-Hannifin........................... 150,000 5,306,250
WMX Technologies.......................... 50,000 1,187,500
Wheelabrator Technologies................. 50,000 956,250
------------
39,757,500
------------
COMMUNICATIONS-.3% Comcast, Cl. A............................ 112,500 (a) 2,039,063
------------
CONGLOMERATES-.8% Tyco International........................ 70,000 3,491,250
Whitman................................... 100,000 1,512,500
------------
5,003,750
------------
CONSUMER CYCLICAL-1.8% Payless Cashways.......................... 271,400 (a) 4,444,175
Reliance.................................. 200,000 (b) 3,675,000
Waban..................................... 150,000 (a) 2,756,250
------------
10,875,425
------------
CONSUMER GROWTH STAPLES-16.0% A.L. Labs, Cl. A.......................... 50,000 800,000
American Home Products.................... 136,400 7,911,200
Baxter International...................... 75,000 1,696,875
CBS....................................... 14,000 4,284,000
Columbia/HCA Healthcare................... 100,000 4,025,000
Genzyme................................... 45,000 (a) 1,203,750
Health Care & Retirement.................. 100,000 (a) 2,562,500
Johnson & Johnson......................... 150,000 5,662,500
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ ------------
CONSUMER GROWTH Lilly (Eli)............................... 280,000 $ 13,930,000
STAPLES (CONTINUED) Marion Merrell Dow........................ 100,000 1,675,000
Medical Care America...................... 100,000 (a) 2,125,000
Merck & Co................................ 564,481 16,793,310
News, ADS................................. 175,000 (a) 8,815,625
NovaCare.................................. 50,000 812,500
Pfizer.................................... 100,000 5,400,000
QVC Network............................... 310,000 11,276,250
Time Warner............................... 150,000 5,812,500
------------
94,786,010
------------
CONSUMER STAPLES-6.0% Campbell Soup............................. 75,000 2,990,625
Colgate-Palmolive......................... 100,000 5,787,500
Dean Foods................................ 100,000 2,762,500
Gillette.................................. 125,000 7,906,250
IBP....................................... 125,000 2,937,500
Kimberly-Clark, Cl. A..................... 50,000 886,750
Philip Morris Cos......................... 200,000 10,150,000
Tyson Foods, Cl. A........................ 100,000 1,975,000
------------
35,396,125
------------
CREDIT CYCLICAL-.7% Kaufman & Broad Home...................... 225,000 4,443,750
------------
ENERGY-11.1% Arethusa (OFF-Shore)...................... 465,000 4,882,500
Baker Hughes.............................. 300,000 5,325,000
British Petroleum, ADS.................... 100,000 6,137,500
Cliffs Drilling........................... 70,000 (a) 840,000
Coastal................................... 100,000 3,050,000
Diamond Shamrock.......................... 375,000 10,312,500
Dresser Industries........................ 320,000 6,800,000
Norsk Hydro A.S., ADS..................... 100,000 3,112,500
Pennzoil.................................. 250,000 12,500,000
Pool Energy Services...................... 80,000 (a) 550,000
Texaco.................................... 200,000 12,600,000
------------
66,110,000
------------
FINANCIAL-3.7% BankAmerica............................... 70,000 2,756,250
Bank of Boston............................ 205,600 4,883,000
CMAC Investment........................... 45,000 1,305,000
Capital Re................................ 34,400 688,000
Chase Manhattan........................... 90,000 2,913,750
Comerica.................................. 59,500 1,509,812
Equitable of Iowa......................... 89,700 3,027,375
First Interstate Bancorp.................. 20,500 1,501,625
ONBANCorp................................. 50,000 1,525,000
St. Paul Bancorp.......................... 90,000 1,608,750
------------
21,718,562
------------
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
------------ ------------
TECHNOLOGY-8.2% Boeing.................................... 100,000 $ 4,487,500
Excalibur Technologies.................... 140,000 (a) 1,575,000
General Motors, Cl. E..................... 200,000 6,850,000
Grainger (W.W.)........................... 100,000 6,350,000
Intel..................................... 190,000 12,825,000
Novell.................................... 160,000 (a) 2,900,000
Perkin-Elmer.............................. 200,000 6,675,000
