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PREMIER AGGRESSIVE GROWTH FUND
PROSPECTUS JANUARY 8, 1996
AS REVISED DECEMBER 1, 1996
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PREMIER AGGRESSIVE GROWTH FUND (THE "FUND") IS A SEPARATE
DIVERSIFIED PORTFOLIO OF PREMIER EQUITY FUNDS, INC., AN
OPEN-END, MANAGEMENT INVESTMENT COMPANY (THE "COMPANY"), KNOWN AS A
MUTUAL FUND. THE FUND'S INVESTMENT OBJECTIVE IS CAPITAL GROWTH. IT SEEKS
TO ACHIEVE THIS INVESTMENT OBJECTIVE BY USING SPECULATIVE INVESTMENT
TECHNIQUES SUCH AS LEVERAGING, SHORT-SELLING AND OPTIONS TRANSACTIONS, IN
ADDITION TO USUAL INVESTMENT PRACTICES. THE FUND INVESTS PRINCIPALLY IN
COMMON STOCKS AND CONVERTIBLE SECURITIES OF DOMESTIC AND FOREIGN ISSUERS.
INVESTMENTS ALSO MAY BE MADE IN WARRANTS, PREFERRED STOCKS AND DEBT
SECURITIES UNDER CERTAIN MARKET CONDITIONS.
BY THIS PROSPECTUS, THE FUND IS OFFERING FOUR CLASSES OF
SHARES--CLASS A, CLASS B, CLASS C AND CLASS R--WHICH ARE DESCRIBED
HEREIN. SEE "ALTERNATIVE PURCHASE METHODS."
YOU CAN PURCHASE OR REDEEM ALL CLASSES OF SHARES BY TELEPHONE
USING THE TELETRANSFER PRIVILEGE.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE
FUND THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED JULY 1, 1996,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF
INTEREST TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. THE
SECURITIES AND EXCHANGE COMMISSION MAINTAINS A WEB SITE
(HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF ADDITIONAL
INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION
REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF ADDITIONAL
INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE,
NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR
OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE NET ASSET VALUE OF FUNDS OF
THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
Fee Table........................................... 3
Condensed Financial Information..................... 3
Alternative Purchase Methods........................ 5
Description of the Fund............................. 6
Management of the Fund.............................. 8
How to Buy Shares................................... 9
Shareholder Services................................ 14
How to Redeem Shares................................ 18
Distribution Plan and Shareholder Services Plan..... 22
Dividends, Distributions and Taxes.................. 23
Performance Information............................. 25
General Information................................. 25
Appendix............................................ 27
Page 2
<TABLE>
<CAPTION>
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C CLASS R
<S> <C> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 5.75% None None None
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge) None* 4.00% 1.00% None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees.............. .75% .75% .75% .75%
12b-1 Fees................... None .75% .75% None
Other Expenses............... .36% .36% .36% .11%
Total Fund Operating Expenses 1.11% 1.86% 1.86% .86%
EXAMPLE
You would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) except where noted, redemption at
the end of each time period:
CLASS A CLASS B CLASS C CLASS R
1 Year $ 68 $59/$19 $29/$19 $ 9
3 Years $ 91 $88/$58 $ 58 $ 27
5 Years $115 $121/$101 $101 $ 48
10 Years $185 $180 $218 $106
* A contingent deferred sales charge of 1.00% may be assessed on
certain redemptions of Class A shares purchased without
an initial sales charge as part of an investment of $1 million
or more.
+ Assuming no redemption of shares.
++ Ten-year figures assume conversion of Class B shares to Class A
shares at end of sixth year following the date of purchase.
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES
A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY
RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. Other Expenses
for Class B, Class C and Class R are based on amounts for Class A for the
Fund's last fiscal year. Long-term investors in Class B or Class C
shares could pay more in 12b-1 fees than the economic equivalent of
paying a front-end sales charge. The information in the foregoing table
does not reflect any fee waivers or expense reimbursement arrangements
that may be in effect. Certain Service Agents (as defined below) may
charge their clients direct fees for effecting transactions in Fund
shares; such fees are not reflected in the foregoing table. See
"Management of the Fund," "How to Buy Shares" and "Distribution Plan and
Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by
Ernst & Young LLP, the Fund's independent auditors, whose report thereon
appears in the Statement of Additional Information. Further financial
data and related notes for Class A are included in the Statement of
Additional Information, available upon request. No financial information
is available for Class B, Class C and Class R shares, which had not been
offered as of the date of the financial statements.
Page 3
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a
Class 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.
<TABLE>
<CAPTION>
Year Ended September 30,
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PER SHARE DATA: 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------- ------ ----- ------ ----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $18.66 $20.50 $22.21 $14.13 $16.07 $14.31 $17.72 $18.11 $18.53 $15.35
------- ------ ----- ------ ----- ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net.... .51 .35 .57 .84 .67 .37 .32 .21 .40 .40
Net realized and unrealized gain
(loss) on investments.. 4.05 6.61 (4.58) 1.74 (1.73) 3.80 1.83 1.82 (.56) 1.23
------- ------ ----- ------ ----- ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 4.56 6.96 (4.01) 2.58 (1.06) 4.17 2.15 2.03 (.16) 1.63
------- ------ ----- ------ ----- ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income--net (.78) (.52) (.41) (.64) (.70) (.76) (.39) (.24) (.69) (.44)
Excess dividends from investment income-net -- -- -- -- -- -- -- -- (.11) --
Dividends from net realized gain on investments (1.94) (4.73) (3.66) -- -- -- (1.37) (1.37) (2.22) (.23)
------- ------ ----- ------ ----- ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS.... (2.72) (5.25) (4.07) (.64) (.70) (.76) (1.76) (1.61) (3.02) (.67)
------- ------ ----- ------ ----- ------ ------ ------ ------ ------
Net asset value, end of year $20.50 $22.21 $14.13 $16.07 $14.31 $17.72 $18.11 $18.53 $15.35 $16.31
======= ====== ===== ====== ===== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN*..... 27.28% 43.98% (17.64%) 19.15% (6.90%)30.27% 13.28% 12.04% (1.50%)11.21%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses
to average net assets.. .91% .89% .96% 1.04% 1.05% .97% .97% 1.02% 1.03% 1.03%
Ratio of interest expense, loan commitment
fees and dividends on securities
sold short to average net assets .10% .34% .35% .54% .29% .17% .10% .04% .09% .08%
Ratio of net investment income to
average net assets..... 2.69% 1.98% 3.91% 5.32% 3.97% 2.13% 1.74% 1.24% 2.10% 2.55%
Portfolio Turnover Rate.. 141.21% 123.61% 111.51% 124.30% 89.04% 81.02% 141.67% 102.23% 158.05%298.60%
Net Assets, end of year (000's Omitted)$486,244 $631,581 $471,927 $484,105 $400,981 $494,342 $520,895 $596,369 $570,360 $572,077
* Exclusive of sales charge.
Further information about the Fund's performance is contained
in the Fund's annual report, which may be obtained without charge by
writing to the address or calling the number set forth on the cover page
of this Prospectus.
Page 4
DEBT OUTSTANDING
YEAR ENDED SEPTEMBER 30,
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1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------ ------ ------ ------- ------ ------ ------ ----- ----- -----
Amount of debt outstanding
at end of year
(in thousands) __ $72,500 __ $79,800 __ __ __ __ __ __
Average amount of
debt outstanding
throughout each year
(in thousands)(1) $3,099 $19,210 $3,865 $17,817 $10,333 $6,913 $6,897 __ $8,531 $4,274
Average number of
shares outstanding
throughout each period
(in thousands)(2) 25,290 29,861 33,406 31,923 29,379 28,190 28,860 __ 36,537 36,648
Average amount of
debt per share
throughout each year $ .12 $ .64 $ .12 $ .56 $ .35 $ .25 $ .24 __ $ .23 $ .12
(1) Based upon daily outstanding borrowings.
(2) Based upon month-end balances.
</TABLE>
ALTERNATIVE PURCHASE METHODS
The Fund offers you four methods of purchasing shares. Orders
for purchases of Class R shares, however, may be placed only for certain
eligible investors as described below. If you are not eligible to
purchase Class R shares, you may choose from Class A, Class B and Class C
the Class of shares that best suits your needs, given the amount of your
purchase, the length of time you expect to hold your shares and any other
relevant circumstances. Each Fund share represents an identical pro rata
interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 5.75% of the public offering price
imposed at the time of purchase. For shareholders beneficially owning
Fund shares on November 30, 1996, Class A shares are sold at net asset
value plus a maximum initial sales charge of 4.50%. For shareholders
beneficially owning Fund shares on December 31, 1995, Class A shares are
sold at net asset value plus a maximum initial sales charge of 3.00% of
the public offering price imposed at the time of purchase. The initial
sales charge may be reduced or waived for certain purchases. See "How to
Buy Shares_Class A Shares." These shares are subject to an annual
service fee at the rate of .25 of 1% of the value of the average daily
net assets of Class A. See "Distribution Plan and Shareholder Services
Plan_Shareholder Services Plan."
Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 4% contingent deferred sales charge ("CDSC"), which
is assessed only if you redeem Class B shares within six years of
purchase. See "How to Buy Shares_Class B Shares" and "How to Redeem
Shares_Contingent Deferred Sales Charge_Class B Shares." These shares
also are subject to an annual service fee at the rate of .25 of 1% of the
value of the average daily net assets of Class B. In addition, Class B
shares are subject to an annual distribution fee at the rate of .75 of 1%
of the value of the average daily net assets of Class B. See
"Distribution Plan and Shareholder Services Plan." The distribution fee
paid by Class B will cause such Class to have a higher expense ratio and
to pay lower dividends than Class A. Approximately six years after the
date of purchase, Class B shares automatically will convert to Class A
shares, based on the relative net asset values for shares of each such
Class, and will no longer be subject to the distribution fee. Class B
shares that have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together with other
Class B shares, in the proportion that a shareholder's
Page 5
Class B shares converting to Class A shares bears to the total Class B
shares not acquired through the reinvestment of dividends and
distributions.
Class C shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class C shares are
subject to a 1% CDSC, which is assessed only if you redeem Class C shares
within one year of purchase. See "How to Redeem Shares_Class C Shares."
These shares also are subject to an annual service fee at the rate of .25
of 1%, and an annual distribution fee at the rate of .75 of 1%, of the
value of the average daily net assets of Class C. See "Distribution Plan
and Shareholder Services Plan." The distribution fee paid by Class C
will cause such Class to have a higher expense ratio and to pay lower
dividends than Class A.
Class R shares may not be purchased directly by individuals,
although eligible institutions may purchase Class R shares for certain
accounts maintained by individuals. Class R shares are sold at net asset
value per share only to institutional investors acting for themselves or
in a fiduciary, advisory, agency, custodial or similar capacity for
qualified or non-qualified employee benefit plans, including pension,
profit-sharing, SEP-IRAs and other deferred compensation plans, whether
established by corporations, partnerships, non-profit entities or state
and local governments, but not including IRAs or IRA "Rollover Accounts."
Class R shares are not subject to an annual service fee or distribution
fee.
The decision as to which Class of shares is more beneficial to
you depends on the amount and the intended length of your investment. If
you are not eligible to purchase Class R shares, you should consider
whether, during the anticipated life of your investment in the Fund, the
accumulated distribution fee and CDSC, if any, on Class B or Class C
shares would be less than the initial sales charge on Class A shares
purchased at the same time, and to what extent, if any, such differential
would be offset by the return of Class A. Additionally, investors
qualifying for reduced initial sales charges who expect to maintain their
investment for an extended period of time might consider purchasing Class
A shares because the accumulated continuing distribution fees on Class B
or Class C shares may exceed the initial sales charge on Class A shares
during the life of the investment. Finally, you should consider the
effect of the CDSC period and any conversion rights of the Classes in the
context of your own investment time frame. For example, while Class C
shares have a shorter CDSC period than Class B shares, Class C shares do
not have a conversion feature and, therefore, are subject to an ongoing
distribution fee. Thus, Class A and Class B shares may be more
attractive than Class C shares to investors with longer term investment
outlooks. Generally, Class A shares may be more appropriate for
investors who invest $100,000 or more in Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is capital growth. The Fund
seeks to achieve this investment objective by using speculative
investment techniques such as leveraging, short-selling and options
transactions, in addition to usual investment practices. High yield or
income is not a principal objective of the Fund. The Fund's investment
objective cannot be changed without approval by the holders of a majority
(as defined in the Investment Company Act of 1940, as amended (the "1940
Act")) of the Fund's outstanding voting shares. There can be no
assurance that the Fund's investment objective will be achieved.
INVESTMENT APPROACH
The Fund ordinarily will invest in the equity securities of a
limited number of companies that, in the opinion of The Dreyfus
Corporation, are judged likely to achieve superior revenue and/or
earnings growth over the coming twelve to twenty-four months. Under
normal market conditions, the Fund will hold the securities of between
forty and seventy companies in its portfolio, with the twenty-five most
highly regarded of these companies usually constituting approximately
seventy percent or more of the Fund's net assets. The Fund may invest in
compa-
Page 6
nies of all sizes, including smaller capitalization companies. In
selecting investments for the Fund, The Dreyfus Corporation emphasizes
stock selection, relying heavily on research and fundamental analysis. The
Fund will seek to include in its portfolio companies that generally have
strong management, superior industry positions and excellent earnings
growth prospects. Because of its focus on a relatively small number of
companies, the Fund is designed for those investors who, in seeking
capital growth, can accept the higher levels of risk and volatility that
may be associated with investing in a more highly concentrated portfolio
of growth companies.
MANAGEMENT POLICIES
Under normal circumstances, the Fund will invest at least 65%
of the value of its total assets in equity securities, principally
publicly-traded common stocks and securities convertible into common
stocks. The Fund may invest up to 30% of the value of its net assets in
the securities of foreign companies which are not publicly-traded in the
United States and the debt securities of foreign governments. Investments
may be made in warrants, preferred stocks and debt securities when
management believes that such securities offer opportunities for capital
growth or are desirable in light of the prevailing market or economic
conditions.
While seeking desirable investments, the Fund may invest in
money market instruments consisting of U.S. Government securities,
certificates of deposit, time deposits, bankers' acceptances, short-term
investment grade corporate bonds and other short-term debt instruments,
and repurchase agreements, as set forth under "Appendix_Certain Portfolio
Securities_Money Market Instruments." Under normal market conditions, the
Fund does not expect to have a substantial portion of its assets invested
in money market instruments. However, when The Dreyfus Corporation
determines that adverse market conditions exist, the Fund may adopt a
temporary defensive posture and invest all of its assets in money market
instruments. The Fund also may invest in money market instruments in
anticipation of investing cash positions.
The Fund's annual portfolio turnover rate is not expected to
exceed 150%. Higher portfolio turnover rates usually generate additional
brokerage commissions and expenses and the short-term gains realized from
these transactions are taxable to shareholders as ordinary income. In
addition, the Fund engages in various investment techniques, such as
leveraging, short-selling, options and futures transactions, foreign
currency transactions and lending portfolio securities. See also
"Investment Considerations and Risks" and "Appendix_Investment
Techniques" below and "Investment Objective and Management
Policies_Management Policies" in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAl -- The Fund's net asset value per share should be expected to
fluctuate. Investors should consider the Fund as a supplement to an
overall investment program and should invest only if they are willing to
undertake the risks involved. See "Investment Objective and Management
Policies_Management Policies" in the Statement of Additional Information
for a further discussion of certain risks.
EQUITY SECURITIES -- Equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the securities,
and such fluctuations can be pronounced. Changes in the value of the
Fund's investments will result in changes in the value of its shares and
thus the Fund's total return to investors.
The securities of the smaller companies in which the Fund may
invest may be subject to more abrupt or erratic market movements than
larger, more-established companies, because these securities typically
are traded in lower volume and the issuers typically are subject to a
greater degree to changes in earnings and prospects.
FOREIGN SECURITIES -- Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
Page 7
Because evidences of ownership of such securities usually are
held outside the United States, the Fund will be subject to additional
risks which include possible adverse political and economic developments,
possible seizure or nationalization of foreign deposits and possible
adoption of governmental restrictions which might adversely affect the
payment of principal and interest on the foreign securities or might
restrict the payment of principal and interest to investors located
outside the country of the issuer, whether from currency blockage or
otherwise.
Since foreign securities often are purchased with and payable
in currencies of foreign countries, the value of these assets as measured
in U.S. dollars may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations.
FOREIGN CURRENCY TRANSACTIONS -- Currency exchange rates may
fluctuate significantly over short periods of time. They generally are
determined by the forces of supply and demand in the foreign exchange
markets and the relative merits of investments in different countries,
actual or perceived changes in interest rates and other complex factors,
as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by currency
controls or political developments in the United States or abroad. See
"Appendix_Investment Techniques_Foreign Currency Transactions."
USE OF DERIVATIVES -- The Fund may invest in derivatives
("Derivatives"). These are financial instruments which derive their
performance, at least in part, from the performance of an underlying
asset, index or interest rate. The Derivatives the Fund may use include
options and futures. While Derivatives can be used effectively in
furtherance of the Fund's investment objective, under certain market
conditions, they can increase the volatility of the Fund's net asset
value, can decrease the liquidity of the Fund's investments and make more
difficult the accurate pricing of the Fund's portfolio. See
"Appendix_Investment Techniques_Use of Derivatives" below, and
"Investment Objective and Management Policies_Management
Policies_Derivatives" in the Statement of Additional Information.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are
made independently from those of the other investment companies advised
by The Dreyfus Corporation. If, however, such other investment companies
desire to invest in, or dispose of, the same securities as the Fund,
available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by
the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park
Avenue, New York, New York 10166, was formed in 1947 and serves as the
Fund's investment adviser. The Dreyfus Corporation is a wholly-owned
subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of
Mellon Bank Corporation ("Mellon"). As of November 30, 1995, The Dreyfus
Corporation managed or administered approximately $83 billion in assets
for more than 1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Company, subject to the authority of the Company's Board in accordance
with Maryland law. The Fund's primary portfolio manager is Michael L.
Schonberg. He has held that position since August 1995, and has been
employed by The Dreyfus Corporation since July 1995. From March 1994 to
July 1995, Mr. Schonberg was a General Partner of Omega Advisors, L.P.
Prior thereto, he served as Managing Director and Chief Investment
Officer for UBS Asset Management (NY), Inc. The Fund's other portfolio
managers are identified in the Statement of Additional Information. The
Dreyfus Corporation also provides research services for the Fund and for
other funds advised by The Dreyfus Corporation through a professional
staff of portfolio managers and securities analysts.
Page 8
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the
Federal Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest
bank holding companies in the United States based on total assets.
Mellon's principal wholly-owned subsidiaries are Mellon Bank, N.A.,
Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
Company, Inc., AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $209 billion
in assets as of September 30, 1995, including approximately $80 billion
in proprietary mutual fund assets. As of September 30, 1995, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $717 billion in
assets, including approximately $55 billion in mutual fund assets.
For the fiscal year ended September 30, 1995, the Fund paid
The Dreyfus Corporation a monthly management fee at the annual rate of
.75 of 1% of the value of the Fund's average daily net assets. The
management fee is higher than that paid by most other investment
companies. From time to time, The Dreyfus Corporation may waive receipt
of its fees and/or voluntarily assume certain expenses of the Fund, which
would have the effect of lowering the expense ratio of the Fund and
increasing yield to investors. The Fund will not pay The Dreyfus
Corporation at a later time for any amounts it may waive, nor will the
Fund reimburse The Dreyfus Corporation for any amounts it may assume.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay Service
Agents in respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at 60 State Street, Boston,
Massachusetts 02109. The Distributor's ultimate parent is Boston
Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus Corporation,
P.O. Box 9671, Providence, Rhode Island 02940-9671, serves as the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer Agent"). Mellon
Bank, N.A., located at One Mellon Bank Center, Pittsburgh, Pennsylvania
15258, is the Fund's Custodian.
HOW TO BUY SHARES
GENERAL -- Class A shares, Class B shares and Class C shares may be
purchased only by clients of certain financial institutions (which may
include banks), securities dealers ("Selected Dealers") and other
industry professionals (collectively, "Service Agents"), except that
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members
of the Company's Board, or the spouse or minor child of any of the
foregoing may purchase Class A shares directly through the Distributor.
Subsequent purchases may be sent directly to the Transfer Agent or your
Service Agent.
Class R shares are offered only to institutional investors
acting for themselves or in a fiduciary, advisory, agency, custodial or
similar capacity for qualified or non-qualified employee benefit plans,
including pension, profit-sharing, SEP-IRAs and other deferred
compensation plans, whether established by corporations, partnerships,
non-profit entities or state and local governments ("Retirement Plans").
The term "Retirement Plans" does not include IRAs or IRA "Rollover
Accounts." Class R shares may be purchased for a Retirement Plan only by
a custodian, trustee, investment manager or other entity authorized to
act on behalf of such Plan. Institutions effecting transactions in Class
R shares for the accounts of their clients may charge their clients
direct fees in connection with such transactions.
Page 9
When purchasing Fund shares, you must specify which Class is
being purchased. Stock certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
Service Agents may receive different levels of compensation
for selling different Classes of shares. Management understands that
some Service Agents may impose certain conditions on their clients which
are different from those described in this Prospectus, and, to the extent
permitted by applicable regulatory authority, may charge their clients
direct fees which would be in addition to any amounts which might be
received under the Distribution Plan or Shareholder Services Plan. You
should consult your Service Agent in this regard.
The minimum initial investment is $1,000. Subsequent
investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and
403(b)(7) Plans with only one participant is $750, with no minimum for
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum initial investment of $250.
Subsequent investments in a spousal IRA must be at least $250. The
initial investment must be accompanied by the Account Application. The
Fund reserves the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified or
non-qualified employee benefit plans or other programs where
contributions or account information can be transmitted in a manner and
form acceptable to the Fund. The Fund reserves the right to vary further
the initial and subsequent investment minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code"),
imposes various limitations on the amount that may be contributed to
certain Retirement Plans. These limitations apply with respect to
participants at the plan level and, therefore, do not directly affect the
amount that may be invested in the Fund by a Retirement Plan.
Participants and plan sponsors should consult their tax advisers for
details.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"Dreyfus Family of Funds," or, if for Dreyfus retirement plan accounts,
to "The Dreyfus Trust Company, Custodian." Payments which are mailed
should be sent to Premier Aggressive Growth Fund, P.O. Box 6587,
Providence, Rhode Island 02940-6587. If you are opening a new account,
please enclose your Account Application indicating which Class of shares
is being purchased. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be enclosed. For
Dreyfus retirement plan accounts, payments which are mailed should be
sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Neither initial nor subsequent investments
should be made by third party check.
Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or any
other bank having a correspondent bank in New York City. Immediately
available funds may be transmitted by wire to The Bank of New York,
together with the Fund's DDA # 8900119276/Premier Aggressive Growth Fund.
The wire must indicate the class of shares being purchased and must
include your Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase
of Fund shares is by wire, you should call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. You
should include your Fund account number on the Account Application and
promptly mail the Account Application to the Fund, as no redemptions will
be permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if
any check used for investment in your account does not clear. The Fund
makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Page 10
Fund shares also may be purchased through Dreyfus-AUTOMATIC
Asset BuilderRegistration Mark and the Government Direct Deposit
Privilege described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit
and will not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer
of funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and Fund account number PRECEDED BY THE DIGITS "1111."
Fund shares are sold on a continuous basis. Net asset value
per share is determined as of the close of trading on the floor of the
New York Stock Exchange (currently 4:00 p.m., New York time), on each day
the New York Stock Exchange is open for business. For purposes of
determining net asset value, options and futures contracts will be valued
15 minutes after the close of trading on the floor of the New York Stock
Exchange. Net asset value per share of each Class is computed by
dividing the value of the Fund's net assets represented by such Class
(i.e., the value of its assets less liabilities) by the total number of
shares of such Class outstanding. The Fund's investments are valued
based on market value or, where market quotations are not readily
available, based on fair value as determined in good faith by the
Company's Board. For further information regarding the methods employed
in valuing the Fund's investments, see "Determination of Net Asset Value"
in the Statement of Additional Information.
If an order is received in proper form by the Transfer Agent
or other agent by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time) on a business day, Fund
shares will be purchased at the public offering price determined as of
the close of trading on the floor of the New York Stock Exchange on that
day. Otherwise, Fund shares will be purchased at the public offering
price determined as of the close of trading on the floor of the New York
Stock Exchange on the next business day, except where shares are
purchased through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by
the close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor or its designee by the
close of its business day (normally 5:15 p.m., New York time) will be
based on the public offering price per share determined as of the close
of trading on the floor of the New York Stock Exchange on that day.
Otherwise, the orders will be based on the next determined public
offering price. It is the dealer's responsibility to transmit orders so
that they will be received by the Distributor or its designee before the
close of its business day. For certain institutions that have entered
into agreements with the Distributor, payment for the purchase of Fund
shares may be transmitted, and must be received by the Transfer Agent,
within three business days after the order is placed. If such payment is
not received within three business days after the order is placed, the
order may be canceled and the institution could be held liable for
resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the
amount invested through such dealers in Fund shares by employees
participating in qualified or non-qualified employee benefit plans or
other programs where (i) the employers or affiliated employers
maintaining such plans or programs have a minimum of 250 employees
eligible for participation in such plans or programs or (ii) such plan's
or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Plan sponsors,
administrators or trustees, as applicable, are responsible for notifying
the Distributor when the relevant requirement is satisfied. Shares of
funds in the Dreyfus Family of Funds then held by Eligible Benefit Plans
will be aggregated to determine the fee payable. The Distributor reserves
the right to cease paying these fees at any
Page 11
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other
source available to it.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Fund could
subject you to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").
CLASS A SHARES -- The public offering price for Class A shares is the
net asset value per share of that Class plus, except for shareholders
beneficially owning Fund shares on December 31, 1995 or November 30,
1996, a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
-----------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
---------------------------- -------------- ----------------- -----------------------
<S> <C> <C> <C>
Less than $50,000. 5.75 6.10 5.00
$50,000 to less than $100,000 4.50 4.70 3.75
$100,000 to less than $250,000 3.50 3.60 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more -0- -0- -0-
For shareholders beneficially owning Fund shares on November
30, 1996, the public offering price for Class A shares is the net asset
value per share of that Class plus a sales load as shown below:
TOTAL SALES LOAD
-----------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
---------------------------- -------------- ----------------- -----------------------
Less than $50,000. 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more -0- -0- -0-
A CDSC of 1% will be assessed at the time of redemption of
Class A shares purchased without an initial sales
charge as part of an investment of at least $1,000,000 and redeemed
within one year of purchase. The terms contained in the section of the
Fund's Prospectus entitled "How to Redeem Shares_Contingent Deferred
Sales Charge" (other than the amount of the CDSC and time periods) are
applicable to the Class A shares subject to a CDSC. Letter of Intent and
Right of Accumulation apply to such purchases of Class A shares.
For shareholders beneficially owning Fund shares on December
31, 1995, the public offering price for Class A shares is the net asset
value per share of that Class plus a sales load as shown below:
TOTAL SALES LOAD
-----------------------------------
AS A % OF AS A % OF
OFFERING PRICE NET ASSET VALUE
AMOUNT OF TRANSACTION PER SHARE PER SHARE
---------------------------- ----------------- -----------------
Less than $100,000 3.00 3.10
$100,000 to less than $250,000 2.70 2.80
$250,000 to less than $500,000 2.25 2.30
$500,000 to less than $1,000,000 2.00 2.00
$1,000,000 or more 1.00 1.00
</TABLE>
Page 12
Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into an
agreement with the Distributor pertaining to the sale of Fund shares
(or which otherwise have a brokerage related or clearing arrangement with
an NASD member firm or financial institution with respect to the
sale of such shares) may purchase Class A shares for themselves directly
or pursuant to an employee benefit plan or other program, or for their
spouses or minor children, at net asset value, provided that they have
furnished the Distributor with such information as it may request from
time to time in order to verify eligibility for this privilege. This
privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible
to purchase Class A shares at net asset value. In addition, Class A
shares are offered at net asset value to full-time or part-time employees
of The Dreyfus Corporation or any of its affiliates or subsidiaries,
directors of The Dreyfus Corporation, Board members of a fund advised by
The Dreyfus Corporation, including members of the Company's Board, or the
spouse or minor child of any of the foregoing.
Class A shares will be offered at net asset value without a
sales load to employees participating in Eligible Benefit Plans. Class A
shares also may be purchased (including by exchange) at net asset value
without a sales load for Dreyfus-sponsored IRA "Rollover Accounts" with
the distribution proceeds from a qualified retirement plan or a
Dreyfus-sponsored 403(b)(7) plan, provided that, at the time of such
distribution, such qualified retirement plan or Dreyfus-sponsored
403(b)(7) plan (a) met the requirements of an Eligible Benefit Plan and
all or a portion of such plan's assets were invested in funds in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans, or (b) invested all of its assets in certain
funds in the Premier Family of Funds or the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans.
Class A shares may be purchased at net asset value through
certain broker-dealers and other financial institutions which have
entered into an agreement with the Distributor, which includes a
requirement that such shares be sold for the benefit of clients
participating in a "wrap account" or a similar program under which such
clients pay a fee to such broker-dealer or other financial institution.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, through a broker-dealer or other
financial institution with the proceeds from the redemption of shares of
a registered open-end management investment company not managed by The
Dreyfus Corporation or its affiliates. The purchase of Class A shares of
the Fund must be made within 60 days of such redemption and the
shareholder must have either (i) paid an initial sales charge or a
contingent deferred sales charge or (ii) been obligated to pay at any
time during the holding period, but did not actually pay on redemption, a
deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, by (i) qualified separate accounts
maintained by an insurance company pursuant to the laws of any State or
territory of the United States, (ii) a State, county or city or
instrumentality thereof, (iii) a charitable organization (as defined in
Section 501(c)(3) of the Code) investing $50,000 or more in Fund shares,
and (iv) a charitable remainder trust (as defined in Section 501(c)(3) of
the Code).
The dealer reallowance may be changed from time to time but
will remain the same for all dealers. The Distributor, at its expense,
may provide additional promotional incentives to dealers that sell shares
of funds advised by The Dreyfus Corporation which are sold with a sales
load, such as Class A shares. In some instances, those incentives may be
offered only to certain dealers who have sold or may sell significant
amounts of shares. Dealers receive a larger percentage of the sales load
from the Distributor than they receive for selling most other funds.
Page 13
CLASS B SHARES -- The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on certain
redemptions of Class B shares as described under "How to Redeem Shares."
The Distributor compensates certain Service Agents for selling Class B
and Class C shares at the time of purchase from the Distributor's own
assets. The proceeds of the CDSC and the distribution fee, in part, are
used to defray these expenses.
CLASS C SHARES -- The public offering price for Class C shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on
redemptions of Class C shares made within the first year of purchase.
See "Class B Shares" above and "How to Redeem Shares."
CLASS R SHARES -- The public offering for Class R shares is the net
asset value per share of that Class.
RIGHT OF ACCUMULATION--CLASS A SHARES -- Reduced sales loads apply to
any purchase of Class A shares, shares of other funds in the Premier
Family of Funds, shares of certain other funds advised by The Dreyfus
Corporation which are sold with a sales load and shares acquired by a
previous exchange of such shares (hereinafter referred to as "Eligible
Funds"), by you and any related "purchaser" as defined in the Statement
of Additional Information, where the aggregate investment, including such
purchase, is $50,000 or more. If, for example, you previously purchased
and still hold Class A shares, or shares of any other Eligible Fund or
combination thereof, with an aggregate current market value of $40,000
and subsequently purchase Class A shares or shares of an Eligible Fund
having a current value of $20,000, the sales load applicable to the
subsequent purchase would be reduced to 4.5% of the offering price. All
present holdings of Eligible Funds may be combined to determine the
current offering price of the aggregate investment in ascertaining the
sales load applicable to each subsequent purchase. Class A shares
purchased by shareholders beneficially owning Fund shares on December 31,
1995, or November 30, 1996, are subject to different sales load
schedules, as described above under "Class A Shares."
To qualify for reduced sales loads, at the time of purchase
you or your Service Agent must notify the Distributor if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE -- You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may
modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of shares by telephoning 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may
not be available to clients of certain Service Agents and some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus. You should consult your Service
Agent in this regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, shares of
the same Class of certain other funds managed or administered by The
Dreyfus Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment objectives
which may be of interest to you. You also may exchange your Fund shares
that are subject to
Page 14
a CDSC for shares of Dreyfus Worldwide Dollar Money Market Fund, Inc. The
shares so purchased will be held in a special account created solely for
this purpose ("Exchange Account"). Exchanges of shares from an Exchange
Account only can be made into certain other funds managed or administered
by The Dreyfus Corporation. No CDSC is charged when an investor exchanges
into an Exchange Account; however, the applicable CDSC will be imposed
when shares are redeemed from an Exchange Account or other applicable
Fund account. Upon redemption, the applicable CDSC will be calculated
without regard to the time such shares were held in an Exchange Account.
See "How to Redeem Shares." Redemption proceeds for Exchange Account
shares are paid by Federal wire or check only. Exchange Account shares
also are eligible for the Auto-Exchange Privilege, Dividend Sweep and
the Automatic Withdrawal Plan. To use this service, you should consult
your Service Agent or call 1-800-645-6561 to determine if it is available
and whether any conditions are imposed on its use. With respect to Class
R shares held by Retirement Plans, exchanges may be made only between a
shareholder's Retirement Plan account in one fund and such shareholder's
Retirement Plan account in another fund.
To request an exchange, your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing
or by telephone. Before any exchange, you must obtain and should review
a copy of the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained by calling 1-800-645-6561.
Except in the case of personal retirement plans, the shares being
exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must
have a value of at least the minimum initial investment required for the
fund into which the exchange is being made. The ability to issue
exchange instructions by telephone is given to all Fund shareholders
automatically, unless you check the applicable "No" box on the Account
Application, indicating that you specifically refuse this Privilege. The
Telephone Exchange Privilege may be established for an existing account
by written request, signed by all shareholders on the account, or by a
separate signed Shareholder Services Form, also available by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege,
you may telephone exchange instructions by calling 1-800-645-6561 or, if
you are calling from overseas, call 516-794-5452. See "How to Redeem
Shares_Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where available,
will be automatically carried over to the fund into which the exchange is
made: Telephone Exchange Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, TELETRANSFER Privilege and the dividend/capital
gain distribution option (except for Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to exchanges of
Class A shares into funds sold with a sales load. No CDSC will be
imposed on Class B or Class C shares at the time of an exchange; however,
Class B or Class C shares acquired through an exchange will be subject to
the higher CDSC applicable to the exchanged or acquired shares. The CDSC
applicable on redemption of the acquired Class B or Class C shares will
be calculated from the date of the initial purchase of the Class B or
Class C shares exchanged, as the case may be. If you are exchanging Class
A shares into a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a reduced
sales load, if the shares of the fund from which you are exchanging were:
(a) purchased with a sales load, (b) acquired by a previous exchange from
shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of the exchange your
Service Agent must notify the Distributor. Any such qualification is
subject to confirmation of your holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of Additional
Information. No fees currently are charged shareholders directly in
connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' writ-
Page 15
ten notice, to charge shareholders a nominal fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves
the right to reject any exchange request in whole or in part. The
availability of Fund Exchanges may be modified or terminated at any time
upon notice to shareholders. See "Dividends, Distributions and Taxes."
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares
of the Fund, in shares of the same Class of other funds in the Premier
Family of Funds or certain other funds in the Dreyfus Family of Funds of
which you are currently an investor. With respect to Class R shares held
by Retirement Plans, exchanges pursuant to the Auto-Exchange Privilege
may be made only between a shareholder's Retirement Plan account in one
fund and such shareholder's Retirement Plan account in another fund. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth day of the month according to
the schedule you have selected. Shares will be exchanged at the
then-current net asset value; however, a sales load may be charged with
respect to exchanges of Class A shares into funds sold with a sales load.
No CDSC will be imposed on Class B or Class C shares at the time of an
exchange; however, Class B or Class C shares acquired through an exchange
will be subject to the higher CDSC applicable to the exchanged or
acquired shares. The CDSC applicable on redemption of the acquired Class
B or Class C shares will be calculated from the date of the initial
purchase of the Class B or Class C shares exchanged, as the case may be.
See "Shareholder Services" in the Statement of Additional Information.
The right to exercise this Privilege may be modified or canceled by the
Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to Premier
Aggressive Growth Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. For more information
concerning this Privilege and the funds in the Premier Family of Funds or
the Dreyfus Family of Funds eligible to participate in this Privilege, or
to obtain an Auto-Exchange Authorization Form, please call toll free
1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction) at
regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both days. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization
form with the Transfer Agent. You may obtain the necessary authorization
form by calling 1-800-645-6561. You may cancel your participation in
this Privilege or change the amount of purchase at any time by mailing
written notification to Premier Aggressive Growth Fund, P.O. Box 6587,
Providence, Rhode Island 02940-6587, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427, and the notification will be
effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into
your Fund account. You may deposit as much of such payments as you elect.
Page 16
To enroll in Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment
that you desire to include in this Privilege. The appropriate form may
be obtained by calling 1-800-645-6561. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any
time to terminate your participation by notifying in writing the
appropriate Federal agency. The Fund may terminate your participation
upon 30 days' notice to you.
DIVIDEND OPTIONS
Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of the same Class of another fund in the Premier Family of Funds
or the Dreyfus Family of Funds of which you are a shareholder. Shares of
the other fund will be purchased at the then-current net asset value;
however, a sales load may be charged with respect to investments in
shares of a fund sold with a sales load. If you are investing in a fund
that charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load. If you are
investing in a fund or class that charges a CDSC, the shares purchased
will be subject on redemption to the CDSC, if any, applicable to the
purchased shares. See "Shareholder Services" in the Statement of
Additional Information. Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if
any, from the Fund to a designated bank account. Only an account
maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may charge a fee for
this service.
For more information concerning these privileges or to request
a Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to Premier
Aggressive Growth Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587. To select a new fund after cancellation, you must submit a
new Dividend Options Form. Enrollment in or cancellation of these
privileges is effective three business days following receipt. These
privileges are available only for existing accounts and may not be used
to open new accounts. Minimum subsequent investments do not apply for
Dividend Sweep. The Fund may modify or terminate these privileges at any
time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for Dividend Sweep.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus sponsored retirement
plans, may permit certain participants to establish an automatic
withdrawal plan from such Retirement Plans. Participants should consult
their Retirement Plan sponsor and tax adviser for details. Such a
withdrawal plan is different than the Automatic Withdrawal Plan. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which certificates have
been issued may not be redeemed through the Automatic Withdrawal Plan.
No CDSC with respect to Class B shares will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the
amounts withdrawn under the plan do not exceed on an annual basis 12% of
the account value at the time the shareholder elects to participate in
the Automatic Withdrawal Plan. Withdrawals with respect to Class B shares
under the Automatic Withdrawal Plan that exceed on an annual basis 12% of
the value of the shareholder's account will be subject to a CDSC on the
amounts exceeding 12% of the initial account value. Class C shares
withdrawn pursuant to the Automatic Withdrawal Plan will be subject to
any applicable CDSC. Purchases of additional Class A shares where the
sales load is imposed concurrently with withdrawals of Class A shares
generally are undesirable.
Page 17
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by calling
the following numbers toll free: for Keogh Plans, please call
1-800-358-5566; for IRAs and IRA "Rollover Accounts," please call
1-800-645-6561; for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7)
Plans, please call 1-800-322-7880.
LETTER OF INTENT--CLASS A SHARES
By signing a Letter of Intent form, which can be obtained by
calling 1-800-645-6561, you become eligible for the reduced sales load
applicable to the total number of Eligible Fund shares purchased in a
13-month period pursuant to the terms and conditions set forth in the
Letter of Intent. A minimum initial purchase of $5,000 is required. To
compute the applicable sales load, the offering price of shares you hold
(on the date of submission of the Letter of Intent) in any Eligible Fund
that may be used toward "Right of Accumulation" benefits described above
may be used as a credit toward completion of the Letter of Intent.
However, the reduced sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent.
The escrow will be released when you fulfill the terms of the Letter of
Intent by purchasing the specified amount. If your purchases qualify for
a further sales load reduction, the sales load will be adjusted to
reflect your total purchase at the end of 13 months. If total purchases
are less than the amount specified, you will be requested to remit an
amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If
such remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will
redeem an appropriate number of Class A shares of the Fund held in escrow
to realize the difference. Signing a Letter of Intent does not bind you
to purchase, or the Fund to sell, the full amount indicated at the sales
load in effect at the time of signing, but you must complete the intended
purchase to obtain the reduced sales load. At the time you purchase Class
A shares, you must indicate your intention to do so under a Letter of
Intent.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund
will redeem the shares at the next determined net asset value as
described below. If you hold Fund shares of more than one Class, any
request for redemption must specify the Class of shares being redeemed.
If you fail to specify the Class of shares to be redeemed or if you own
fewer shares of the Class than specified to be redeemed, the redemption
request may be delayed until the Transfer Agent receives further
instructions from you or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC)
when shares are redeemed. Service Agents or other institutions may charge
their clients a nominal fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted
with the redemption request. The value of the shares redeemed may be more
or less than their original cost, depending upon the Fund's then-current
net asset value.