Symbol Technologies....................... 150,000 (a) 2,887,500
Tektronix................................. 100,000 3,050,000
Westwood One.............................. 80,000 (a) 730,000
------------
48,330,000
------------
TELECOMMUNICATIONS-.2% Telefonos de Mexico `L', ADS.............. 17,500 1,054,375
------------
TRANSPORTATION-.3% Overseas Shipholding...................... 100,000 2,050,000
------------
FOREIGN-5.6% Ahold..................................... 365,000 9,542,925
DDI....................................... 90 6,516,150
Eurafrance................................ 6,015 2,209,851
Grupo Carso Ord. `A1'..................... 200,000 1,871,800
Pan Holding............................... 20,000 10,072,780
Sears, Cl. B.............................. 108,000 1,577,340
Tostem.................................... 46,000 1,587,736
------------
33,378,582
------------
TOTAL COMMON STOCKS
(cost $353,647,639).................... $397,570,242
============
CONVERTIBLE PREFERRED STOCK-.1%
RJR Nabisco Holdings, $.835
(cost $249,750)........................ 45,000 $ 275,625
============
PRINCIPAL
BONDS AND NOTES-40.1% AMOUNT
------------
FOREIGN-12.1% German Government Securities,
Bundesrepublik Deutschland, Bonds:
6 1/2%, 7/15/2003...................... $ 11,951,000 (c) $ 12,028,683
6%, 9/15/2003.......................... 11,951,000 (c) 11,701,225
Netherlands Government Securities,
Nationale-Nederlanden NV, Bonds,
5 3/4%, 1/15/2004...................... 25,292,865 (d) 24,212,859
French Government Securites,
Obligations Assimilables du Tresor, Bonds:
8 1/2%, 11/25/2002..................... 10,496,851 (e) 11,954,864
8 1/2%, 4/25/2003...................... 10,496,851 (e) 11,950,664
------------
71,848,295
------------
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1994 (UNAUDITED)
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
------------ ------------
U.S GOVERNMENT U.S. Treasury Notes:
AND AGENCIES-28.0% 5 1/2%, 2/28/99....................... $ 25,000,000 $ 24,242,200
5 7/8%, 3/31/99....................... 25,000,000 24,621,100
5 7/8%, 2/15/2004..................... 125,000,000 117,187,500
------------
166,050,800
------------
TOTAL BONDS AND NOTES
(cost $239,947,435)................... $237,899,095
============
PRINCIPAL
AMOUNT
SUBJECT TO
CALL OPTIONS-1.2% CALL
------------
Bundesrepublik Deutschland:
6 5/8%, 1/20/98,
April `94 @ 60.71 (c,f,j)......... $ 8,693,251 $ 96,803
6%, 9/15/2003,
June `94 @ 60.98 (c,f)............ 101,583,508 304,751
Nationale-Nederlanden NV,
7%, 2/15/2003,
August `94 @ 57.83 (d,f).......... 101,171,459 161,874
Obligations Assimilables du Tresor,
6 3/4%, 10/25/2003,
June `94 @ 18.68 (e,f)............ 206,438,069 536,739
CONTRACTS
SUBJECT TO
CALL
------------
CAC 40,
July `94 @ 341.15 (e,f,j)............. 19,650 436,584
Domestic Stocks Bank Basket,
March `95 @100.00 (j)................. 150,000 694,500
French Stocks Bank Basket,
June `94 @ 356.89 (e,f,j)............. 42,000 661,290
French Stocks Industrial Basket,
January `95 @ 6,156.40 (e,f,j)........ 1,700 951,714
German Stocks Bank Basket,
June `94 @ 2,485.81 (c,f,j)........... 6,000 627,426
German Stocks Industrial Basket,
January `95 @ 4,690.77 (c,f,j)........ 2,230 972,753
Swiss Stocks Industrial Basket,
January `95 @ 11,140.23 (f,g,j)....... 950 1,079,852
NOTIONAL
AMOUNT
------------
French Franc Interest Rate Swap,
July `95 (e,h,j)...................... $103,481,456 558,800
------------
TOTAL CALL OPTIONS
(cost $16,077,390).................... $ 7,083,086
============
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1994 (UNAUDITED)
PRINCIPAL
SHORT-TERM INVESTMENTS-.7% AMOUNT VALUE
------------ ------------
U.S. Treasury Bills: 3.24%, 4/7/94............................. $ 2,000,000 (i) $ 1,999,015
3.24%, 4/28/94............................ 248,000 (i) 247,405
3.24%, 5/26/94............................ 2,000,000 (i) 1,989,703
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $4,236,123)..................... $ 4,236,123
============
TOTAL INVESTMENTS (cost $614,158,337).......................................... 109.0% $647,064,171
======= ============
LIABILITIES, LESS CASH AND RECEIVABLES......................................... (9.0%) $(53,372,626)
======= ============
NET ASSETS..................................................................... 100.0% $593,691,545
======= ============
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<TABLE>
<CAPTION>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At March 31, 1994, this
security amounted to $3,675,000 or .6% of net assets.
(c) Denominated in German Deutsche Marks.
(d) Denominated in Dutch Guilders.
(e) Denominated in French Francs.
(f) Strike price subject to prevailing rate of exchange.
(g) Denominated in Swiss Francs.
(h) Based on fixed rate of 5.90% versus PIBOR (Paris Interbank Offering Rate).
(i) Partially held by the custodian in a segregated account as collateral for
open financial futures positions.
(j) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate value of $6,079,722, represent
approximately 1.02% of net assets:
ACQUISTION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
- ------- ---------- -------- ------------- ----------
<S> <C> <C> <C>
CAC 40, July `94 @341.15......................... 7/23/93 $ 38.42 .07% $ 22.22
Bundesrepublik Deutschland,
6 5/8%,1/20/98, April `94 @ 60.71............ 4/27/93 .44 .02 .07
Domestic Stocks Bank Basket, March `95 @100.00... 3/24/94 7.65 .12 4.63
French Stocks Bank Basket, June `94 @356.89...... 6/28/93 41.23 .11 15.75
French Stocks Industrial Basket,
January `95 @6,156.40........................ 1/31/94 705.95 .16 559.83
French Franc Interest Rate Swap, July '95........ 7/30/93 2.18 .09 .53
German Stocks Bank Basket, June `94 @2,485.81.... 8/31/93 211.63 .11 104.57
German Stocks Industrial Basket,
January `95 @4,690.77........................ 1/31/94 484.88 .16 436.21
Swiss Stocks Industrial Basket,
January `95 @11,140.23....................... 1/31/94 1,178.58 .18 1,136.69
* The valuation of these securities has been determined in good faith under the direction of the Board of Directors.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES MARCH 31, 1994 (UNAUDITED)
UNREALIZED
MARKET VALUE APPRECIATION
NUMBER OF COVERED (DEPRECIATION)
LONG CONTRACTS BY CONTRACTS EXPIRATION AT 3/31/94
- ---- --------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Standard & Poor's 500............................ 230 $51,376,250 June `94 $551,724
French Franc CAC 40.............................. 75 5,429,580 June `94 (79,147)
--------
$472,577
========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF SECURITIES SOLD SHORT MARCH 31, 1994 (UNAUDITED)
COMMON STOCKS SHARES VALUE
- ------------- ------ ----------
<S> <C> <C>
Apple Computer
(proceeds $1,843,750).......................................................... 65,000 $2,161,250
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1994 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $614,158,337)-see statement...................................... $647,064,171
Receivable from broker for proceeds on securities sold short............... 1,843,750
Dividends and interest receivable.......................................... 4,632,039
Receivable for investment securities sold.................................. 2,477,982
Receivable for futures variation margin-Note 4(a).......................... 469,886
Receivable for subscriptions to Common Stock............................... 29,810
Prepaid expenses........................................................... 108,194
------------
656,625,832
LIABILITIES:
Due to The Dreyfus Corporation............................................. $ 386,132
Bank loans payable......................................................... 56,000,000
Securities sold short, at value
(proceeds $1,843,750)-see statement.................................... 2,161,250
Payable for Common Stock redeemed.......................................... 926,757
Net unrealized depreciation on forward currency exchange
contracts-Note 4(a).................................................... 830,952
Loan commitment fees and interest payable.................................. 24,028
Accrued expenses and other liabilities..................................... 2,605,168 62,934,287
------------ ------------
NET ASSETS..................................................................... $593,691,545
============
REPRESENTED BY:
Paid-in capital............................................................ $526,414,415
Accumulated distributions in excess of investment income_net-Note 1(c)..... (12,526,407)
Accumulated undistributed net realized gain on investments................. 47,573,578
Accumulated net unrealized appreciation on investments
(including $472,577 net unrealized appreciation on financial
futures)-Note 4(b)..................................................... 32,229,959
------------
NET ASSETS at value applicable to 37,983,221 outstanding shares of
Common Stock, equivalent to $15.63 per share
(100 million shares of $1 par value authorized)............................ $593,691,545
============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF OPERATIONS SIX MONTHS ENDED MARCH 31, 1994 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $42,116 foreign taxes withheld at source)....... $ 3,811,482
Interest............................................................... 3,343,829
------------
TOTAL INCOME................................................... $ 7,155,311
EXPENSES:
Management fee-Note 3(a)............................................... 2,329,064
Shareholder servicing costs-Note 3(b).................................. 733,418
Loan commitment fees-Note 2............................................ 77,880
Custodian fees......................................................... 65,320
Prospectus and shareholders' reports................................... 28,621
Directors' fees and expenses-Note 3(c)................................. 26,851
Professional fees...................................................... 21,483
Interest-Note 2........................................................ 9,873
Dividends on securities sold short..................................... 7,800
Miscellaneous.......................................................... 2,654