Distributions from qualified Retirement Plans, IRAs (including
IRA "Rollover Accounts") and certain non-qualified deferred compensation
plans, except distributions representing returns of non-deductible
contributions to the Retirement Plan or IRA, generally are taxable income
to the participant. Distributions from such a Retirement Plan or IRA to
a participant prior to the time the participant reaches age 591/2 or
becomes permanently disabled may subject the participant to an additional
10% penalty tax imposed by the IRS. Participants should consult
Page 18
their tax advisers concerning the timing and consequences of
distributions from a Retirement Plan or IRA. Participants in qualified
Retirement Plans will receive a disclosure statement describing the
consequences of a distribution from such a Plan from the administrator,
trustee or custodian of the Plan, before receiving the distribution. The
Fund will not report to the IRS redemptions of Fund shares by qualified
Retirement Plans, IRAs or certain non-qualified deferred compensation
plans. The administrator, trustee or custodian of such Retirement Plans
and IRAs will be responsible for reporting distributions from such Plans
and IRAs to the IRS.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption
request in proper form, except as provided by the rules of the Securities
and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE
TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER
PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO
EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS
TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE TELETRANSFER
PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE
TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED
BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE
IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY
REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE
PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF
BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the Transfer
Agent has received your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 45 days' written notice if your account's net
asset value is $500 or less and remains so during the notice period.
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES -- A CDSC payable to the Distributor is imposed on any
redemption of Class B shares which reduces the current net asset value of
your Class B shares to an amount which is lower than the dollar amount of
all payments by you for the purchase of Class B shares of the Fund held
by you at the time of redemption. No CDSC will be imposed to the extent
that the net asset value of the Class B shares redeemed does not exceed
(i) the current net asset value of Class B shares acquired through
reinvestment of dividends or capital gain distributions, plus (ii)
increases in the net asset value of your Class B shares above the dollar
amount of all your payments for the purchase of Class B shares held by
you at the time of redemption.
If the aggregate value of Class B shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC
may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
YEAR SINCE PURCHASE CDSC AS A % OF AMOUNT
PAYMENT WAS MADE INVESTED OR REDEMPTION PROCEEDS
First...................... 4.00
Second..................... 4.00
Third...................... 3.00
Fourth..................... 3.00
Fifth...................... 2.00
Sixth...................... 1.00
Page 19
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and distributions; then of amounts representing the increase in
net asset value of Class B shares above the total amount of payments for
the purchase of Class B shares made during the preceding six years; then
of amounts representing the cost of shares purchased six years prior to
the redemption; and finally, of amounts representing the cost of shares
held for the longest period of time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10
share for a cost of $1,000. Subsequently, the shareholder acquired five
additional shares through dividend reinvestment. During the second year
after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the net asset value
had appreciated to $12 per share, the value of the investor's shares
would be $1,260 (105 shares at $12 per share). The CDSC would not be
applied to the value of the reinvested dividend shares and the amount
which represents appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate of 4%
(the applicable rate in the second year after purchase) for a total CDSC
of $9.60.
CLASS C SHARES -- A CDSC of 1% payable to the Distributor is imposed
on any redemption of Class C shares within one year of the date of
purchase. The basis for calculating the payment of any such CDSC will be
the method used in calculating the CDSC for Class B shares. See
"Contingent Deferred Sales Charge_Class B Shares" above.
WAIVER OF CDSC -- The CDSC applicable to Class B and Class C shares
may be waived in connection with (a) redemptions made within one year
after the death or disability, as defined in Section 72(m)(7) of the
Code, of the shareholder, (b) redemptions by employees participating in
Eligible Benefit Plans, (c) redemptions as a result of a combination of
any investment company with the Fund by merger, acquisition of assets or
otherwise and (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 701/2 in the case of
an IRA or Keogh plan or custodial account pursuant to Section 403(b) of
the Code, and (e) redemptions made pursuant to the Automatic Withdrawal
Plan as described in the Fund's Prospectus. If the Company's Board
determines to discontinue the waiver of the CDSC, the disclosure in the
Fund's prospectus will be revised appropriately. Any Fund shares subject
to a CDSC which were purchased prior to the termination of such waiver
will have the CDSC waived as provided in the Fund's prospectus at the
time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption
you must notify the Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
entitlement.
PROCEDURES
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent, through the Wire Redemption Privilege, the Telephone Redemption
Privilege or the TELETRANSFER Privilege. If you are a client of a
Selected Dealer, you may redeem shares through the Selected Dealer. If
you have given your Service Agent authority to instruct the Transfer
Agent to redeem shares and to credit the proceeds of such redemptions to
a designated account at your Service Agent, you may redeem shares only in
this manner and in accordance with the regular redemption procedure
described below. If you wish to use the other redemption methods
described below, you must arrange with your Service Agent for delivery of
the required application(s) to the Transfer Agent. Other redemption
procedures may be in effect for clients of certain Service Agents and
institutions. The Fund makes available to certain large institutions the
ability to issue redemption instructions through compatible computer
facilities. The Fund reserves the right to refuse any request made by
wire or tele-
Page 20
phone, including requests made shortly after a change of address, and
may limit the amount involved or the number of such requests. The Fund
may modify or terminate any redemption Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently
is contemplated.
You may redeem shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone
redemption privilege or telephone exchange privilege (which is granted
automatically unless you refuse it), you authorize the Transfer Agent to
act on telephone instructions from any person representing himself or
herself to be you, or a representative of your Service Agent, and
reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions
are genuine and, if it does not follow such procedures, the Fund or the
Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you
should consider using the other redemption procedures described herein.
Use of these other redemption procedures may result in your redemption
request being processed at a later time than it would have been if
telephone redemption had been used. During the delay, the Fund's net
asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may
redeem shares by written request mailed to Premier Aggressive Growth
Fund, P.O. Box 9671, Providence, Rhode Island 02940-9671. Redemption
requests must be signed by each shareholder, including each owner of a
joint account, and each signature must be guaranteed. The Transfer Agent
has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from
domestic banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program. If
you have any questions with respect to signature-guarantees, please
contact your Service Agent or call the telephone number listed on the
cover of this Prospectus.
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to your account at a
bank which is a member of the Federal Reserve System, or a correspondent
bank if your bank is not a member. You also may direct that redemption
proceeds be paid by check (maximum $150,000 per day) made out to the
owners of record and mailed to your address. Redemption proceeds of less
than $1,000 will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of not more
than $250,000 wired within any 30-day period. You may telephone
redemption requests by calling 1-800-645-6561 or, if you are calling from
overseas, call 516-794-5452. The Statement of Additional Information sets
forth instructions for transmitting redemption requests by wire. Shares
held under Keogh Plans, IRAs or other retirement plans, and shares for
which certificates have been issued, are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and
mailed to your address. You may telephone redemption instructions by
calling 1-800-645-6561 or, if you are calling from overseas, call
516-794-5452. Shares held under Keogh Plans, IRAs or other retirement
plans, and shares for which certificates have been issued, are not
eligible for this Privilege.
Page 21
TELETRANSFER PRIVILEGE -- You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your
Fund account and your bank account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House
member may be so designated. Redemption proceeds will be on deposit in
your account at an Automated Clearing House member bank ordinarily two
days after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the
TELETRANSFER Privilege for transfer to their bank account not more than
$250,000 within any 30-day period. The Fund reserves the right to refuse
any request made by telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of
such requests.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER redemption of shares by telephoning 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.
REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that
it is received by the Transfer Agent prior to the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), the redemption request will be effective on that day. If a
redemption request is received by the Transfer Agent after the close of
trading on the floor of the New York Stock Exchange, the redemption
request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited
to your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
In addition, the Distributor or its designee will accept
orders from Selected Dealers with which the Distributor has sales
agreements for the repurchase of shares held by shareholders. Repurchase
orders received by dealers by the close of trading on the floor of the
New York Stock Exchange on any business day and transmitted to the
Distributor or its designee prior to the close of its business day
(normally 5:15 p.m., New York time) are effected at the price determined
as of the close of trading on the floor of the New York Stock Exchange on
that day. Otherwise, the shares will be redeemed at the next determined
net asset value. It is the responsibility of the Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement
is discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE -- You may reinvest up to the number of Class
A or Class B shares you have redeemed, within 45 days of redemption, at
the then-prevailing net asset value without a sales load, or reinstate
your account for the purpose of exercising the Exchange Privilege. Upon
reinvestment, with respect to Class B, or if the Class A shares were
subject to a CDSC, the shareholders's account will be credited with an
amount equal to the CDSC previously paid upon redemption of the Class A
or Class B shares reinvested. The Reinvestment Privilege may be exercised
only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
(CLASS A, CLASS B AND CLASS C ONLY)
Class B and Class C shares are subject to a Distribution Plan
and Class A, Class B and Class C shares are subject to a Shareholder
Services Plan.
DISTRIBUTION PLAN -- Under the Distribution Plan, adopted pursuant to
Rule 12b-1 under the 1940 Act, the Fund pays the Distributor for
distributing the Fund's Class B and Class C shares at an annual rate of
.75 of 1% of the value of the average daily net assets of Class B and
Class C.
SHAREHOLDER SERVICES PLAN -- Under the Shareholder Services Plan, the
Fund pays the
Page 22
Distributor for the provision of certain services to the
holders of Class A, Class B and Class C shares a fee at the annual rate
of .25 of 1% of the value of the average daily net assets of each such
Class. 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. The Distributor may
make payments to Service Agents in respect of these services. The
Distributor determines the amounts to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Code, the Fund is treated as a separate entity for
purposes of qualification and taxation as a regulated investment company.
The Fund ordinarily pays dividends from its net investment income and
distributes net realized securities gains, if any, once a year, but it
may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive dividends and distributions in cash or to reinvest in
additional shares at net asset value. Dividends and distributions paid in
cash to Retirement Plans, however, may be subject to additional tax as
described below. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will
be calculated at the same time and in the same manner and will be of the
same amount, except that the expenses attributable solely to a particular
Class will be borne exclusively by such Class. Class B and C shares will
receive lower per share dividends than Class A shares which will receive
lower per share dividends than Class R shares because of the higher
expenses borne by the relevant Class. See "Fee Table."
Dividends paid by the Fund to qualified Retirement Plans, IRAs
(including IRA "Rollover Accounts") or certain non-qualified deferred
compensation plans ordinarily will not be subject to taxation until the
proceeds are distributed from the Retirement Plan or IRA. The Fund will
not report dividends paid to such Plans and IRAs to the IRS. Generally,
distributions from such Retirement Plans and IRAs, except those
representing returns of non-deductible contributions thereto, will be
taxable as ordinary income and, if made prior to the time the participant
reaches age 591/2, generally will be subject to an additional tax equal
to 10% of the taxable portion of the distribution. If the distribution
from such a Retirement Plan (other than certain governmental or church
plans) or IRA for any taxable year following the year in which the
participant reaches age 701/2 is less than the "minimum required
distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed by the IRS. The administrator, trustee or
custodian of such a Retirement Plan or IRA will be responsible for
reporting distributions from such Plans and IRAs to the IRS.
Participants in qualified Retirement Plans will receive a disclosure
statement describing the consequences of a distribution from such a Plan
from the administrator, trustee or custodian of the Plan prior to
receiving the distribution. Moreover, certain contributions to a
qualified Retirement Plan or IRA in excess of the amounts permitted by
law may be subject to an excise tax.
Page 23
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund will be taxable to U.S.
shareholders and to certain non-qualified Retirement Plans as ordinary
income whether received in cash or reinvested in additional shares.
Distributions from net realized long-term securities gains of the Fund
will be taxable to U.S. shareholders and to certain non-qualified
Retirement Plans as long-term capital gains for Federal income tax
purposes, regardless of how long shareholders have held their Fund shares
and whether such distributions are received in cash or reinvested in Fund
shares. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess
of 28%. Dividends and distributions may be subject to state and local
taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate
of 30%, unless the foreign investor claims the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term
securities gains paid by the Fund to a foreign investor as well as the
proceeds of any redemptions from a foreign investor's account, regardless
of the extent to which gain or loss may be realized, generally will not
be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described below,
unless the foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will receive
periodic summaries of your account which will include information as to
dividends and distributions from securities gains, if any, paid during
the year. Participants in a Retirement Plan or IRA should receive
periodic statements from the trustee, custodian or administrator of their
Plan.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares if an investor exchanges such shares
for shares of another fund advised or administered by The Dreyfus
Corporation within 91 days of purchase and such other fund reduces or
eliminates its otherwise applicable sales load for the purpose of the
exchange. In this case, the amount of the sales load charged the
investor for such shares, up to the amount of the reduction of the sales
load charge on the exchange, is not included in the basis of such shares
for purposes of computing gain or loss on the exchange, and instead is
added to the basis of the fund shares received on the exchange.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize, or an exchange on behalf of a Retirement Plan which is not tax
exempt may result in, a taxable gain or loss.
With respect to individual investors and certain non-qualified
Retirement Plans, Federal regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury 31% of
dividends, distributions from net realized securities gains and the
proceeds of any redemption, regardless of the extent to which gain or
loss may be realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with opening an
account is correct or that such shareholder has not received notice from
the IRS of being subject to backup withholding as a result of a failure
to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect
or if a shareholder has failed to properly report taxable dividend and
interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account, and may be
claimed as a credit on the record owner's Federal income tax return.
Management of the Company believes that the Fund has qualified
for the fiscal year ended September 30, 1995 as a "regulated investment
company" under the Code. The Fund intends to continue to so qualify if
such qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income tax
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. The Fund is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax adviser regarding specific
questions as to Federal, state or local taxes.
Page 24
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may be
calculated on the basis of average annual total return and/or total
return. These total return figures reflect changes in the price of the
shares and assume that any income dividends and/or capital gains
distributions made by the Fund during the measuring period were
reinvested in shares of the same Class. These figures also take into
account any applicable service and distribution fees. As a result, at any
given time, the performance of Class B and Class C should be expected to
be lower than that of Class A and the performance of Class A, Class B and
Class C should be expected to be lower than that of Class R. Performance
for each Class will be calculated separately.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment was purchased with
an initial payment of $1,000 and that the investment was redeemed at the
end of a stated period of time, after giving effect to the reinvestment
of dividends and distributions during the period. The return is expressed
as a percentage rate which, if applied on a compounded annual basis,
would result in the redeemable value of the investment at the end of the
period. Advertisements of the Fund's performance will include the Fund's
average annual total return for one, five and ten year periods.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
net asset value (or maximum offering price in the case of Class A shares)
per share at the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return. Total return also may
be calculated by using the net asset value per share at the beginning of
the period instead of the maximum offering price per share at the
beginning of the period for Class A shares or without giving effect to
any applicable CDSC at the end of the period for Class B or Class C
shares. Calculations based on the net asset value per share do not
reflect the deduction of the sales load on the Fund's Class A shares,
which, if reflected, would reduce the performance quoted.
Performance will vary from time to time and past results are
not necessarily representative of future results. You should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including data from
Lipper Analytical Services, Inc., Standard & Poor's 500 Composite Stock
Price Index, the Dow Jones Industrial Average, Morningstar, Inc. and
other industry publications.
GENERAL INFORMATION
The Company was originally incorporated under Delaware law in
November 1968 and became a Maryland corporation on April 30, 1974.
Before January 2, 1996, the Company's name was Premier Capital Growth
Fund, Inc. and before February 1993 it was The Dreyfus Leverage Fund,
Inc. The Company is authorized to issue 800 million shares of Common
Stock (with 200 million allocated to the Fund), par value $1.00 per
share. The Fund's shares are classified into four classes_Class A, Class
B, Class C and Class R. Each share has one vote and shareholders will
vote in the aggregate and not by class except as otherwise required by
law. However, only holders of Class B or Class C shares, as the case may
be, will be entitled to vote on matters submitted to shareholders
pertaining to its Distribution Plan.
Unless otherwise required by the 1940 Act, ordinarily it will
not be necessary for the Fund to hold annual meetings of shareholders. As
a result, Fund shareholders may not consider
Page 25
each year the election of Board members or the appointment of auditors.
However, pursuant to the Company's By-Laws, the holders of at least 10%
of the shares outstanding and entitled to vote may require the Company
to hold a special meeting of shareholders for purposes of removing a
Board member from office or for any other purpose. Shareholders may
remove a Board member by the affirmative vote of a majority of the
Company's outstanding voting shares. In addition, the Board will call a
meeting of shareholders for the purpose of electing Board members if, at
any time, less than a majority of the Board members then holding office
have been elected by shareholders.
The Company is a "series fund," which is a mutual fund divided
into separate portfolios, each of which is treated as a separate entity
for certain matters under the 1940 Act and for other purposes. A
shareholder of one portfolio is not deemed to be a shareholder of any
other portfolio. For certain matters shareholders vote together as a
group; as to others they vote separately by portfolio. By this
Prospectus, shares of the Fund are being offered. Other portfolios are
sold pursuant to other offering documents.
To date, the Board has authorized the creation of three series
of shares. All consideration received by the Company for shares of one
of the series and all assets in which such consideration is invested will
belong to that series (subject only to the rights of creditors of the
Company) and will be subject to the liabilities related thereto. The
income attributable to, and the expenses of, one series are treated
separately from those of the other series. The Company has the ability
to create, from time to time, new series without shareholder approval.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
Page 26
APPENDIX
INVESTMENT TECHNIQUES
LEVERAGE -- Leveraging will exaggerate the effect on net asset value
of any increase or decrease in the market value of the Fund's portfolio.
Money borrowed for leveraging will be limited to 331\3% of the value of
the Fund's total assets. These borrowings will be subject to interest
costs which may or may not be recovered by appreciation of the securities
purchased; in certain cases, interest costs may exceed the return
received on the securities purchased.
The Fund may enter into reverse repurchase agreements with
banks, brokers or dealers. This form of borrowing involves the transfer
by the Fund of an underlying debt instrument in return for cash proceeds
based on a percentage of the value of the security. The Fund retains the
right to receive interest and principal payments on the security. At an
agreed upon future date, the Fund repurchases the security at principal
plus accrued interest. Except for these transactions, the Fund's
borrowings generally will be unsecured.
SHORT-SELLING -- In these transactions, the Fund sells a security it
does not own in anticipation of a decline in the market value of the
security. To complete the transaction, the Fund must borrow the security
to make delivery to the buyer. The Fund is obligated to replace the
security borrowed by purchasing it subsequently at the market price at
the time of replacement. The price at such time may be more or less than
the price at which the security was sold by the Fund. The Fund will
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; it will realize a gain if the security declines in price
between those dates.
Securities will not be sold short if, after effect is given to
any such short sale, the total market value of all securities sold short
would exceed 25% of the value of the Fund's net assets. The Fund may not
sell short the securities of any single issuer listed on a national
securities exchange to the extent of more than 5% of the value of the
Fund's net assets. The Fund may not sell short the securities of any
class of an issuer if, as a result of such sale, the Fund would have sold
short in the aggregate more than 5% of the outstanding securities of that
class.
The Fund also may make short sales "against the box," in which
the Fund enters into a short sale of a security it owns in order to hedge
an unrealized gain on the security. At no time will more than 15% of the
value of the Fund's net assets be in deposits on short sales against the
box.
USE OF DERIVATIVES -- Although the Fund will not be a commodity pool,
Derivatives subject the Fund to the rules of the Commodity Futures
Trading Commission which limit the extent to which the Fund can invest in
certain Derivatives. The Fund may invest in futures contracts and
options with respect thereto for hedging purposes without limit.
However, the Fund may not invest in such contracts and options for other
purposes if the sum of the amount of initial margin deposits and premiums
paid for unexpired options with respect to such contracts, other than for
bona fide hedging purposes, exceed 5% of the liquidation value of the
Fund's assets, after taking into account unrealized profits and
unrealized losses on such contracts and options; provided, however, that
in the case of an option that is in-the-money at the time of purchase,
the in-the-money amount may be excluded in calculating the 5% limitation.
The Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. The Fund may
write (i.e., sell) covered call and put option contracts to the extent of
20% of the value of its net assets at the time such option contracts are
written. When required by the Securities and Exchange Commission, the
Fund will set aside permissible liquid assets in a segregated account to
cover its obligations relating to its purchase of Derivatives. To
maintain this required cover, the Fund may have to sell portfolio
securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at a reasonable price.
Page 27
Derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on the Fund's
performance.
If the Fund invests in Derivatives at inappropriate times or
judges market conditions incorrectly, such investments may lower the
Fund's return or result in a loss. The Fund also could experience losses
if its Derivatives were poorly correlated with its other investments, or
if the Fund were unable to liquidate its position because of an illiquid
secondary market. The market for many Derivatives is, or suddenly can
become, illiquid. Changes in liquidity may result in significant, rapid
and unpredictable changes in the prices for Derivatives.
FOREIGN CURRENCY TRANSACTIONS -- Foreign currency transactions may be
entered into for a variety of purposes, including: to fix in U.S.
dollars, between trade and settlement date, the value of a security the
Fund has agreed to buy or sell; or to hedge the U.S. dollar value of
securities the Fund already owns, particularly in which the foreign
security is denominated; or to gain exposure to the foreign currency in
an attempt to realize gains.
Foreign currency transactions may involve, for example, the
Fund's purchase of foreign currencies for U.S. dollars or the maintenance
of short positions in foreign currencies, which would involve the Fund
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the
value of the currency sold relative to the currency the Fund contracted
to receive in the exchange. The Fund's success in these transactions will
depend principally on The Dreyfus Corporation's ability to predict
accurately the future exchange rates between foreign currencies and the
U.S. dollar.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES -- Convertible securities are fixed-income
securities that may be converted at either a stated price or stated rate
into underlying shares of common stock and, therefore, are deemed to be
equity securities for purposes of the Fund's management policies.