------------
TOTAL EXPENSES................................................. 3,302,964
------------
INVESTMENT INCOME-NET.......................................... 3,852,347
------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments-Note 4(a):
Long transactions (including options transactions)..................... $34,319,014
Short sale transactions................................................ 375,638
Net realized gain (loss) on financial futures-Note 4(a):
Long transactions...................................................... 338,823
Short transactions..................................................... (17,005)
------------
NET REALIZED GAIN...................................................... 35,016,470
Net unrealized (depreciation) on investments and forward currency
exchange contracts (including $545,853 net unrealized appreciation
on financial futures).................................................. (36,669,172)
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS.............. (1,652,702)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 2,199,645
============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31, 1994
1993 (UNAUDITED)
------------ ----------------
<S> <C> <C>
OPERATIONS:
Investment income-net...................................................... $ 6,946,391 $ 3,852,347
Net realized gain on investments........................................... 78,971,489 35,016,470
Net unrealized (depreciation) on investments for the period................ (21,913,541) (36,669,172)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... 64,004,339 2,199,645
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net...................................................... (6,706,107) (13,553,523)
Excess investment income-net............................................... -- (12,526,407)
Net realized gain on investments........................................... (39,095,109) (72,371,863)
------------ ------------
TOTAL DIVIDENDS........................................................ (45,801,216) (98,451,793)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.............................................. 660,458,934 217,813,085
Dividends reinvested....................................................... 41,429,266 88,814,716
Cost of shares redeemed.................................................... (644,617,878) (213,052,836)
------------ ------------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................. 57,270,322 93,574,965
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................ 75,473,445 (2,677,183)
NET ASSETS:
Beginning of period........................................................ 520,895,283 596,368,728
------------ ------------
End of period [including undistributed investment income-net
of $9,701,176 in 1993 and distributions in excess of investment
income-net of $(12,526,407) in 1994]................................... $596,368,728 $593,691,545
============ ============
SHARES SHARES
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................ 37,499,322 11,937,552
Shares issued for dividends reinvested..................................... 2,451,375 5,561,312
Shares redeemed............................................................ (36,543,389) (11,693,094)
------------ ------------
NET INCREASE IN SHARES OUTSTANDING..................................... 3,407,308 5,805,770
============ ============
See independent accountants' review report and notes to financial statements.
</TABLE>
<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
period indicated. This information has been derived from
information provided in the Fund's financial statements.
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED
------------------------------------------------------ MARCH 31, 1994
PER SHARE DATA: 1989 1990 1991 1992 1993 (UNAUDITED)
------ ------ ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $14.13 $16.07 $14.31 $17.72 $18.11 $18.53
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net......................... .84 .67 .37 .32 .21 .17
Net realized and unrealized gain (loss)
on investments............................ 1.74 (1.73) 3.80 1.83 1.82 (.05)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS.......... 2.58 (1.06) 4.17 2.15 2.03 .12
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net.......... (.64) (.70) (.76) (.39) (.24) (.42)
Excess dividends from investment
income-net................................ -- -- -- -- -- (.38)
Dividends from net realized gain
on investments............................ -- -- -- (1.37) (1.37) (2.22)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS....................... (.64) (.70) (.76) (1.76) (1.61) (3.02)
------ ------ ------ ------ ------ ------
Net asset value, end of period................ $16.07 $14.31 $17.72 $18.11 $18.53 $15.63
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN (1) 19.15% (6.90%) 30.27% 13.28% 12.04% .30%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to
average net assets........................ 1.04% 1.05% .97% .97% 1.02% .51%(2)
Ratio of interest expense, loan commitment
fees and dividends on securities sold
short to average net assets............... .54% .29% .17% .10% .04% .02%(2)
Ratio of net investment income to
average net assets........................ 5.32% 3.97% 2.13% 1.74% 1.24% .62%(2)
Portfolio Turnover Rate....................... 124.30% 89.04% 81.02% 141.67% 102.23% 51.24%(2)
Net Assets, end of period (000's Omitted)..... $484,105 $400,981 $494,342 $520,895 $596,369 $593,692
- -----------------
(1) Exclusive of sales charge.
(2) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified open-end management investment company.