Convertible securities have characteristics similar to both fixed-income
and equity securities. Convertible securities generally are subordinated
to other similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and convertible
preferred stock is senior to common stock, of the same issuer. Because
of the subordination feature, however, convertible securities typically
have lower ratings than similar non-convertible securities.
AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS -- The Fund
may invest in the securities of foreign issuers in the form of American
Depositary Receipts ("ADRs") and European Depositary Receipts ("EDRs").
These securities may not necessarily be denominated in the same currency
as the securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs,
which are sometimes referred to as Continental Depositary Receipts
("CDRs"), are receipts issued in Europe typically by non-United States
banks and trust companies that evidence ownership of either foreign or
domestic securities. Generally, ADRs in registered form are designed for
use in the United States securities markets and EDRs and CDRs in bearer
form are designed for use in Europe.
WARRANTS -- A warrant is an instrument issued by a corporation which
gives the holder the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified period of
time. The Fund may invest up to 5% of its net assets in warrants, except
that this limitation does not apply to warrants purchased by the Fund
that are sold in units with, or attached to, other securities.
MONEY MARKET INSTRUMENTS -- The Fund may invest, in the circumstances
described under "Description of the Fund--Management Policies," in the
following types of money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities include U.S.
Treasury securities that differ in their interest rates, maturities and
times of issuance. Some obligations issued or guaranteed by U.S.
Page 28
Government agencies and instrumentalities are supported by the full faith
and credit of the U.S. Treasury; others, by the right of the issuer to
borrow from the Treasury; others, by discretionary authority of the U.S.
Government to purchase certain obligations of the agency or
instrumentality; and others, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates
of interest. While the U.S. Government provides financial support to such
U.S. Government-sponsored agencies and instrumentalities, no assurance
can be given that it will always do so since it is not so obligated by
law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund
buys, and the seller agrees to repurchase, a security at a mutually
agreed upon time and price (usually within seven days). The repurchase
agreement thereby determines the yield during the purchaser's holding
period, while the seller's obligation to repurchase is secured by the
value of the underlying security. Repurchase agreements could involve
risks in the event of a default or insolvency of the other party to the
agreement, including possible delays or restrictions upon the Fund's
ability to dispose of the underlying securities. The Fund may enter into
repurchase agreements with certain banks or non-bank dealers.
BANK OBLIGATIONS. The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term
obligations issued by domestic banks, foreign subsidiaries or foreign
branches of domestic banks, domestic and foreign branches of foreign
banks, domestic savings and loan associations and other banking
institutions. With respect to such securities issued by foreign
subsidiaries or foreign branches of domestic banks, and domestic and
foreign branches of foreign banks, the Fund may be subject to additional
investment risks that are different in some respects from those incurred
by a fund which invests only in debt obligations of U.S. domestic
issuers.
Certificates of deposit are negotiable certificates evidencing
the obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time (in no event longer
than seven days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer. These
instruments reflect the obligation both of the bank and the drawer to pay
the face amount of the instrument upon maturity. The other short-term
obligations may include uninsured, direct obligations bearing fixed,
floating or variable interest rates.
COMMERCIAL PAPER. Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs.
The commercial paper purchased by the Fund will consist only of direct
obligations which, at the time of their purchase, are (a) rated not lower
than Prime-1 by Moody's Investors Service, Inc. ("Moody's"), A-1 by
Standard & Poor's Ratings Group, a division of The McGraw Hill Companies,
Inc. ("S&P"), F-1 by Fitch Investors Service, L.P. ("Fitch") or Duff-1 by
Duff & Phelps Credit Rating Co. ("Duff"), (b) issued by companies having
an outstanding unsecured debt issue currently rated at least A3 by
Moody's or A- by S&P, Fitch or Duff, or (c) if unrated, determined by The
Dreyfus Corporation to be of comparable quality to those rated obligations
which may be purchased by the Fund.
INVESTMENT COMPANIES -- The Fund may invest in securities issued by
registered and unregistered investment companies. Under the 1940 Act, the
Fund's investment in such securities currently is limited to (i) 3% of
the total voting stock of any one investment company, (ii) 5% of the
Fund's total assets with respect to any one investment company and (iii)
10% of the Fund's total assets in the aggregate. Investments in the
securities of other investment companies may involve duplication of
advisory fees and certain other expenses.
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of
its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are
not readily marketable, such as certain securities that are subject to
legal or contractual restrictions on resale, repurchase agreements
providing for settlement in more than seven days
Page 29
after notice, and certain privately negotiated, non-exchange traded
options and securities used to cover such options. As to these
securities, the Fund is subject to a risk that should the Fund desire
to sell them when a ready buyer is not available at a price the Fund
deems representative of their value, the value of the Fund's net assets
could be adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER
OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
009P120196
Page 30
[This Page Intentionally Left Blank]
Page 31
PREMIER GROWTH AND INCOME FUND
PROSPECTUS JULY 1, 1996
AS REVISED DECEMBER 1, 1996
Premier Growth and Income Fund (the "Fund") is a separate
non-diversified portfolio of Premier Equity Funds,
Inc., an open-end, management investment company (the "Company"), known
as a mutual fund. The Fund's investment objective is long-term capital
growth, current income and growth of income, consistent with reasonable
investment risk.
By this Prospectus, the Fund is offering four Classes of
shares_Class A, Class B, Class C and Class R_which are described herein.
See "Alternative Purchase Methods."
You can purchase or redeem all Classes of shares by telephone
using the TELETRANSFER Privilege.
The Dreyfus Corporation professionally manages the Fund's
portfolio.
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read and
retained for future reference.
The Statement of Additional Information, dated July 1, 1996,
which may be revised from time to time, provides a further discussion of
certain areas in this Prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The
Securities and Exchange Commission maintains a Web site (http:// www.
sec.gov) that contains the Statement of Additional Information, material
incorporated by reference and other information regarding the Fund. For a
free copy of the Statement of Additional Information, write to the Fund
at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call
1-800-645-6561. When telephoning, ask for Operator 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE NET ASSET VALUE OF FUNDS OF
THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
These securities have not been approved or disapproved by the securities and
exchange commission or any state securities commission nor has the securities
and exchange commission or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary
is a criminal offense.
TABLE OF CONTENTS
Fee Table....................................... 3
Condensed Financial Information................. 4
Alternative Purchase Methods.................... 4
Description of the Fund......................... 6
Management of the Fund.......................... 8
How to Buy Shares............................... 9
Shareholder Services............................ 14
How to Redeem Shares............................ 18
Distribution Plan and Shareholder Services Plan. 22
Dividends, Distributions and Taxes.............. 22
Performance Information......................... 24
General Information............................. 25
Appendix........................................ 27
Page 2
<TABLE>
<CAPTION>
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C CLASS R
<S> <C> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 5.75% None None None
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge) None* 4.00% 1.00% None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees.............. .75% .75% .75% .75%
12b-1 Fees................... None .75% .75% None
Other Expenses (after fee waiver) .50% .50% .50% .25%
Total Fund Operating Expenses (after fee waiver) 1.25% 2.00% 2.00% 1.00%
EXAMPLE
You would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) except where noted, redemption at
the end of each time period:
CLASS A CLASS B CLASS C CLASS R
1 YEAR $ 70 $60/$20** $30/$20** $ 10
3 YEARS $ 95 $93/$63** $63 $ 32
* A contingent deferred sales charge of 1.00% may be assessed on
certain redemptions of Class A shares purchased without an initial
sales charge as part of an investment of $1 million or more.
** Assuming no redemption of shares.
</TABLE>
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS
THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN,
THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN
GREATER OR LESS THAN 5%.
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. Other Expenses and
Total Fund Operating Expenses noted above have been restated to reflect
an undertaking by The Dreyfus Corporation that if, in the fiscal year
ended September 30, 1996, Fund expenses, including the management fee,
but exclusive of the 12b-1 fee, exceed 1.25% of the value of the Fund's
average net assets for the fiscal year, The Dreyfus Corporation may waive
its management fee or bear certain expenses of the Fund to the extent of
such excess expense. The expenses noted above, without reimbursement,
would have been: Other Expenses -- 1.75% for each Class and Total Fund
Operating Expenses -- 2.50% with respect to Class A and Class R and 3.25%
with respect to Class B and Class C. Long-term investors in Class B or
Class C shares could pay more in 12b-1 fees than the economic equivalent
of paying a front-end sales charge. Certain Service Agents (as defined
below) may charge their clients direct fees for effecting transactions in
Fund shares; such fees are not reflected in the foregoing table. For a
further description of the various costs and expenses incurred in the
operation of the Fund, as well as expense reimbursement or waiver
arrangements, see "Management of the Fund," "How to Buy Shares" and
"Distribution Plan and Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The table below sets forth certain information covering the
Fund's investment results for the period indicated. Further financial
data and related notes are included in the Statement of Additional
Information, available upon request.
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 the period December
29, 1995 (commencement of operations) to March 31, 1996 (unaudited). This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS R SHARES
--------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period $12.50 $12.50 $12.50 $12.50
------ ------ ------- -------
INVESTMENT OPERATIONS:
Investment income-net............... .02 .01 .01 .05
Net realized and unrealized gain on investments 3.80 3.75 3.76 3.78
------ ------ ------- -------
TOTAL FROM INVESTMENT OPERATIONS.... 3.82 3.76 3.77 3.83
------ ------ ------- -------
DISTRIBUTIONS;
Dividends from investment income-net (.01) -- -- (.02)
------ ------ ------- -------
Net asset value, end of period...... $16.31 $16.26 $16.27 $16.31
======= ======== ======== ========
TOTAL INVESTMENT RETURN*.............. 30.50% 30.02% 30.08% 30.54%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets* .31% .53% .54% .29%
Ratio of net investment income
to average net assets*.............. .40% .18% .06% .31%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation
(limited to the expense limitation provision of
the Management Agreement)*.......... .68% .68% .68% .68%
Portfolio Turnover Rate*............ 91.89% 91.89% 91.89% 91.89%
Average commission rate paid........ $.2003 $.2003 $.2003 $.2003
Net Assets, end of period
(000's omitted) $3,673 $2,879 $790 $653
* Not annualized.
</TABLE>
Further information about the Fund's performance will be
contained in the Fund's annual report for the fiscal
year ending September 30, 1996, which will be available approximately the
end of November 1996, and which may be obtained without charge by writing
to the address or calling the number set forth on the cover page of this
Prospectus.
ALTERNATIVE PURCHASE METHODS
The Fund offers you four methods of purchasing shares. Orders
for purchases of Class R shares, however, may be placed only for certain
eligible investors as described below. If you are not eligible to
purchase Class R shares, you may choose from Class A, Class B and Class C
the Class of shares that best suits your needs, given the amount of your
purchase, the length of time you expect to hold your shares and any other
relevant circumstances. Each Fund share represents an identical pro rata
interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 5.75% of the public offering price
imposed at the time of purchase. For shareholders beneficially owning
Fund shares on November 30, 1996, Class A shares are sold at the net
asset value plus a maximum initial sales charge of 4.50%. The initial
sales charge may be reduced or waived for certain purchases. See "How to
Buy Shares _ Class A Shares." These shares are subject to an annual
service fee at the rate of .25 of 1% of the value of the average daily
net assets of Class A. See "Distribution Plan and Shareholder Services
Plan _ Shareholder Services Plan."
Page 4
Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 4% contingent deferred sales charge ("CDSC"), which
is assessed only if you redeem Class B shares within six years of
purchase. See "How to Buy Shares_Class B Shares" and "How to Redeem
Shares _ Contingent Deferred Sales Charge _ Class B Shares." These
shares also are subject to an annual service fee at the rate of .25 of 1%
of the value of the average daily net assets of Class B. In addition,
Class B shares are subject to an annual distribution fee at the rate of
.75 of 1% of the value of the average daily net assets of Class B. See
"Distribution Plan and Shareholder Services Plan." The distribution fee
paid by Class B will cause such Class to have a higher expense ratio and
to pay lower dividends than Class A. Approximately six years after the
date of purchase, Class B shares automatically will convert to Class A
shares, based on the relative net asset values for shares of each such
Class, and will no longer be subject to the distribution fee. Class B
shares that have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together with other
Class B shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares not
acquired through the reinvestment of dividends and distributions.
Class C shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class C shares are
subject to a 1% CDSC, which is assessed only if you redeem Class C shares
within one year of purchase. See "How to Buy Shares -- Class C Shares"
and "How to Redeem Shares -- Contingent Deferred Sales Charge _ Class C
Shares." These shares also are subject to an annual service fee at the
rate of .25 of 1%, and an annual distribution fee at the rate of .75 of
1%, of the value of the average daily net assets of Class C. See
"Distribution Plan and Shareholder Services Plan." The distribution fee
paid by Class C will cause such Class to have a higher expense ratio and
to pay lower dividends than Class A.
Class R shares may not be purchased directly by individuals,
although eligible institutions may purchase Class R shares for certain
accounts maintained by individuals. Class R shares are sold at net asset
value per share only to institutional investors acting for themselves or
in a fiduciary, advisory, agency, custodial or similar capacity for
qualified or non-qualified employee benefit plans, including pension,
profit-sharing, SEP-IRAs and other deferred compensation plans, whether
established by corporations, partnerships, non-profit entities or state
and local governments, but not including IRAs or IRA "Rollover Accounts."
Class R shares are not subject to an annual service fee or distribution
fee.
The decision as to which Class of shares is more beneficial
to you depends on the amount and the intended length of your investment.
If you are not eligible to purchase Class R shares, you should consider
whether, during the anticipated life of your investment in the Fund, the
accumulated distribution fee and CDSC, if any, on Class B or Class C
shares would be less than the initial sales charge on Class A shares
purchased at the same time, and to what extent, if any, such differential
would be offset by the return of Class A. Additionally, investors
qualifying for reduced initial sales charges who expect to maintain their
investment for an extended period of time might consider purchasing Class
A shares because the accumulated continuing distribution fees on Class B
or Class C shares may exceed the initial sales charge on Class A shares
during the life of the investment. Finally, you should consider the
effect of the CDSC period and any conversion rights of the Classes in the
context of your own investment time frame. For example, while Class C
shares have a shorter CDSC period than Class B shares, Class C shares do
not have a conversion feature and, therefore, are subject to an ongoing
distribution fee. Thus, Class A and Class B shares may be more attractive
than Class C shares to investors with longer term investment outlooks.
Generally, Class A shares may be more appropriate for investors who
invest $100,000 or more in Fund shares, but will not be appropriate for
investors who invest less than $50,000 in Fund shares.
Page 5
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is long-term capital growth,
current income and growth of income, consistent with reasonable
investment risk. It cannot be changed without approval by the holders of
a majority (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of the Fund's outstanding voting shares. There can be
no assurance that the Fund's investment objective will be achieved.
MANAGEMENT POLICIES
The Fund invests in equity and debt securities and money
market instruments of domestic and foreign issues. The proportion of the
Fund's assets invested in each type of security will vary from time to
time in accordance with The Dreyfus Corporation's assessment of economic
conditions and investment opportunities.
The equity securities in which the Fund may invest consist of
common stocks, preferred stocks and securities convertible into common
stocks, including those in the form of American Depositary Receipts. The
Fund will be particularly alert to companies which offer opportunities
for capital appreciation and growth of earnings, while paying current
dividends.
The debt securities (other than convertible debt securities)
in which the Fund may invest must be rated at least Baa by Moody's
Investors Service, Inc. ("Moody's") or at least BBB by Standard & Poor's
Ratings Group ("S&P"), Fitch Investors Service, L.P. ("Fitch") or Duff &
Phelps Credit Rating Co. ("Duff") or, if unrated, deemed to be of
comparable quality by The Dreyfus Corporation. Debt securities rated Baa
by Moody's and BBB by S&P, Fitch and Duff are considered investment grade
obligations which lack outstanding investment characteristics and may
have speculative characteristics as well. The Fund may invest up to 35%
of the value of its net assets in convertible debt securities rated not
lower than Caa by Moody's or CCC by S&P, Fitch or Duff, or, if unrated,
deemed to be of comparable quality by The Dreyfus Corporation. Securities
rated Caa by Moody's and CCC by S&P, Fitch or Duff are considered to have
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal and are considered to be of poor standing.
See "Investment Considerations and Risks _ Lower Rated Convertible Debt
Securities" below for a discussion of certain risks, and "Appendix" in
the Statement of Additional Information.
The money market instruments in which the Fund may invest
consist of U.S. Government securities, certificates of deposit, time
deposits, bankers' acceptances, short-term investment grade corporate
bonds and other short-term debt instruments, and repurchase agreements,
as set forth under "Appendix _ Certain Portfolio Securities _ Money
Market Instruments." Under normal market conditions, the Fund does not
expect to have a substantial portion of its assets invested in money
market instruments. However, when The Dreyfus Corporation determines that
adverse market conditions exist, the Fund may adopt a temporary defensive
posture and invest all of its assets in money market instruments. The
Fund also may invest in money market instruments in anticipation of
investing cash positions.
The Fund's annual portfolio turnover rate is not expected to
exceed 150%. Higher portfolio turnover rates usually generate additional
brokerage commissions and expenses and the short-term gains realized from
these transactions are taxable to shareholders as ordinary income. In
addition, the Fund may engage in various investment techniques, such as
foreign currency transactions, options and futures transactions and
short-selling. For a discussion of the investment techniques and their
related risks, see "Investment Considerations and Risks" and "Appendix --
Investment Techniques" below and "Investment Objective and Management
Policies _ Management Policies" in the Statement of Additional
Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- The Fund's net asset value per share should be expected to
fluctuate. Investors should
Page 6
consider the Fund as a supplement to an
overall investment program and should invest only if they are willing to
undertake the risks involved. See "Investment Objective and Management
Policies _ Management Policies" in the Statement of Additional
Information for a further discussion of certain risks.
EQUITY SECURITIES -- Equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the securities,
and such fluctuations can be pronounced. Changes in the value of the
Fund's investments will result in changes in the value of its shares and
thus the Fund's total return to investors.
The securities of the smaller companies in which the Fund may
invest may be subject to more abrupt or erratic market movements than
larger, more-established companies, because these securities typically
are traded in lower volume and the issuers typically are subject to a
greater degree to changes in earnings and prospects.
FIXED-INCOME SECURITIES -- Even though interest-bearing securities
are investments which promise a stable stream of income, the prices of
such securities generally are inversely affected by changes in interest
rates and, therefore, are subject to the risk of market price fluctuations
. The values of fixed-income securities also may be affected by changes in
the credit rating or financial condition of the issuer. Certain
securities purchased by the Fund, such as those rated Baa or lower by
Moody's and BBB or lower by S&P, Fitch and Duff, may be subject to risk
with respect to the issuing entity and to greater market fluctuations
than certain lower yielding, higher rated fixed-income securities. Once
the rating of a portfolio security has been changed, the Fund will
consider all circumstances deemed relevant in determining whether to
continue to hold the security. See "Lower Rated Convertible Debt
Securities" and "Appendix--Certain Portfolio Securities _ Ratings" below
and "Appendix" in the Statement of Additional Information.
LOWER RATED CONVERTIBLE DEBT SECURITIES -- The Fund may invest up to
35% of its net assets in higher yielding (and, therefore, higher risk)
convertible debt securities such as those rated Ba by Moody's or BB by
S&P, Fitch or Duff or as low as Caa by Moody's or CCC by S&P, Fitch or
Duff (commonly known as junk bonds). They generally are not meant for
short-term investing and may be subject to certain risks with respect to
the issuing entity and to greater market fluctuations than certain lower
yielding, higher rated fixed-income securities. The retail secondary
market for these convertible debt securities may be less liquid than that
of higher rated securities; adverse conditions could make it difficult at
times for the Fund to sell certain securities or could result in lower
prices than those used in calculating the Fund's net asset value.
FOREIGN SECURITIES -- Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
Because evidences of ownership of such securities usually are
held outside the United States, the Fund will be subject to additional
risks which include possible: adverse political and economic
developments, seizure or nationalization of foreign deposits and adoption
of governmental restrictions which might adversely affect the payment of
principal and interest on the foreign securities or restrict the payment
of principal and interest to investors located outside the country of the
issuer, whether from currency blockage or otherwise.
Since foreign securities often are purchased with and payable
in currencies of foreign countries, the value of these assets as measured
in U.S. dollars may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations.
USE OF DERIVATIVES -- The Fund may invest in derivatives
("Derivatives"). These are financial instruments which derive their
performance, at least in part, from the performance of an underlying
asset, index or interest rate. The Derivatives the Fund may use include
options and futures. While Derivatives can be used effectively in
furtherance of the Fund's investment objective, under certain market
conditions, they can increase the volatility of the Fund's net
Page 7
asset value, can decrease the liquidity of the Fund's portfolio and make
more difficult the accurate pricing of the Fund's portfolio.
See "Appendix _ Investment Techniques _ Use of Derivatives" below,
and "Investment Objective and Management Policies _ Management Policies _
Derivatives" in the Statement of Additional Information.
NON-DIVERSIFIED STATUS -- The classification of the Fund as a
"non-diversified" investment company means that the proportion of the
Fund's assets that may be invested in the securities of a single issuer
is not limited by the 1940 Act. A "diversified" investment company is
required by the 1940 Act generally, with respect to 75% of its total
assets, to invest not more than 5% of such assets in the securities of
a single issuer. Since a relatively high percentage of the Fund's assets
may be invested in the securities of a limited number of issuers, some of
which may be within the same industry, the Fund's portfolio may be
sensitive to changes in the market value of a single issuer or industry.
However, to meet Federal tax requirements, at the close of each quarter
the Fund may not have more than 25% of its total assets invested in any
one issuer and, with respect to 50% of total assets, not more than 5% of
its total assets invested in any one issuer. These limitations do not
apply to U.S. government securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are
made independently from those of the other investment companies advised
by The Dreyfus Corporation. If, however, such other investment companies
desire to invest in, or dispose of, the same securities as the Fund,
available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by
the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park
Avenue, New York, New York 10166, was formed in 1947 and serves as the
Fund's investment adviser. The Dreyfus Corporation is a wholly-owned
subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of
Mellon Bank Corporation ("Mellon"). As of May 31, 1996, The Dreyfus
Corporation managed or administered approximately $80 billion in assets
for more than 1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Company, subject to the authority of the Company's Board in accordance
with Maryland law. The Fund's primary portfolio manager is Richard Hoey.
He has held that position since December 1995 and has been employed by
The Dreyfus Corporation since April 1991. The Fund's other portfolio
managers are identified in the Statement of Additional Information. The
Dreyfus Corporation also provides research services for the Fund and for
other funds advised by The Dreyfus Corporation through a professional
staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the
Federal Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest
bank holding companies in the United States based on total assets.
Mellon's principal wholly-owned subsidiaries are Mellon Bank, N.A.,
Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
Company, Inc., AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $237 billion
in assets as of March 31, 1996, including approximately $83 billion in
proprietary mutual fund assets. As of March 31, 1996, Mellon, through
various subsidiaries, provided non-investment services, such as custodial
or administration services, for more than $886 billion in assets,
including approximately $61 billion in mutual fund assets.
Page 8
Under the terms of the Management Agreement, the Fund has
agreed to pay The Dreyfus Corporation a monthly fee at the annual rate of
.75 of 1% of the value of the Fund's average daily net assets. For the
period December 29, 1995 (commencement of operations) through March 31,
1996, no management fee was paid by the Fund pursuant to an undertaking
by The Dreyfus Corporation. From time to time, The Dreyfus Corporation
may waive receipt of its fees and/or voluntarily assume certain expenses
of the Fund, which would have the effect of lowering the expense ratio of
the Fund and increasing yield to investors. The Fund will not pay The
Dreyfus Corporation at a later time for any amounts it may waive, nor
will the Fund reimburse The Dreyfus Corporation for any amounts it may
assume.
In allocating brokerage transactions for the Fund, The
Dreyfus Corporation seeks to obtain the best execution of orders at the
most favorable net price. Subject to this determination, The Dreyfus
Corporation may consider, among other things, the receipt of research
services and/or the sale of shares of the Fund or other funds managed,
advised or administered by The Dreyfus Corporation as factors in the
selection of broker-dealers to execute portfolio transactions for the
Fund. See "Portfolio Transactions" in the Statement of Additional
Information.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay Service
Agents in respect of these services.
EXPENSES -- All expenses incurred in the operation of the Company are
borne by the Company, except to the extent specifically assumed by The
Dreyfus Corporation. The expenses borne by the Company include:
organizational costs, taxes, interest, loan commitment fees, interest and
distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Board members who are not officers,
directors, employees or holders of 5% or more of the outstanding voting
securities of The Dreyfus Corporation or any of its affiliates,
Securities and Exchange Commission fees, state Blue Sky qualification
fees, advisory fees, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Company's existence, costs
attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of preparing and printing
prospectuses and statements of additional information for regulatory
purposes and
for distribution to existing shareholders, costs of shareholders' reports
and meetings, and any extraordinary expenses. Expenses attributable to
the Fund are charged against the assets of the Fund; other expenses of
the Company are allocated among the Company's portfolios on the basis
determined by the Company's Board, including, but not limited to,
proportionately in relation to the net assets of each portfolio.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at 60 State Street, Boston,
Massachusetts 02109. The Distributor's ultimate parent is Boston
Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus Corporation,
P.O.Box 9671, Providence, Rhode Island 02940-9671, is the Fund's Transfer
and Dividend Disbursing Agent (the "Transfer Agent"). Mellon Bank, N.A.,
One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, serves as the
Fund's Custodian.
HOW TO BUY SHARES
GENERAL -- Class A shares, Class B shares and Class C shares may be
purchased only by clients of certain financial institutions (which may
include banks), securities dealers ("Selected Dealers") and other
industry professionals (collectively, "Service Agents"), except that
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members
of the Company's Board, or the spouse or minor child of any
Page 9
of the foregoing may purchase Class A shares directly through the
Distributor. Subsequent purchases may be sent directly to the Transfer
Agent or your Service Agent.
Class R shares are offered only to institutional investors
acting for themselves or in a fiduciary, advisory, agency, custodial or
similar capacity for qualified or non-qualified employee benefit plans,
including pension, profit-sharing, SEP-IRAs and other deferred
compensation plans, whether established by corporations, partnerships,
non-profit entities or state and local governments ("Retirement Plans").
The term "Retirement Plans" does not include IRAs or IRA "Rollover
Accounts." Class R shares may be purchased for a Retirement Plan only by
a custodian, trustee, investment manager or other entity authorized to
act on behalf of such Plan. Institutions effecting transactions in Class
R shares for the accounts of their clients may charge their clients
direct fees in connection with such transactions.
When purchasing Fund shares, you must specify which Class is
being purchased. Stock certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
Service Agents may receive different levels of compensation
for selling different Classes of shares. Management understands that
some Service Agents may impose certain conditions on their clients which
are different from those described in this Prospectus, and, to the extent
permitted by applicable regulatory authority, may charge their clients
direct fees which would be in addition to any amounts which might be
received under the Distribution Plan or Shareholder Services Plan. You
should consult your Service Agent in this regard.
The minimum initial investment is $1,000. Subsequent
investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and
403(b)(7) Plans with only one participant is $750, with no minimum for
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum initial investment of $250.
Subsequent investments in a spousal IRA must be at least $250. The initial
investment must be accompanied by the Account Application. The Fund
reserves the right to offer Fund shares without regard to minimum
purchase requirements to employees participating in certain qualified or
non-qualified employee benefit plans or other programs where
contributions or account information can be transmitted in a manner and
form acceptable to the Fund. The Fund reserves the right to vary further
the initial and subsequent investment minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code")
imposes various limitations on the amount that may be contributed to
certain Retirement Plans. These limitations apply with respect to
participants at the plan level and, therefore, do not directly affect the
amount that may be invested in the Fund by a Retirement Plan.
Participants and plan sponsors should consult their tax advisers for
details.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"Dreyfus Family of Funds," or, if for Dreyfus retirement plan accounts,
to "The Dreyfus Trust Company, Custodian." Payments which are mailed
should be sent to Premier Growth and Income Fund, P.O. Box 6587,
Providence, Rhode Island 02940-6587. If you are opening a new account,
please enclose your Account Application indicating which Class of shares
is being purchased. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be enclosed. For
Dreyfus retirement plan accounts, payments which are mailed should be
sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Neither initial nor subsequent investments
should be made by third party check.
Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or any
other bank having a correspondent bank in New York City. Immediately
available funds may be transmitted by wire to The Bank of New York,
together with the Fund's DDA # 8900276320/Premier Growth and Income Fund.
Page 10
The wire must indicate the class of shares being purchased
and must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Account Application and promptly
mail the Account Application to the Fund, as no redemptions will be
permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if
any check used for investment in your account does not clear. The Fund
makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC
Asset BuilderRegistration Mark and the Government Direct Deposit
Privilege described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit
and will not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other domestic
financial institution that is an Automated Clearing House member. You
must direct the institution to transmit immediately available funds
through the Automated Clearing House to The Bank of New York with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and Fund account number PRECEDED BY THE
DIGITS "1111."
Fund shares are sold on a continuous basis. Net asset value
per share is determined as of the close of trading on the floor of the
New York Stock Exchange (currently 4:00 p.m., New York time), on each day
the New York Stock Exchange is open for business. For purposes of
determining net asset value, options and futures contracts will be valued
15 minutes after the close of trading on the floor of the New York Stock
Exchange. Net asset value per share of each Class is computed by
dividing the value of the Fund's net assets represented by such Class
(i.e., the value of its assets less liabilities) by the total number of
shares of such Class outstanding. The Fund's investments are valued based
on market value or, where market quotations are not readily available,
based on fair value as determined in good faith by the Company's Board.
For further information regarding the methods employed in valuing the
Fund's investments, see "Determination of Net Asset Value" in the
Statement of Additional Information.
If an order is received in proper form by the Transfer Agent
or other agent by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time) on a business day, Fund
shares will be purchased at the public offering price determined as of
the close of trading on the floor of the New York Stock Exchange on that
day. Otherwise, Fund shares will be purchased at the public offering
price determined as of the close of trading on the floor of the New York
Stock Exchange on the next business day, except where shares are
purchased through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by
the close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor or its designee by the
close of its business day (normally 5:15 p.m., New York time) will be
based on the public offering price per share determined as of the close
of trading on the floor of the New York Stock Exchange on that day.
Otherwise, the orders will be based on the next determined public
offering price. It is the dealer's responsibility to transmit orders so
that they will be received by the Distributor or its designee before the
close of its business day. For certain institutions that have entered
into agreements with the Distributor, payment for the purchase of Fund
shares may be transmitted, and must be received by the Transfer Agent,
within
Page 11
three business days after the order is placed. If such payment is
not received within three business days after the order is placed, the
order may be canceled and the institution could be held liable for
resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the
amount invested through such dealers in Fund shares by employees
participating in qualified or non-qualified employee benefit plans or
other programs where (i) the employers or affiliated employers
maintaining such plans or programs have a minimum of 250 employees
eligible for participation in such plans or programs or (ii) such plan's
or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Shares of funds
in the Dreyfus Family of Funds then held by Eligible Benefit Plans will
be aggregated to determine the fee payable. The Distributor reserves the
right to cease paying these fees at any time. The Distributor will pay
such fees from its own funds, other than amounts received from the Fund,
including past profits or any other source available to it.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Fund could
subject you to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").
CLASS A SHARES -- The public offering price of Class A shares is the
net asset value per share of that Class plus, except for shareholders
beneficially owning Fund shares on November 30, 1996, a sales load as
shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
------------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
---------------------------- ---------------- ----------------- --------------------
<S> <C> <C> <C>
Less than $50,000 5.75 6.10 5.00
$50,000 to less than $100,000 4.50 4.70 3.75
$100,000 to less than $250,000 3.50 3.60 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more -0- -0- -0-
A CDSC of 1% will be assessed at the time of redemption of
Class A shares purchased without an initial sales
charge as part of an investment of at least $1,000,000 and redeemed
within one year of purchase. The terms contained in the section of the
Fund's Prospectus entitled "How to Redeem Shares _ Contingent Deferred
Sales Charge" (other than the amount of the CDSC and time periods) are
applicable to the Class A shares subject to a CDSC. Letter of Intent and
Right of Accumulation apply to such purchases of Class A shares.
For shareholders beneficially owning Class A shares on
November 30, 1996, the public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
TOTAL SALES LOAD
------------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
---------------------------- ---------------- ---------------- --------------------
Less than $50,000 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more -0- -0- -0-
</TABLE>
Page 12
Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into an
agreement with the Distributor pertaining to the sale of Fund shares (or
which otherwise have a brokerage related or clearing arrangement with an
NASD member firm or financial institution with respect to the sale of such
shares) may purchase Class A shares for themselves directly or pursuant to
an employee benefit plan or other program, or for their spouses or minor
children, at net asset value, provided that they have furnished the
Distributor with such information as it may request from time to time in
order to verify eligibility for this privilege. This privilege also applies
to full-time employees of financial institutions affiliated with NASD member
firms whose full-time employees are eligible to purchase Class A shares at
net asset value. In addition, Class A shares are offered at net asset value
to full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
the Company's Board, or the spouse or minor child of any of the foregoing.
Class A shares are offered at net asset value without a sales
load to employees participating in Eligible Benefit Plans. Class A shares
also may be purchased (including by exchange) at net asset value without
a sales load for Dreyfus-sponsored IRA "Rollover Accounts" with the
distribution proceeds from a qualified retirement plan or a
Dreyfus-sponsored 403(b)(7) plan, provided that, at the time of such
distribution, such qualified retirement plan or Dreyfus-sponsored
403(b)(7) plan (a) met the requirements of an Eligible Benefit Plan and
all or a portion of such plan's assets were invested in funds in the
Premier Family of Funds or the Dreyfus Family of Funds or certain other
products made available by the Distributor to such plans, or (b) invested
all of its assets in certain funds in the Premier Family of Funds or the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans.
Class A shares may be purchased at net asset value through
certain broker-dealers and other financial institutions which have
entered into an agreement with the Distributor, which includes a
requirement that such shares be sold for the benefit of clients
participating in a "wrap account" or a similar program under which such
clients pay a fee to such broker-dealer or other financial institution.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, through a broker-dealer or other
financial institution with the proceeds from the redemption of shares of
a registered open-end management investment company not managed by The
Dreyfus Corporation or its affiliates. The purchase of Class A shares of
the Fund must be made within 60 days of such redemption and the
shareholder must have either (i) paid an initial sales charge or a
contingent deferred sales charge or (ii) been obligated to pay at any
time during the holding period, but did not actually pay on redemption, a
deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, by (i) qualified separate accounts
maintained by an insurance company pursuant to the laws of any State or
territory of the United States, (ii) a State, county or city or
instrumentality thereof, (iii) a charitable organization (as defined in
Section 501(c)(3) of the Code) investing $50,000 or more in Fund shares,
and (iv) a charitable remainder trust (as defined in Section 501(c)(3) of
the Code).
The dealer reallowance may be changed from time to time but
will remain the same for all dealers. The Distributor, at its expense,
may provide additional promotional incentives to dealers that sell shares
of funds advised by The Dreyfus Corporation which are sold with a sales
load, such as Class A shares. In some instances, those incentives may be
offered only to certain dealers who have sold or may sell significant
amounts of shares. Dealers receive a larger percentage of the sales load
from the Distributor than they receive for selling most other funds.
CLASS B SHARES -- The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed,
Page 13
however, on certain redemptions of Class B shares as described under "How to
Redeem Shares." The Distributor compensates certain Service Agents for
selling Class B and Class C shares at the time of purchase from the
Distributor's own assets. The proceeds of the CDSC and the distribution fee,
in part, are used to defray these expenses.
CLASS C SHARES -- The public offering price for Class C shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on
redemptions of Class C shares made within the first year of purchase. See
"Class B Shares" above and "How to Redeem Shares."
CLASS R SHARES -- The public offering for Class R shares is the net
asset value per share of that Class.
RIGHT OF ACCUMULATION -- CLASS A SHARES -- Reduced sales loads apply
to any purchase of Class A shares, shares of other funds in the Premier
Family of Funds, shares of certain other funds advised by The Dreyfus
Corporation which are sold with a sales load and shares acquired by a
previous exchange of such shares (hereinafter referred to as "Eligible
Funds"), by you and any related "purchaser" as defined in the Statement
of Additional Information, where the aggregate investment, including such
purchase, is $50,000 or more. If, for example, you previously purchased
and still hold Class A shares, or shares of any other Eligible Fund or
combination thereof, with an aggregate current market value of $40,000
and subsequently purchase Class A shares or shares of an Eligible Fund
having a current value of $20,000, the sales load applicable to the
subsequent purchase would be reduced to 4.5% of the offering price. All
present holdings of Eligible Funds may be combined to determine the
current offering price of the aggregate investment in ascertaining the
sales load applicable to each subsequent purchase. Class A shares
purchased by shareholders beneficially owning Fund shares on November 30,
1996 are subject to a different sales load schedule, as described above
under "Class A Shares."
To qualify for reduced sales loads, at the time of purchase
you or your Service Agent must notify the Distributor if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE -- You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may modify
or terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of shares by telephoning 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may
not be available to clients of certain Service Agents and some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus. You should consult your Service
Agent in this regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, shares
of the same Class of certain other funds managed or administered by The
Dreyfus Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment objectives
which may be of interest to you. You also may exchange your Fund shares
that are subject to a CDSC for shares of Dreyfus Worldwide Dollar Money
Market Fund, Inc. The shares so purchased will be held in a special
account created solely for this purpose ("Exchange Account").
Page 14
Exchanges of shares from an Exchange Account only can be made into certain
other funds managed or administered by The Dreyfus Corporation. No CDSC is
charged when an investor exchanges into an Exchange Account; however, the
applicable CDSC will be imposed when shares are redeemed from an Exchange
Account or other applicable Fund account. Upon redemption, the applicable
CDSC will be calculated without regard to the time such shares were held
in an Exchange Account. See "How to Redeem Shares." Redemption proceeds
for Exchange Account shares are paid by Federal wire or check only.
Exchange Account shares also are eligible for the Auto-Exchange
Privilege, Dividend Sweep and the Automatic Withdrawal Plan. To use this
service, you should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are imposed on
its use. WITH RESPECT TO CLASS R SHARES HELD BY RETIREMENT PLANS,
EXCHANGES MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN
ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN
ANOTHER FUND.
To request an exchange, your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing
or by telephone. Before any exchange, you must obtain and should review a
copy of the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained by calling 1-800-645-6561.
Except in the case of personal retirement plans, the shares being
exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must
have a value of at least the minimum initial investment required for the
fund into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this Privilege. The Telephone
Exchange Privilege may be established for an existing account by written
request, signed by all shareholders on the account, or by a separate
signed Shareholder Services Form, also available by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege,
you may telephone exchange instructions by calling 1-800-645-6561 or, if
you are calling from overseas, call 516-794-5452. See "How to Redeem
Shares _ Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where available,
will be automatically carried over to the fund into which the exchange is
made: Telephone Exchange Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, TELETRANSFER Privilege and the dividend/capital
gain distribution option (except for Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to exchanges of
Class A shares into funds sold with a sales load. No CDSC will be
imposed on Class B or Class C shares at the time of an exchange; however,
Class B or Class C shares acquired through an exchange will be subject to
the higher CDSC applicable to the exchanged or acquired shares. The CDSC
applicable on redemption of the acquired Class B or Class C shares will
be calculated from the date of the initial purchase of the Class B or
Class C shares exchanged, as the case may be. If you are exchanging
Class A shares into a fund that charges a sales load, you may qualify for
share prices which do not include the sales load or which reflect a
reduced sales load, if the shares you are exchanging were: (a) purchased
with a sales load, (b) acquired by a previous exchange from shares
purchased with a sales load, or (c) acquired through reinvestment of
dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange your Service Agent
must notify the Distributor. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional Information. No
fees currently are charged shareholders directly in connection with
exchanges, although the Fund reserves the right, upon not less than 60
days' written notice, to charge shareholders a nominal fee in accordance
with rules promulgated by the Securities and Exchange Commission. The
Fund reserves the right to reject any exchange
Page 15
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares
of the Fund, in shares of the same Class of other funds in the Premier
Family of Funds or certain other funds in the Dreyfus Family of Funds of
which you are a shareholder. WITH RESPECT TO CLASS R SHARES HELD BY
RETIREMENT PLANS, EXCHANGES PURSUANT TO THE AUTO-EXCHANGE PRIVILEGE MAY
BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND
AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth day of the month according to
the schedule you have selected. Shares will be exchanged at the
then-current net asset value; however, a sales load may be charged with
respect to exchanges of Class A shares into funds sold with a sales load.
No CDSC will be imposed on Class B or Class C shares at the time of an
exchange; however, Class B or Class C shares acquired through an exchange
will be subject to the higher CDSC applicable to the exchanged or
acquired shares. The CDSC applicable on redemption of the acquired Class
B or Class C shares will be calculated from the date of the initial
purchase of the Class B or Class C shares exchanged, as the case may be.
See "Shareholder Services" in the Statement of Additional Information.
The right to exercise this Privilege may be modified or canceled by the
Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to Premier
Growth and Income Fund, Inc., P.O. Box 6587, Providence, Rhode Island
02940-6587. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. For more information
concerning this Privilege and the funds in the Premier Family of Funds or
the Dreyfus Family of Funds eligible to participate in this Privilege, or
to obtain an Auto-Exchange Authorization Form, please call toll free
1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS -- AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction) at
regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both days. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC-Asset Builder account, you must file an authorization
form with the Transfer Agent. You may obtain the necessary authorization
form by calling 1-800-645-6561. You may cancel your participation in this
Privilege or change the amount of purchase at any time by mailing written
notification to Premier Growth and Income Fund, P.O. Box 6587,
Providence, Rhode Island 02940-6587, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427, and the notification will be
effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such
fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into
your Fund account. You may deposit as much of such payments as you elect.