Dreyfus Service Corporation ("Distributor") acts as the exclusive
distributor of the Fund's shares. The Distributor is a wholly-owned
subsidiary of The Dreyfus Corporation ("Manager").
(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.
Dividends in excess of investment income-net result primarily from
foreign currency exchange contract transactions which are treated as
ordinary income for tax purposes and as capital gains for financial
statement purposes.
(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 provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income 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. 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.
Outstanding borrowings on March 31, 1994 under the line of credit,
amounted to $56 million, at an annualized interest rate of 4.40%.
The average daily amount of short-term debt outstanding during the six
months ended March 31, 1994 was approximately $441,000, with a related
weighted average annualized interest rate of 4.30% (based upon actual
interest expense, not including commitment fees, for the six months). The
maximum amount of such debt outstanding at any time during the six
months ended March 31, 1994, was $56 million.
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 six months
ended March 31, 1994.
The Distributor retained $1,127,272 during the six months ended March
31, 1994 from commissions earned on sales of Fund shares.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund
reimburses the Distributor 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
six months ended March 31, 1994, the Fund was charged an aggregate of
$348,256 pursuant to the Shareholder Services Plan.
(C) Certain officers and directors of the Fund are "affiliated
persons," as defined in the Act, of the Manager and/or the Distributor.
Each director who is not an "affiliated person" receives an annual fee of
$4,500 and an attendance fee of $500 per meeting.
(D) On December 5, 1993, the Manager entered into an Agreement and
Plan of Merger (the "Merger Agreement") providing for the merger of the
Manager with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including receipt of certain regulatory approvals
and approvals of the stockholders of the Manager and of Mellon. The merger
is expected to occur in mid-1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's board
and shareholders before completion of the merger. Shareholder approval
will be solicited by a proxy statement.
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
six months ended March 31, 1994 is summarized as follows:
PURCHASES SALES
------------ ------------
Long transactions................ $515,119,217 $223,191,799
Short sale transactions.......... 20,132,813 22,171,875
------------ ------------
TOTAL........................ $535,252,030 $245,363,674
============ ============
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. Securities sold short at March 31,
1994 and their related market values and proceeds are set forth in the
Statement of Securities Sold Short.
<TABLE>
<CAPTION>
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
In addition, the following summarizes open forward currency exchange contracts at March 31, 1994:
U.S. DOLLAR
VALUE AT UNREALIZED
FORWARD CURRENCY SALE CONTRACTS: PROCEEDS 3/31/94 (DEPRECIATION)
----------- ----------- ------------
<S> <C> <C> <C>
Deutsche Marks, expiring 4/7/94............ $ 4,193,604 $ 4,301,075 $ (107,471)
Deutsche Marks, expiring 4/22/94........... 24,522,039 24,817,856 (295,817)
French Francs, expiring 4/22/94............ 25,092,424 25,251,489 (159,065)
Dutch Guilders, expiring 4/22/94........... 24,538,955 24,807,554 (268,599)
-----------
$ (830,952)
===========
</TABLE>
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 six months ended March 31, 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 March 31, 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
realize a gain, to the extent of the premiums received 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 March 31, 1994 and their related unrealized
market appreciation (depreciation) are set forth in the Statement of
Financial Futures.
(B) At March 31, 1994, accumulated net unrealized appreciation on
investments was $32,229,959, consisting of $65,585,897 gross
unrealized appreciation and $33,355,938 gross unrealized depreciation.
At March 31 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)
REVIEW REPORT OF ERNST & YOUNG, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CAPITAL GROWTH FUND (A Premier Fund)
We have reviewed the accompanying statement of assets and liabilities
of Dreyfus Capital Growth Fund (A Premier Fund), including the statements
of investments, financial futures and securities sold short, as of March
31, 1994, and the related statements of operations and changes in net
assets and financial highlights for the six month period ended March 31,
1994. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying analytical
procedures to financial data, and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope than
an audit conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the objective of
expressing an opinion regarding the financial statements and financial
highlights taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications
that should be made to the interim financial statements and financial
highlights referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year
ended September 30, 1993 and financial highlights for each of the five
years in the period ended September 30, 1993 and in our report dated
November 8, 1993, we expressed an unqualified opinion on such statement
of changes in net assets and financial highlights.
(Ernst & Young Signature Logo)
New York, New York
May 10, 1994
(Dreyfus `D' Logo)
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
DISTRIBUTOR
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 009SA943
(Dreyfus Logo)
Capital Growth Fund
(A Premier Fund)
Semi-Annual
Report
March 31, 1994
(Dreyfus Lion Logo)