To enroll in Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment
that you desire to include in this Privilege. The appropriate form may be
obtained by calling 1-800-645-6561. Death or legal
Page 16
incapacity will terminate your participation in this Privilege. You may
elect at any time to terminate your participation by notifying in writing
the appropriate Federal agency. The Fund may terminate your participation
upon 30 days' notice to you.
DIVIDEND OPTIONS
Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of the same Class of another fund in the Premier Family of Funds
or the Dreyfus Family of Funds of which you are a shareholder. Shares of
the other fund will be purchased at the then-current net asset value;
however, a sales load may be charged with respect to investments in
shares of a fund sold with a sales load. If you are investing in a fund
that charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load. If you are
investing in a fund or class that charges a CDSC, the shares purchased
will be subject on redemption to the CDSC, if any, applicable to the
purchased shares. See "Shareholder Services" in the Statement of
Additional Information. Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if
any, from the Fund to a designated bank account. Only an account
maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may charge a fee for
this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call toll free 1-800-645-6561.
You may cancel these privileges by mailing written notification to
Premier Growth and Income, Inc., P.O. Box 6587, Providence, Rhode Island
02940-6587. To select a new fund after cancellation, you must submit a
new Dividend Options Form. Enrollment in or cancellation of these
privileges is effective three business days following receipt. These
privileges are available only for existing accounts and may not be used
to open new accounts. Minimum subsequent investments do not apply for
Dividend Sweep. The Fund may modify or terminate these privileges at any
time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for Dividend Sweep.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus sponsored retirement
plans, may permit certain participants to establish an automatic
withdrawal plan from such Retirement Plans. Participants should consult
their Retirement Plan sponsor and tax adviser for details. Such a
withdrawal plan is different than the Automatic Withdrawal Plan. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which certificates have
been issued may not be redeemed through the Automatic Withdrawal Plan.
No CDSC with respect to Class B shares will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the
amounts withdrawn under the plan do not exceed on an annual basis 12% of
the account value at the time the shareholder elects to participate in
the Automatic Withdrawal Plan. Withdrawals with respect to Class B shares
under the Automatic Withdrawal Plan that exceed on an annual basis 12% of
the value of the shareholder's account will be subject to a CDSC on the
amounts exceeding 12% of the initial account value. Class C shares
withdrawn pursuant to the Automatic Withdrawal Plan will be subject to
any applicable CDSC. Purchases of additional Class A shares where the
sales load is imposed concurrently with withdrawals of Class A shares
generally are undesirable.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services
also are available. You can obtain details on the various plans by
Page 17
calling the following numbers toll free: for Keogh Plans, please call
1-800-358-5566; for IRAs and IRA "Rollover Accounts," please call
1-800-645-6561; or for SEP-IRAs, 401(k) Salary Reduction Plans and
403(b)(7) Plans, please call 1-800-322-7880.
LETTER OF INTENT -- CLASS A SHARES
By signing a Letter of Intent form, which can be obtained by
calling 1-800-645-6561, you become eligible for the reduced sales load
applicable to the total number of Eligible Fund shares purchased in a
13-month period pursuant to the terms and conditions set forth in the
Letter of Intent. A minimum initial purchase of $5,000 is required. To
compute the applicable sales load, the offering price of shares you hold
(on the date of submission of the Letter of Intent) in any Eligible Fund
that may be used toward "Right of Accumulation" benefits described above
may be used as a credit toward completion of the Letter of Intent.
However, the reduced sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent.
The escrow will be released when you fulfill the terms of the Letter of
Intent by purchasing the specified amount. If your purchases qualify for
a further sales load reduction, the sales load will be adjusted to
reflect your total purchase at the end of 13 months. If total purchases
are less than the amount specified, you will be requested to remit an
amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If
such remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will
redeem an appropriate number of Class A shares of the Fund held in escrow
to realize the difference. Signing a Letter of Intent does not bind you
to purchase, or the Fund to sell, the full amount indicated at the sales
load in effect at the time of signing, but you must complete the intended
purchase to obtain the reduced sales load. At the time you purchase Class
A shares, you must indicate your intention to do so under a Letter of
Intent.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund
will redeem the shares at the next determined net asset value as
described below. If you hold Fund shares of more than one Class, any
request for redemption must specify the Class of shares being redeemed.
If you fail to specify the Class of shares to be redeemed or if you own
fewer shares of the Class than specified to be redeemed, the redemption
request may be delayed until the Transfer Agent receives further
instructions from you or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC)
when shares are redeemed. Service Agents or other institutions may charge
their clients a nominal fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted
with the redemption request. The value of the shares redeemed may be more
or less than their original cost, depending upon the Fund's then-current
net asset value.
Distributions from qualified Retirement Plans, IRAs
(including IRA "Rollover Accounts") and certain non-qualified deferred
compensation plans, except distributions representing returns of
non-deductible contributions to the Retirement Plan or IRA, generally are
taxable income to the participant. Distributions from such a Retirement
Plan or IRA to a participant prior to the time the participant reaches
age 591/2 or becomes permanently disabled may subject the participant to
an additional 10% penalty tax imposed by the IRS. Participants should
consult their tax advisers concerning the timing and consequences of
distributions from a Retirement Plan or IRA. Participants in qualified
Retirement Plans will receive a disclosure statement describing the
consequences of a distribution from such a Plan from the administrator,
Page 18
trustee or custodian of the Plan, before receiving the distribution. The
Fund will not report to the IRS redemptions of Fund shares by qualified
Retirement Plans, IRAs or certain non-qualified deferred compensation
plans. The administrator, trustee or custodian of such Retirement Plans
and IRAs will be responsible for reporting distributions from such Plans
and IRAs to the IRS.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption
request in proper form, except as provided by the rules of the Securities
and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE
TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER
PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO
EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS
TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE TELETRANSFER
PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED
BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE
IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY
REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE
PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL
OWNERSHIP. Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 45 days' written notice if your account's net
asset value is $500 or less and remains so during the notice period.
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES -- A CDSC payable to the Distributor is imposed on any
redemption of Class B shares which reduces the current net asset value of
your Class B shares to an amount which is lower than the dollar amount of
all payments by you for the purchase of Class B shares of the Fund held
by you at the time of redemption. No CDSC will be imposed to the extent
that the net asset value of the Class B shares redeemed does not exceed
(i) the current net asset value of Class B shares acquired through
reinvestment of dividends or capital gain distributions, plus (ii)
increases in the net asset value of your Class B shares above the dollar
amount of all your payments for the purchase of Class B shares held by
you at the time of redemption.
If the aggregate value of Class B shares redeemed has
declined below their original cost as a result of the Fund's performance,
a CDSC may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
YEAR SINCE PURCHASE CDSC AS A % OF AMOUNT
PAYMENT WAS MADE INVESTED OR REDEMPTION PROCEEDS
------------------------- ---------------------------------
First............................ 4.00
Second........................... 4.00
Third............................ 3.00
Fourth........................... 3.00
Fifth............................ 2.00
Sixth............................ 1.00
Page 19
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest possible
rate. It will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends and
distributions; then of amounts representing the increase in net asset value
of Class B shares above the total amount of payments for the purchase of
Class B shares made during the preceding six years; then of amounts
representing the cost of shares purchased six years prior to the redemption;
and finally, of amounts representing the cost of shares held for the longest
period of time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10
share for a cost of $1,000. Subsequently, the shareholder acquired five
additional shares through dividend reinvestment. During the second year
after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the net asset value
had appreciated to $12 per share, the value of the investor's shares
would be $1,260 (105 shares at $12 per share). The CDSC would not be
applied to the value of the reinvested dividend shares and the amount
which represents appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate of 4%
(the applicable rate in the second year after purchase) for a total CDSC
of $9.60.
CLASS C SHARES -- A CDSC of 1% payable to the Distributor is imposed
on any redemption of Class C shares within one year of the date of
purchase. The basis for calculating the payment of any such CDSC will be
the method used in calculating the CDSC for Class B shares. See
"Contingent Deferred Sales Charge _ Class B Shares" above.
WAIVER OF CDSC -- The CDSC applicable to Class B and Class C shares
may be waived in connection with (a) redemptions made within one year
after the death or disability, as defined in Section 72(m)(7) of the
Code, of the shareholder, (b) redemptions by employees participating in
Eligible Benefit Plans, (c) redemptions as a result of a combination of
any investment company with the Fund by merger, acquisition of assets or
otherwise and (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 701\2 in the case of
an IRA or Keogh plan or custodial account pursuant to Section 403(b) of
the Code, and (e) redemptions made pursuant to the Automatic Withdrawal
Plan as described in the Fund's Prospectus. If the Company's Board
determines to discontinue the waiver of the CDSC, the disclosure in the
Fund's Prospectus will be revised appropriately. Any Fund shares subject
to a CDSC which were purchased prior to the termination of such waiver
will have the CDSC waived as provided in the Fund's Prospectus at the
time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of
redemption you must notify the Transfer Agent or your Service Agent must
notify the Distributor. Any such qualification is subject to confirmation
of your entitlement.
PROCEDURES
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent, through the Wire Redemption Privilege, the Telephone Redemption
Privilege or the TELETRANSFER Privilege. If you are a client of a
Selected Dealer, you may redeem shares through the Selected Dealer. If
you have given your Service Agent authority to instruct the Transfer
Agent to redeem shares and to credit the proceeds of such redemptions to
a designated account at your Service Agent, you may redeem shares only in
this manner and in accordance with the regular redemption procedure
described below. If you wish to use the other redemption methods
described below, you must arrange with your Service Agent for delivery of
the required application(s) to the Transfer Agent. Other redemption
procedures may be in effect for clients of certain Service Agents or
institutions. The Fund makes available to certain large institutions the
ability to issue redemption instructions through compatible
Page 20
computer facilities. The Fund reserves the right to refuse any request
made by wire or telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
The Fund may modify or terminate any redemption Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently
is contemplated. Shares held under Keogh Plans, IRAs or other retirement
plans, and shares for which certificates have been issued, are not
eligible for the Wire Redemption, Telephone Redemption or TELETRANSFER
Privilege.
You may redeem shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone
redemption privilege or telephone exchange privilege (which is granted
automatically unless you refuse it), you authorize the Transfer Agent to
act on telephone instructions from any person representing himself or
herself to be you, or a representative of your Service Agent, and
reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions
are genuine and, if it does not follow such procedures, the Fund or the
Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market conditions, you
may experience difficulty in contacting the Transfer Agent by telephone
to request a redemption or exchange of Fund shares. In such cases, you
should consider using the other redemption procedures described herein.
Use of these other redemption procedures may result in your redemption
request being processed at a later time than it would have been if
telephone redemption had been used. During the delay, the Fund's net
asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may
redeem shares by written request mailed to Premier Growth and Income
Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587, or, if for
Dreyfus retirement plan accounts, to The Dreyfus Trust Company, Custodian,
P.O. Box 6427, Providence, Rhode Island 02940-6427. Redemption requests must
be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers,
credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature Program,
the Securities Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please contact your Service Agent or call the
telephone number listed on the cover of this Prospectus.
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to your account at a
bank which is a member of the Federal Reserve System, or a correspondent
bank if your bank is not a member. You also may direct that redemption
proceeds be paid by check (maximum $150,000 per day) made out to the
owners of record and mailed to your address. Redemption proceeds of less
than $1,000 will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of not more
than $250,000 wired within any 30-day period. You may telephone
redemption requests by calling 1-800-645-6561 or, if you are calling from
overseas, call 516-794-5452. The Statement of Additional Information sets
forth instructions for transmitting redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and
mailed to your address. You may
Page 21
telephone redemption instructions by
calling 1-800-645-6561 or, if you are calling from overseas, call
516-794-5452.
TELETRANSFER PRIVILEGE -- You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your
Fund account and your bank account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House
member may be designated. Redemption proceeds will be on deposit in your
account at an Automated Clearing House member bank ordinarily two days
after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the
TELETRANSFER Privilege for transfer to their bank account not more than
$250,000 within any 30-day period.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER redemption of shares by telephoning 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that
it is received by the Transfer Agent prior to the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), the redemption request will be effective on that day. If a
redemption request is received by the Transfer Agent after the close of
trading on the floor of the New York Stock Exchange, the redemption
request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited
to your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
In addition, the Distributor or its designee will accept
orders from Selected Dealers with which the Distributor has sales
agreements for the repurchase of shares held by shareholders. Repurchase
orders received by dealers by the close of trading on the floor of the
New York Stock Exchange on any business day and transmitted to the
Distributor or its designee prior to the close of its business day
(normally 5:15 p.m., New York time) are effected at the price determined
as of the close of trading on the floor of the New York Stock Exchange on
that day. Otherwise, the shares will be redeemed at the next determined
net asset value. It is the responsibility of the Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE -- You may reinvest up to the number
of Class A or Class B shares you have redeemed, within 45 days of
redemption, at the then-prevailing net asset value without a sales load,
or reinstate your account for the purpose of exercising the Exchange
Privilege. Upon reinvestment, with respect to Class B, or if the Class A
shares were subject to a CDSC, the shareholder's account will be credited
with an amount equal to the CDSC previously paid upon redemption of the
Class A or Class B shares reinvested. The Reinvestment Privilege may be
exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
(CLASS A, CLASS B AND CLASS C ONLY)
Class B and Class C shares are subject to a Distribution Plan
and Class A, Class B and Class C shares are subject to a Shareholder
Services Plan.
DISTRIBUTION PLAN -- Under the Distribution Plan, adopted pursuant to
Rule 12b-1 under the 1940 Act, the Fund pays the Distributor for
distributing the Fund's Class B and Class C shares at an annual rate of
.75 of 1% of the value of the average daily net assets of Class B and
Class C.
SHAREHOLDER SERVICES PLAN -- Under the Shareholder Services Plan, the
Fund pays the Distributor for the provision of certain services to the
holders of Class A, Class B and Class C shares a fee at the annual rate
of .25 of 1% of the value of the average daily net assets of each
Page 22
such Class. 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. The Distributor may
make payments to Service Agents in respect of these services. The
Distributor determines the amounts to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Under the Code, the Fund is treated as a separate entity for
purposes of qualification and taxation as a regulated investment company.
The Fund ordinarily declares and pays dividends from its net investment
income quarterly, and distributes net realized securities gains, if any,
once a year, but it may make distributions on a more frequent basis to
comply with the distribution requirements of the Code, in all events in a
manner consistent with the provisions of the 1940 Act. The Fund will not
make distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive dividends and distributions in cash or to reinvest in
additional shares at net asset value. Dividends and distributions paid in
cash to Retirement Plans, however, may be subject to additional tax as
described below. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will
be calculated at the same time and in the same manner and will be of the
same amount, except that the expenses attributable solely to a particular
Class will be borne exclusively by such Class. Class B and C shares will
receive lower per share dividends than Class A shares which will receive
lower per share dividends than Class R shares because of the higher
expenses borne by the relevant Class. See "Fee Table."
Dividends paid by the Fund to qualified Retirement Plans,
IRAs (including IRA "Rollover Accounts") or certain non-qualified
deferred compensation plans ordinarily will not be subject to taxation
until the proceeds are distributed from the Retirement Plan or IRA. The
Fund will not report dividends paid to such Plans and IRAs to the IRS.
Generally, distributions from such Retirement Plans and IRAs, except
those representing returns of non-deductible contributions thereto, will
be taxable as ordinary income and, if made prior to the time the
participant reaches age 591/2, generally will be subject to an additional
tax equal to 10% of the taxable portion of the distribution. If the
distribution from such a Retirement Plan (other than certain governmental
or church plans) or IRA for any taxable year following the year in which
the participant reaches age 701/2 is less than the "minimum required
distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed by the IRS. The administrator, trustee or
custodian of such a Retirement Plan or IRA will be responsible for
reporting distributions from such Plans and IRAs to the IRS. Participants
in qualified Retirement Plans will receive a disclosure statement
describing the consequences of a distribution from such a Plan from the
administrator, trustee or custodian of the Plan prior to receiving the
distribution. Moreover, certain contributions to a qualified Retirement
Plan or IRA in excess of the amounts permitted by law may be subject to
an excise tax.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund will be taxable to U.S.
shareholders and to certain non-qualified Retirement Plans as ordinary
income whether received in cash or reinvested in additional shares.
Distributions from net realized long-term securities gains of the Fund
will be taxable to U.S. shareholders and to certain non-qualified
Retirement Plans as long-term capital gains for Federal income tax
purposes, regardless of how long shareholders have held their Fund shares
and whether such distributions are received in cash or reinvested in Fund
shares. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess
of 28%. Dividends and distributions may be subject to state and local
taxes.
Page 23
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate
of 30%, unless the foreign investor claims the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term
securities gains paid by the Fund to a foreign investor as well as the
proceeds of any redemptions from a foreign investor's account, regardless
of the extent to which gain or loss may be realized, generally will not
be subject to U.S. nonresident withholding tax. However, such distributions
may be subject to backup withholding, as described below, unless the
foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will receive
periodic summaries of your account which will include information as to
dividends and distributions from securities gains, if any, paid during
the year. Participants in a Retirement Plan or IRA should receive
periodic statements from the trustee, custodian or administrator of their
Plan.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares if an investor exchanges such shares
for shares of another fund advised or administered by The Dreyfus
Corporation within 91 days of purchase and such other fund reduces or
eliminates its otherwise applicable sales load for the purpose of the
exchange. In this case, the amount of the sales load charged the investor
for such shares, up to the amount of the reduction of the sales load
charge on the exchange, is not included in the basis of such shares for
purposes of computing gain or loss on the exchange, and instead is added
to the basis of the fund shares received on the exchange.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize, or an exchange on behalf of a Retirement Plan which is not tax
exempt may result in, a taxable gain or loss.
With respect to individual investors and certain
non-qualified Retirement Plans, Federal regulations generally require the
Fund to withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends, distributions from net realized securities gains and
the proceeds of any redemption, regardless of the extent to which gain or
loss may be realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with opening an
account is correct or that such shareholder has not received notice from
the IRS of being subject to backup withholding as a result of a failure
to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect
or if a shareholder has failed to properly report taxable dividend and
interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account, and may be
claimed as a credit on the record owner's Federal income tax return.
It is expected that the Fund will qualify as a "regulated
investment company" under the Code so long as such qualification is in
the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings
are distributed in accordance with applicable provisions of the Code. The
Fund is subject to a non-deductible 4% excise tax, measured with respect
to certain undistributed amounts of taxable investment income and capital
gains.
You should consult your tax adviser regarding specific
questions as to Federal, state or local taxes.
Page 24
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may
be calculated on the basis of average annual total return and/or total
return. These total return figures reflect changes in the price of the
shares and assume that any income dividends and/or capital gains
distributions made by the Fund during the measuring period were
reinvested in shares of the same Class. These figures also take into
account any applicable service and distribution fees. As a result, at any
given time, the performance of Class B and Class C should be expected to
be lower than that of Class A and the performance of Class A, Class B and
Class C should be expected to be lower than that of Class R. Performance
for each Class will be calculated separately.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment was purchased with
an initial payment of $1,000 and that the investment was redeemed at the
end of a stated period of time, after giving effect to the reinvestment
of dividends and distributions during the period. The return is expressed
as a percentage rate which, if applied on a compounded annual basis,
would result in the redeemable value of the investment at the end of the
period. Advertisements of the Fund's performance will include the Fund's
average annual total return for one, five and ten year periods, or for
shorter periods depending upon the length of time during which the Fund
has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
net asset value (or maximum offering price in the case of Class A shares)
per share at the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return. Total return also may
be calculated by using the net asset value per share at the beginning of
the period instead of the maximum offering price per share at the
beginning of the period for Class A shares or without giving effect to any
applicable CDSC at the end of the period for Class B or Class C shares.
Calculations based on the net asset value per share do not reflect
the deduction of the sales load on the Fund's Class A shares, which,
if reflected, would reduce the performance quoted.
Performance will vary from time to time and past results are
not necessarily representative of future results. You should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including data from
Lipper Analytical Services, Inc., Standard & Poor's 500 Stock Index,
Standard & Poor's MidCap 400 Index, Wilshire 5000 Index, the Dow Jones
Industrial Average, Money Magazine, Morningstar, Inc. and other industry
publications.
GENERAL INFORMATION
The Company was originally incorporated under Delaware law in
November 1968 and became a Maryland corporation on April 30, 1974. Before
January 2, 1996, the Company's name was Premier Capital Growth Fund, Inc.
and before February 1993 it was The Dreyfus Leverage Fund, Inc. The
Company is authorized to issue 800 million shares of Common Stock (with
200 million shares allocated to the Fund), par value $1.00 per share. The
Fund's shares are classified into four classes _ Class A, Class B, Class
C and Class R. Each share has one vote and shareholders will vote in the
aggregate and not by class except as otherwise required by law. However,
only holders of Class B or Class C shares, as the case may be, will be
entitled to vote on matters submitted to shareholders pertaining to its
Distribution Plan.
Page 25
The Company is a "series fund," which is a mutual fund
divided into separate portfolios, each of which is treated as a separate
entity for certain matters under the 1940 Act and for other purposes. A
shareholder of one portfolio is not deemed to be a shareholder of any
other portfolio. For certain matters shareholders vote together as a
group; as to others they vote separately by portfolio. By this
Prospectus, shares of the Fund are being offered. Other portfolios are
sold pursuant to other offering documents.
To date, the Board has authorized the creation of three
series of shares. All consideration received by the Company for shares of
one of the series and all assets in which such consideration is invested
will belong to that series (subject only to the rights of creditors of
the Company) and will be subject to the liabilities related thereto. The
income attributable to, and the expenses of, one series are treated
separately from those of the other series. The Company has the ability to
create, from time to time, new series without shareholder approval.
Unless otherwise required by the 1940 Act, ordinarily it will
not be necessary for the Fund to hold annual meetings of shareholders. As
a result, Fund shareholders may not consider each year the election of
Board members or the appointment of auditors. However, pursuant to the
Company's By-Laws, the holders of at least 10% of the shares outstanding
and entitled to vote may require the Company to hold a special meeting of
shareholders for purposes of removing a Board member from office or for
any other purpose. Shareholders may remove a Board member by the
affirmative vote of a majority of the Company's outstanding voting
shares. In addition, the Board will call a meeting of shareholders for
the purpose of electing Board members if, at any time, less than a
majority of the Board members then holding office have been elected by
shareholders.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
Page 26
APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS -- Foreign currency transactions may be
entered into for a variety of purposes, including: to fix in U.S.
dollars, between trade and settlement date, the value of a security the
Fund has agreed to buy or sell; to hedge the U.S. dollar value of
securities the Fund already owns, particularly if it expects a decrease
in the value of the currency in which the foreign security is
denominated; or to gain exposure to the foreign currency in an attempt to
realize gains.
Foreign currency transactions may involve, for example, the
Fund's purchase of foreign currencies for U.S. dollars or the maintenance
of short positions in foreign currencies, which would involve the Fund
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the
value of the currency sold relative to the currency the Fund contracted
to receive in the exchange. The Fund's success in these transactions will
depend principally on The Dreyfus Corporation's ability to predict
accurately the future exchange rates between foreign currencies and the
U.S. dollar.
Currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by the forces of
supply and demand in the foreign exchange markets and the relative merits
of investments in different countries, actual or perceived changes in
interest rates and other complex factors, as seen from an international
perspective. Currency exchange rates also can be affected unpredictably
by intervention by U.S. or foreign governments or central banks, or the
failure to intervene, or by currency controls or political developments
in the United States or abroad.
SHORT-SELLING -- In these transactions, the Fund sells a security it
does not own in anticipation of a decline in the market value of the
security. To complete the transaction, the Fund must borrow the security
to make delivery to the buyer. The Fund is obligated to replace the
security borrowed by purchasing it subsequently at the market price at
the time of replacement. The price at such time may be more or less than
the price at which the security was sold by the Fund, which would result
in a loss or gain, respectively.
Securities will not be sold short if, after effect is given
to any such short sale, the total market value of all securities sold
short would exceed 25% of the value of the Fund's net assets. The Fund
may not sell short the securities of any single issuer listed on a
national securities exchange to the extent of more than 5% of the value
of the Fund's net assets. The Fund may not make a short sale which
results in the Fund having sold short in the aggregate more than 5% of
the outstanding securities of any class of an issuer.
The Fund also may make short sales "against the box," in
which the Fund enters into a short sale of a security it owns in order to
hedge an unrealized gain on the security. At no time will more than 15%
of the value of the Fund's net assets be in deposits on short sales
against the box.
BORROWING MONEY -- The Fund is permitted to borrow to the extent
permitted under the 1940 Act, which permits an investment company to
borrow in an amount up to 331/3% of the value of its total assets. The
Fund currently intends to borrow money only for temporary or emergency
(not leveraging) purposes, in an amount up to 15% of the value of its
total assets (including the amount borrowed) valued at the lesser of cost
or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While borrowings exceed 5% of the Fund's
total assets, the Fund will not make any additional investments.
USE OF DERIVATIVEs -- The Fund may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations
and Risks -- Use of Derivatives." These instruments and certain related
risks are described more specifically under "Investment Objectives and
Management Policies -- Management Policies -- Derivatives"in the
Statement of Additional Information.
Page 27
Although the Fund will not be a commodity pool, Derivatives
subject the Fund to the rules of the Commodity Futures Trading Commission
which limit the extent to which the Fund can invest in certain
Derivatives. The Fund may invest in futures contracts and options with
respect thereto for hedging purposes without limit. However, the Fund may
not invest in such contracts and options for other purposes if the sum of
the amount of initial margin deposits and premiums paid for unexpired
options with respect to such contracts, other than for bona fide hedging
purposes, exceed 5% of the liquidation value of the Fund's assets, after
taking into account unrealized profits and unrealized losses on such
contracts and options; provided, however, that in the case of an option
that is in-the-money at the time of purchase, the in-the-money amount may
be excluded in calculating the 5% limitation.
The Fund may invest up to 5% of its assets, represented by
the premium paid, in the purchase of call and put options. The Fund may
write (i.e., sell) covered call and put option contracts to the extent
of 20% of the value of its net assets at the time such option contracts
are written. When required by the Securities and Exchange Commission, the
Fund will set aside permissable liquid assets in a segregated account to
cover its obligations relating to its transactions in Derivatives. To
maintain this required cover, the Fund may have to sell portfolio
securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at a reasonable price.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES -- Convertible securities may be converted at
either a stated price or stated rate into underlying shares of common
stock and, therefore, are deemed to be equity securities for purposes of
the Fund's management policies. Convertible securities have characteristics
similar to both fixed-income and equity securities. Convertible securities
generally are subordinated to other similar but non-convertible
securities of the same issuer, although convertible bonds, as corporate
debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock, of
the same issuer. Because of the subordination feature, however,
convertible securities typically have lower ratings than similar
non-convertible securities.
AMERICAN DEPOSITARY RECEIPTS -- The Fund may invest in the securities
of foreign issuers in the form of American Depositary Receipts ("ADRs").
These securities may not necessarily be denominated in the same currency
as the securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation.
MONEY MARKET INSTRUMENTS -- The Fund may invest in the following
types of money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities include U.S.
Treasury securities that differ in their interest rates, maturities and
times of issuance. Some obligations issued or guaranteed by U.S.
Government agencies and instrumentalities are supported by the full faith
and credit of the U.S. Treasury; others by the right of the issuer to
borrow from the Treasury; others by discretionary authority of the U.S.
Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates
of interest. While the U.S. Government provides financial support to such
U.S. Government-sponsored agencies and instrumentalities, no assurance
can be given that it will always do so since it is not so obligated by
law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund
buys, and the seller agrees to repurchase, a security at a mutually
agreed upon time and price (usually within seven days). The repurchase
agreement thereby determines the yield during the purchaser's holding
period, while the seller's obligation to repurchase is secured by the
value of the underlying security. Repurchase agreements could involve
risks in the event of a default or insolvency of
Page 28
the other party to the agreement, including possible delays or restrictions
upon the Fund's ability to dispose of the underlying securities. The Fund
may enter into repurchase agreements with certain banks or non-bank dealers.
BANK OBLIGATIONS. The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term
obligations issued by domestic banks, foreign subsidiaries or foreign
branches of domestic banks, domestic and foreign branches of foreign
banks, domestic savings and loan associations and other banking
institutions. With respect to such securities issued by foreign
subsidiaries or foreign branches of domestic banks, and domestic and
foreign branches of foreign banks, the Fund may be subject to additional
investment risks that are different in some respects from those incurred
by a fund which invests only in debt obligations of U.S. domestic
issuers. See "Description of the Fund -- Investment Considerations and
Risks -- Foreign Securities."
Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited with it for
a specified period of time.
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time (in no event longer
than seven days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer. These
instruments reflect the obligation both of the bank and the drawer to pay
the face amount of the instrument upon maturity. The other short-term
obligations may include uninsured, direct obligations bearing fixed,
floating or variable interest rates.
COMMERCIAL PAPER. Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of direct
obligations which, at the time of their purchase, are (a) rated not lower
than Prime-1 by Moody's, A-1 by S&P, F-1 by Fitch or Duff-1 by Duff, (b)
issued by companies having an outstanding unsecured debt issue currently
rated at least A3 by Moody's or A- by S&P, Fitch or Duff, or (c) if
unrated, determined by The Dreyfus Corporation to be of comparable
quality to those rated obligations which may be purchased by the Fund.
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of
its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal
or contractual restrictions on resale, repurchase agreements providing
for settlement in more than seven days after notice, and certain
privately negotiated, non-exchange traded options and securities used to
cover such options. As to these securities, the Fund is subject to a risk
that should the Fund desire to sell them when a ready buyer is not
available at a price the Fund deems representative of their value, the
value of the Fund's net assets could be adversely affected.
RATINGS -- Securities rated Ba by Moody's are judged to have
speculative elements; their future cannot be considered as well assured
and often the protection of interest and principal payments may be very
moderate. Securities rated BB by S&P, Fitch or Duff are regarded as
having predominantly speculative characteristics and, while such
obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.
Securities rated Caa by Moody's or CCC by S&P, Fitch or Duff are of poor
standing and may be in default or there may be present elements of danger
with respect to principal or interest. Such securities, though high
yielding, are characterized by great risk. See "Appendix" in the
Statement of Additional Information for a general description of
securities ratings.
The ratings of Moody's, S&P, Fitch or Duff represent their
opinions as to the quality of the obligations which they undertake to
rate. Ratings are relative and subjective and, although ratings may be
useful in evaluating the safety of interest and principal payments, they
do not
Page 29
evaluate the market value risk of such obligations. Although these
ratings may be an initial criterion for selection of portfolio
investments, The Dreyfus Corporation also will evaluate these securities
and the ability of the issuers of such securities to pay interest and
principal. The Fund's ability to achieve its investment objective may be
more dependent on The Dreyfus Corporation's credit analysis than might be
the case for a fund that invested in higher rated securities.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER
OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
320p120196
Page 30
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Page 32
PREMIER EQUITY FUNDS, INC.
PREMIER AGGRESSIVE GROWTH FUND
PREMIER GROWTH AND INCOME FUND
CLASS A, CLASS B, CLASS C AND CLASS R
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JULY 1, 1996
As Revised December 1, 1996
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Premier Aggressive Growth Fund and Premier Growth and Income Fund (each,
a "Fund") of Premier Equity Funds, Inc. (the "Company"), dated January 8,
1996 and July 1, 1996, respectively, as each may be revised from time to
time. To obtain a copy of the relevant Fund's Prospectus, please write to
the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . B-2
Management of the Company . . . . . . . . . . . . . . . . . B-13
Management Agreement. . . . . . . . . . . . . . . . . . . . B-18
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . B-20
Distribution Plan and
Shareholder Services Plan . . . . . . . . . . . . . . . . B-21
Redemption of Shares. . . . . . . . . . . . . . . . . . . . B-23
Shareholder Services. . . . . . . . . . . . . . . . . . . . B-25
Determination of Net Asset Value. . . . . . . . . . . . . . B-28
Dividends, Distributions and Taxes. . . . . . . . . . . . . B-29
Portfolio Transactions. . . . . . . . . . . . . . . . . . . B-31
Performance Information . . . . . . . . . . . . . . . . . . B-32
Information About the Funds . . . . . . . . . . . . . . . . B-33
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors. . . . . . . . . . . . . B-34
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . B-35
Financial Statements. . . . . . . . . . . . . . . . . . . . B-42
Report of Independent Auditors. . . . . . . . . . . . . . . B-53
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the sections in each Fund's Prospectus entitled
"Description of the Fund" and "Appendix."
Portfolio Securities
American, European and Continental Depositary Receipts. (All Funds)
These securities may be purchased through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of
the underlying security and a depositary, whereas a depositary may
establish an unsponsored facility without participation by the issuer of
the deposited security. Holders of unsponsored depositary receipts
generally bear all the costs of such facilities and the depositary of an
unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts
in respect of the deposited securities.
Repurchase Agreements. (All Funds) The Funds' custodian or sub-
custodian will have custody of, and will hold in a segregated account,
securities acquired by a Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, each Fund will enter into
repurchase agreements only with domestic banks with total assets in excess
of $1 billion, or primary government securities dealers reporting to the
Federal Reserve Bank of New York, with respect to securities of the type in
which the Fund may invest, and will require that additional securities be
deposited with it if the value of the securities purchased should decrease
below the resale price.
Commercial Paper and Other Short-Term Corporate Obligations. (All
Funds) These instruments include variable amount master demand notes,
which are obligations that permit a Fund to invest fluctuating amounts at
varying rates of interest pursuant to direct arrangements between the Fund,
as lender, and the borrower. These notes permit daily changes in the
amounts borrowed. Because these obligations are direct lending
arrangements between the lender and borrower, it is not contemplated that
such instruments generally will be traded, and there generally is no
established secondary market for these obligations, although they are
redeemable at face value, plus accrued interest, at any time. Accordingly,
where these obligations are not secured by letters of credit or other
credit support arrangements, the Fund's right to redeem is dependent on the
ability of the borrower to pay principal and interest on demand. Such
obligations frequently are not rated by credit rating agencies, and a Fund
may invest in them only if at the time of an investment the borrower meets
the criteria set forth in the Fund's Prospectus for other commercial paper
issuers.
Convertible Securities. (All Funds) Convertible securities may be
converted at either a stated price or stated rate into underlying shares of
common stock and, therefore, are deemed to be equity securities for
purposes of the Funds' management policies. Convertible securities have
characteristics similar to both fixed-income and equity securities.
Convertible securities generally are subordinated to other similar but non-
convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all
equity securities, and convertible preferred stock is senior to common
stock, of the same issuer. Because of the subordination feature, however,
convertible securities typically have lower ratings than similar non-
convertible securities.
Although to a lesser extent than with fixed-income securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, tends to increase as interest rates decline. In
addition, because of the conversion feature, the market value of
convertible securities tends to vary with fluctuations in the market value
of the underlying common stock. A unique feature of convertible securities
is that as the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield basis, and so
may not experience market value declines to the same extent as the
underlying common stock. When the market price of the underlying common
stock increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock. While no
securities investments are without risk, investments in convertible
securities generally entail less risk than investments in common stock of
the same issuer.
Convertible securities are investments that provide for a stable
stream of income with generally higher yields than common stocks. There
can be no assurance of current income because the issuers of the
convertible securities may default on their obligations. A convertible
security, in addition to providing fixed income, offers the potential for
capital appreciation through the conversion feature, which enables the
holder to benefit from increases in the market price of the underlying
common stock. There can be no assurance of capital appreciation, however,
because securities prices fluctuate. Convertible securities, however,
generally offer lower interest or dividend yields than non-convertible
securities of similar quality because of the potential for capital
appreciation.
Investment Companies. (All Funds) Premier Aggressive Growth Fund may
invest in securities issued by open- and closed-end investment companies
and Premier Growth and Income Fund may invest in securities issued by
closed-end investment companies. Under the Investment Company Act of 1940,
as amended (the "1940 Act"), a Fund's investment in such securities,
subject to certain exceptions, currently is limited to (i) 3% of the total
voting stock of any one investment company, (ii) 5% of the Fund's total
assets with respect to any one investment company and (iii) 10% of the
Fund's total assets in the aggregate. Investments in the securities of
other investment companies may involve duplication of advisory fees and
certain other expenses.
Foreign Government Obligations; Securities of Supranational Entities.
(All Funds) A Fund may invest in obligations issued or guaranteed by one
or more foreign governments or any of their political subdivisions,
agencies or instrumentalities that are determined by the Manager to be of
comparable quality to the other obligations in which the Fund may invest.
Such securities also include debt obligations of supranational entities.
Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the
Asian Development Bank and the InterAmerican Development Bank.
Illiquid Securities. (All Funds) When purchasing securities that
have not been registered under the Securities Act of 1933, as amended, and
are not readily marketable, each Fund will endeavor, to the extent
practicable, to obtain the right to registration at the expense of the
issuer. Generally, there will be a lapse of time between the Fund's
decision to sell any such security and the registration of the security
permitting sale. During any such period, the price of the securities will
be subject to market fluctuations. However, where a substantial market of
qualified institutional buyers has developed for certain unregistered
securities purchased by the Fund pursuant to Rule 144A under the Securities
Act of 1933, as amended, the Fund intends to treat such securities as
liquid securities in accordance with procedures approved by the Company's
Board. Because it is not possible to predict with assurance how the market
for specific restricted securities sold pursuant to Rule 144A will develop,
the Company's Board has directed the Manager to monitor carefully the
relevant Fund's investments in such securities with particular regard to
trading activity, availability of reliable price information and other
relevant information. To the extent that, for a period of time, qualified
institutional buyers cease purchasing restricted securities pursuant to
Rule 144A, a Fund's investing in such securities may have the effect of
increasing the level of illiquidity in its investment portfolio during such
period.
Management Policies
Leverage. (All Funds) For borrowings for investment purposes, the
1940 Act requires the Fund to maintain continuous asset coverage (that is,
total assets including borrowings, less liabilities exclusive of
borrowings) of 300% of the amount borrowed. If the required coverage
should decline as a result of market fluctuations or other reasons, a Fund
may be required to sell some of its portfolio securities within three days
to reduce the amount of its borrowings and restore the 300% asset coverage,
even though it may be disadvantageous from an investment standpoint to sell
securities at that time. Each Fund also may be required to maintain
minimum average balances in connection with such borrowing or pay a
commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest
rate. To the extent a Fund enters into a reverse repurchase agreement, the
Fund will maintain in a segregated custodial account cash or U.S.
Government securities or other high quality liquid debt securities at least
equal to the aggregate amount of its reverse repurchase obligations, plus
accrued interest, in certain cases, in accordance with releases promulgated
by the Securities and Exchange Commission. The Securities and Exchange
Commission views reverse repurchase transactions as collateralized
borrowings by a Fund.
Short-Selling. (All Funds) In these transactions, a Fund sells a
security it does not own in anticipation of a decline in the market value
of the security. To complete the transaction, the Fund must borrow the
security to make delivery to the buyer. The Fund is obligated to replace
the security borrowed by purchasing it subsequently at the market price at
the time of replacement. The price at such time may be more or less than
the price at which the security was sold by the Fund, which would result in
a loss or gain, respectively.
Securities will not be sold short if, after effect is given to any
such short sale, the total market value of all securities sold short would
exceed 25% of the value of a Fund's net assets. A Fund may not sell short
the securities of any single issuer listed on a national securities
exchange to the extent of more than 5% of the value of the Fund's net
assets. A Fund may not make a short sale which results in the Fund having
sold short in the aggregate more than 5% of the outstanding securities of
any class of an issuer.
A Fund also may make short sales "against the box," in which the Fund
enters into a short sale of a security it owns in order to hedge an
unrealized gain on the security. At no time will more than 15% of the
value of the Fund's net assets be in deposits on short sales against the
box.
Until a Fund closes its short position or replaces the borrowed
security, it will: (a) maintain a segregated account, containing cash or
U.S. Government securities, at such a level that the amount deposited in
the account plus the amount deposited with the broker as collateral always
equals the current value of the security sold short; or (b) otherwise cover
its short position.
Lending Portfolio Securities. (Premier Aggressive Growth Fund only)
In connection with its securities lending transactions, Premier Aggressive
Growth Fund may return to the borrower or a third party which is
unaffiliated with the Fund, and which is acting as a "placing broker," a
part of the interest earned from the investment of collateral received for
securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or
other distributions payable on the loaned securities, and any increase in
market value; (5) the Fund may pay only reasonable custodian fees in
connection with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Company's Board must terminate the
loan and regain the right to vote the securities if a material event
adversely affecting the investment occurs.
Derivatives. (All Funds) A Fund may invest in Derivatives (as
defined in the Fund's Prospectus) for a variety of reasons, including to
hedge certain market risks, to provide a substitute for purchasing or
selling particular securities or to increase potential income gain.
Derivatives may provide a cheaper, quicker or more specifically focused way
for the Fund to invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the portfolio as a whole. Derivatives permit a Fund to increase or
decrease the level of risk, or change the character of the risk, to which
its portfolio is exposed in much the same way as the Fund can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives
could have a large potential impact on a Fund's performance.
If a Fund invests in Derivatives at inappropriate times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. A Fund also could experience losses if its
Derivatives were poorly correlated with its other investments, or if the
Fund were unable to liquidate its position because of an illiquid secondary
market. The market for many Derivatives is, or suddenly can become,
illiquid. Changes in liquidity may result in significant, rapid and
unpredictable changes in the prices for Derivatives.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated
with Derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter Derivatives. Therefore, each party to an over-
the-counter Derivative bears the risk that the counterparty will default.
Accordingly, the Manager will consider the creditworthiness of
counterparties to over-the-counter Derivatives in the same manner as it
would review the credit quality of a security to be purchased by a Fund.
Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only
investor with sufficient understanding of the Derivative to be interested
in bidding for it.
Futures Transactions--In General. (All Funds) A Fund may enter into
futures contracts in U.S. domestic markets, such as the Chicago Board of
Trade and the International Monetary Market of the Chicago Mercantile
Exchange, or, if permitted in its Prospectus, on exchanges located outside
the United States, such as the London International Financial Futures
Exchange and the Sydney Futures Exchange Limited. Foreign markets may
offer advantages such as trading opportunities or arbitrage possibilities
not available in the United States. Foreign markets, however, may have
greater risk potential than domestic markets. For example, some foreign
exchanges are principal markets so that no common clearing facility exists
and an investor may look only to the broker for performance of the
contract. In addition, any profits that a Fund might realize in trading
could be eliminated by adverse changes in the exchange rate, or the Fund
could incur losses as a result of those changes. Transactions on foreign
exchanges may include both commodities which are traded on domestic
exchanges and those which are not. Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not regulated by the
Commodity Futures Trading Commission.
Engaging in these transactions involves risk of loss to a Fund which
could adversely affect the value of the Fund's net assets. Although each
Fund intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid
market will exist for any particular contract at any particular time. Many
futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the
daily limit has been reached in a particular contract, no trades may be
made that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions and
potentially subjecting the Fund to substantial losses.
Successful use of futures by a Fund also is subject to the Manager's
ability to predict correctly movements in the direction of the relevant
market and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the transaction
being hedged and the price movements of the futures contract. For example,
if a Fund uses futures to hedge against the possibility of a decline in the
market value of securities held in its portfolio and the prices of such
securities instead increase, the Fund will lose part or all of the benefit
of the increased value of securities which it has hedged because it will
have offsetting losses in its futures positions. Furthermore, if in such
circumstances the Fund has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. A Fund may have to
sell such securities at a time when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, a Fund may be required to segregate cash or high
quality money market instruments in connection with its commodities
transactions in an amount generally equal to the value of the underlying
commodity. The segregation of such assets will have the effect of limiting
a Fund's ability otherwise to invest those assets.
Specific Futures Transactions. A Fund may purchase and sell stock index
futures contracts. A stock index future obligates a Fund to pay or receive
an amount of cash equal to a fixed dollar amount specified in the futures
contract multiplied by the difference between the settlement price of the
contract on the contract's last trading day and the value of the index
based on the stock prices of the securities that comprise it at the opening
of trading in such securities on the next business day.
A Fund may purchase and sell currency futures. A foreign currency
future obligates the Fund to purchase or sell an amount of a specific
currency at a future date at a specific price.
Premier Growth and Income Fund may purchase and sell interest rate
futures contracts. An interest rate future obligates the Fund to purchase
or sell an amount of a specific debt security at a future date at a
specific price.
Options--In General. (All Funds) A Fund may purchase and write
(i.e., sell) call or put options with respect to specific securities. A
call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security or securities at the
exercise price at any time during the option period, or at a specific date.
Conversely, a put option gives the purchaser of the option the right to
sell, and obligates the writer to buy, the underlying security or
securities at the exercise price at any time during the option period.
A covered call option written by a Fund is a call option with respect
to which the Fund owns the underlying security or otherwise covers the
transaction by segregating cash or other securities. A put option written
by a Fund is covered when, among other things, cash or liquid securities
having a value equal to or greater than the exercise price of the option
are placed in a segregated account with the Fund's custodian to fulfill the
obligation undertaken. The principal reason for writing covered call and
put options is to realize, through the receipt of premiums, a greater
return than would be realized on the underlying securities alone. A Fund
receives a premium from writing covered call or put options which it
retains whether or not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen
events, at times have rendered certain of the clearing facilities
inadequate and resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or trading halts
or suspensions in one or more options. There can be no assurance that
similar events, or events that may otherwise interfere with the timely
execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If,
as a covered call option writer, the Fund is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise or it otherwise covers its position.
Specific Options Transactions. A Fund may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of
specific securities) or stock indices listed on national securities
exchanges or traded in the over-the-counter market. An option on a stock
index is similar to an option in respect of specific securities, except
that settlement does not occur by delivery of the securities comprising the
index. Instead, the option holder receives an amount of cash if the
closing level of the stock index upon which the option is based is greater
than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. Thus, the effectiveness of purchasing or
writing stock index options will depend upon price movements in the level
of the index rather than the price of a particular stock.
A Fund may purchase and sell call and put options on foreign currency.
These options convey the right to buy or sell the underlying currency at a
price which is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.
A Fund may purchase cash-settled options on equity index swaps in
pursuit of its investment objective. Equity index swaps involve the
exchange by the Fund with another party of cash flows based upon the
performance of an index or a portion of an index of securities which
usually includes dividends. A cash-settled option on a swap gives the
purchaser the right, but not the obligation, in return for the premium
paid, to receive an amount of cash equal to the value of the underlying
swap as of the exercise date. These options typically are purchased in
privately negotiated transactions from financial institutions, including
securities brokerage firms.
Successful use by a Fund of options will be subject to the ability of
the Manager to predict correctly movements in the prices of individual
stocks, the stock market generally, foreign currencies or interest rates.
To the extent such predictions are incorrect, a Fund may incur losses.
Future Developments. A Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other Derivatives which are not presently contemplated for use by
the Fund or which are not currently available but which may be developed,
to the extent such opportunities are both consistent with the Fund's
investment objective and legally permissible for the Fund. Before entering
into such transactions or making any such investment, the Fund will provide
appropriate disclosure in its Prospectus or Statement of Additional
Information.
Forward Commitments. (All Funds) A Fund may purchase securities on a
forward commitment or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate receivable on a
forward commitment or when-issued security are fixed when the Fund enters
into the commitment but the Fund does not make a payment until it receives
delivery from the counterparty. A Fund will commit to purchase such
securities only with the intention of actually acquiring the securities,
but the Fund may sell these securities before the settlement date if it is
deemed advisable. A segregated account of the Fund consisting of cash,
cash equivalents or U.S. Government securities or other high quality liquid
debt securities at least equal at all times to the amount of the
commitments will be established and maintained at the Funds' custodian
bank.
Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest
rates. Securities purchased on a forward commitment or when-issued basis
may expose a Fund to risks because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued
basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a forward
commitment or when-issued basis when a Fund is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Fund's net assets and its net asset value per share.
Investment Considerations and Risks
Lower Rated Convertible Debt Securities. (Premier Growth and Income
Fund only) The Fund is permitted to invest in convertible debt securities
rated Ba by Moody's Investors Service, Inc. ("Moody's") and BB by Standard
& Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc.
("S&P"), Fitch Investors Service, L.P. ("Fitch") and Duff & Phelps Credit
Rating Co. ("Duff," and with the other rating agencies, the "Rating
Agencies") and as low as Caa by Moody's or CCC by S&P, Fitch or Duff. Such
securities, though higher yielding, are characterized by risk. See
"Description of the Fund--Investment Considerations and Risks--Lower Rated
Convertible Debt Securities" in Premier Growth and Income Fund's Prospectus
for a discussion of certain risks and the "Appendix" for a general
description of the Rating Agencies' ratings. Although ratings may be
useful in evaluating the safety of interest and principal payments, they do
not evaluate the market value risk of these securities. The Fund will rely
on the Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer.
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities. These securities generally are considered by the Rating
Agencies to be, on balance, predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with the terms
of the obligation and generally will involve more credit risk than
securities in the higher rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with the higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
not have sufficient revenues to meet their interest payment obligations.
The issuer's ability to service its debt obligations also may be affected
adversely by specific corporate developments, forecasts, or the
unavailability of additional financing. The risk of loss because of
default by the issuer is significantly greater for the holders of these
securities because such securities generally are unsecured and often are
subordinated to other creditors of the issuer.
These securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt severely
the market for such securities and may have an adverse impact on the value
of such securities. In addition, it is likely that any such economic
downturn could adversely affect the ability of the issuers of such
securities to repay principal and pay interest thereon and increase the
incidence of default for such securities.
The Fund may acquire these securities during an initial offering.
Such securities may involve special risks because they are new issues. The
Fund has no arrangement with any persons concerning the acquisition of such
securities, and the Manager will review carefully the credit and other
characteristics pertinent to such new issues.
Investment Restrictions
Premier Growth and Income Fund only. The Fund has adopted investment
restrictions numbered 1 through 8 as fundamental policies, which cannot be
changed without approval by the holders of a majority (as defined in the
1940 Act) of the Fund's outstanding voting shares. Investment restrictions
numbered 9 through 14 are not fundamental policies and may be changed by
vote of a majority of the Company's Board members at any time. The Fund
may not:
1. Invest more than 25% of the value of its total assets in the
securities of issuers in any single industry, provided that there shall be
no limitation on the purchase of obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
2. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
3. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but the Fund may
purchase and sell securities that are secured by real estate or issued by
companies that invest or deal in real estate or real estate investment
trusts.
4. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets). For purposes of this Investment Restriction, the
entry into options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices shall not
constitute borrowing.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, the Fund
may lend its portfolio securities in an amount not to exceed 33-1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Company's Board.
6. Act as an underwriter of securities of other issuers, except to
the extent the Fund may be deemed an underwriter under the Securities Act
of 1933, as amended, by virtue of disposing of portfolio securities.
7. Issue any senior security (as such term is defined in Section
18(f) of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 2, 4, 11 and 12 may be deemed to give rise to a
senior security.
8. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, including those relating to indices, and options on
futures contracts or indices.
9. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessor) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
10. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the securities it
owns in its portfolio as a shareholder in accordance with its views.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.
12. Purchase, sell or write puts, calls or combinations thereof,
except as described in the Fund's Prospectus and Statement of Additional
Information.
13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Fund's net assets would
be so invested.
14. Purchase securities of other investment companies, except to the
extent permitted under the 1940 Act.
* * *
Premier Aggressive Growth Fund only. The Fund has adopted investment
restrictions numbered 1 through 12 as fundamental policies, which cannot be
changed without approval by the holders of a majority (as defined in the
1940 Act) of the Fund's outstanding voting shares. Investment restriction
number 13 is not a fundamental policy and may be changed by vote of a
majority of the Company's Board members at any time. The Fund may not:
1. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its total assets to be invested in
securities of any one issuer (except securities of the United States
Government or any instrumentality thereof) nor purchase more than 10% of
the voting securities of any one issuer.
2. Purchase securities of any company having less than three years'
continuous operation (including operations of any predecessors) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its assets.
3. Purchase securities of other investment companies, except as they
may be acquired by purchase in the open market involving no commissions or
profits to a sponsor or dealer (other than the customary broker's
commission) or except as they may be acquired as part of a merger,
consolidation or acquisition of assets.
4. Purchase or retain the securities of any issuer if those officers
or directors of the Company or the Manager owning individually more than
1/2 of 1% of the securities of such issuer together own more than 5% of the
securities of such issuer.
5. Purchase, hold or deal in commodities or commodity contracts,
except as set forth in the Fund's Prospectus and Statement of Additional
Information, or in real estate (except for corporate office purposes), but
this shall not prohibit the Fund from investing in marketable securities of
companies engaged in real estate activities or investments.
6. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of
the Fund's total assets). For purposes of this Investment Restriction, the
entry into options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices shall not
constitute borrowing.
7. Lend any funds or other assets, except through the purchase of a
portion of an issue of publicly distributed bonds, debentures or other debt
securities or the purchase of bankers' acceptances and commercial paper of
corporations. However, the Company's Board may, on the request of broker-
dealers or other institutional investors which it deems qualified,
authorize the Fund to lend securities, but only when the borrower pledges
cash collateral to the Fund and agrees to maintain such collateral so that
it amounts at all times to at least 100% of the value of the securities.
Such security loans will not be made if, as a result, the aggregate of such
loans exceeds 10% of the value of the Fund's total assets.
8. Act as an underwriter of securities of other issuers.
9. Purchase from or sell to any of the Company's officers or
directors or firms of which any of them are members any securities (other
than capital stock of the Company).
10. Invest in the securities of a company for the purpose of
management or the exercise of control, but the Fund will vote the
securities it owns in its portfolio as a shareholder in accordance with its
own views.
11. Engage in the purchase and sale of put and call options or in
writing such options, except as set forth in the Fund's Prospectus and
Statement of Additional Information.
12. Concentrate its investments in any particular industry or
industries, except that the Fund may invest as much as 25% of the value of
its total assets in a single industry.
13. Pledge, mortgage or hypothecate its assets, except to the
extent necessary to secure permitted borrowings and to the extent related
to the purchase of securities on a when-issued or forward commitment basis
and the deposit of assets in escrow in connection with writing covered put
and call options and collateral and initial or variation margin
arrangements with respect to options, forward contracts, futures contracts,
including those relating to indices, and options on futures contracts or
indices.
Premier Aggressive Growth Fund also has undertaken not to purchase
warrants which, valued at the lower of cost or market, would exceed 5% of
the value of the Fund's net assets. Included within this amount, but not
to exceed 2% of the value of the Fund's net assets, may be warrants which
are not listed on the New York or American Stock Exchange. Warrants
acquired by the Fund in units or attached to securities shall not be
subject to such percentage restriction.
* * *
If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.
The Company may make commitments more restrictive than the
restrictions listed above so as to permit the sale of Fund shares in
certain states. Should the Company determine that a commitment is no
longer in the best interest of the Fund and its shareholders, the Company
reserves the right to revoke the commitment by terminating the sale of such
Fund's shares in the state involved.
MANAGEMENT OF THE COMPANY
Board members and officers of the Company, together with information
as to their principal business occupations during at least the last five
years, are shown below. Each Board member who is deemed to be an
"interested person" of the Company, as defined in the 1940 Act, is
indicated by an asterisk.
Board Members of the Company
* JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until
August 24, 1994, the Company's distributor. From August 1994 until
December 31, 1994, he was a director of Mellon Bank Corporation. He
is also Chairman of the Board of Directors of Noel Group, Inc., a
venture capital company; a trustee of Bucknell University; and a
director of The Muscular Dystrophy Association, HealthPlan Services
Corporation, Belding Heminway Company, Inc., a manufacturer and
marketer of industrial threads, specialty yarns, home furnishings and
fabrics, Curtis Industries, Inc., a national distributor of security
products, chemicals and automotive and other hardware, and Staffing
Resources, Inc. He is 52 years old and his address is 200 Park
Avenue, New York, New York 10166.
*DAVID P. FELDMAN, Board Member. Chairman and Chief Executive Officer of
AT&T Investment Management Corporation. He is also a trustee of
Corporate Property Investors, a real estate investment company. He is
56 years old and his address is One Oak Way, Berkeley Heights, New
Jersey 07922.
JOHN M. FRASER, JR., Board Member. President of Fraser Associates, a
service company for planning and arranging corporate meetings and
other events. From September 1975 to June 1978, he was Executive Vice
President of Flagship Cruises, Ltd. Prior thereto, he was Senior Vice
President and Resident Board Member of the Swedish-American Line for
the United States and Canada. He is 75 years old and his address is
133 East 64th Street, New York, New York 10021.
ROBERT R. GLAUBER, Board Member. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University, since January 1992. He was Under Secretary of the
Treasury for Finance at the U.S. Treasury Department, from May 1989 to
January 1992. For more than five years prior thereto, he was a
Professor of Finance at the Graduate School of Business Administration
of Harvard University and, from 1985 to 1989, Chairman of its Advanced
Management Program. He is 57 years old and his address is 79 John F.
Kennedy Street, Cambridge, Massachusetts 02138.
JAMES F. HENRY, Board Member. President of the CPR Institute for Dispute
Resolution, a non-profit organization principally engaged in the
development of alternatives to business litigation. He was of counsel
to the law firm of Lovejoy, Wasson & Ashton from October 1975 to
December 1976 and from October 1979 to June 1983, and was a partner of
the firm from January 1977 to September 1979. He was President and a
director of the Edna McConnell Clark Foundation, a philanthropic
organization, from September 1971 to December 1976. Mr. Henry is 65
years old and his address is c/o CPR Institute for Dispute Resolution,
366 Madison Avenue, New York, New York 10017.
ROSALIND GERSTEN JACOBS, Board Member. Director of Merchandise and
Marketing for Corporate Property Investors, a real estate investment
company. From 1974 to 1976, she was owner and manager of a
merchandise and marketing consulting firm. Prior to 1974, she was a
Vice President of Macy's, New York. Mrs. Jacobs is 71 years old and
her address is c/o Corporate Property Investors, 305 East 47th Street,
New York, New York 10017.
IRVING KRISTOL, Board Member. John M. Olin Distinguished Fellow of the
American Enterprise Institute for Public Policy Research, co-editor of
The Public Interest magazine, and an author or co-editor of several
books. From May 1981 to December 1994, he was a consultant to the
Manager on economic matters; from 1969 to 1988, he was Professor of
Social Thought at the Graduate School of Business Administration, New
York University; and from September 1969 to August 1979, he was Henry
R. Luce Professor of Urban Values at New York University. Mr. Kristol
is 76 years old and his address is c/o The Public Interest, 1112 16th
Street, N.W., Suite 530, Washington, D.C. 20036.
DR. PAUL A. MARKS, Board Member. President and Chief Executive Officer of
Memorial Sloan-Kettering Cancer Center. He was Vice President for
Health Sciences and Director of the Cancer Center at Columbia
University from 1973 to 1980, and Professor of Medicine and of Human
Genetics and Development at Columbia University from 1968 to 1982. He
is also a director of Pfizer, Inc., a pharmaceutical company, Life
Technologies, Inc., a life science company producing products for cell
and molecular biology and microbiology, and Tularik, Inc., a
biotechnology company, and a general partner of LINC Venture Lease
Partners II, L.P., a limited partnership engaged in leasing. Dr.
Marks is 69 years old and his address is c/o Memorial Sloan-Kettering
Cancer Center, 1275 York Avenue, New York, New York 10021.
DR. MARTIN PERETZ, Board Member. Editor-in-Chief of The New Republic
magazine and a lecturer in Social Studies at Harvard University, where
he has been a member of the faculty since 1965. He is a trustee of
The Center for Blood Research at the Harvard Medical School and a
director of LeukoSite Inc., a biopharmaceutical company. Dr. Peretz
is 56 years old and his address is c/o The New Republic, 1220 19th
Street, N.W., Washington, D.C. 20036.
BERT W. WASSERMAN, Board Member. Financial Consultant. From January 1990
to March 1995, Executive Vice President and Chief Financial Officer,
and, from January 1990 to March 1993, a director of Time Warner Inc.;
from 1981 to 1990, he was a member of the office of the President and
a director of Warner Communications, Inc. He is also a member of the
Chemical Bank National Advisory Board and a director of The New
Germany Fund, Mountasia Entertainment International, Inc. and the
Lillian Vernon Corporation. Mr. Wasserman is 63 years old and his
address is 126 East 56th Street, Suite 12 North, New York, New York
10022-3613.
For so long as the Company's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Board members who are not "interested persons" of the Company, as defined
in the 1940 Act, will be selected and nominated by the Board members who
are not "interested persons" of the Company.
The Company typically pays its Board members an annual retainer and a
per meeting fee and reimburses them for their expenses. The Chairman of
the Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Company for the fiscal year
ended September 30, 1995, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total compensation) for
the year ended December 31, 1995, were as follows:
Total Compensation
From Company and
Aggregate Fund Complex
Name of Board Compensation Paid to Board
Member From Company* Member
Joseph S. DiMartino $5,613 $448,618 (94)
David P. Feldman $6,112 $113,783 (37)
John M. Fraser, Jr. $7,000 $58,606 (12)
Robert R. Glauber $7,000 $97,503 (20)
James F. Henry $7,000 $53,500 (10)
Rosalind Gersten Jacobs $7,000 $92,500 (20)
Irving Kristol $7,000 $53,500 (10)
Dr. Paul A. Marks $7,000 $49,427 (10)
Dr. Martin Peretz $7,000 $53,500 (10)
Bert W. Wasserman $7,000 $54,739 (10)
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $728 for all Board members as a group.
Officers of the Company
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. Prior to December 1991, she served
as Vice President and Controller, and later as Senior Vice President,
of The Boston Company Advisors, Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray. He is 32 years old.
ELIZABETH BACHMAN, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. She is 26 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to August
1994, he was manager of the High Performance Fabric Division of
Springs Industries Inc. He is 34 years old.
JOSEPH F. TOWER, III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.
MARGARET PARDO, Assistant Secretary. Legal Assistant with the Distributor
and an officer of other investment companies advised or
administered by the Manager. From June 1992 to April 1995, she was a
Medical Coordinator Officer at ORBIOS International. Prior to June
1992, she worked as Program Coordinator at Physicians World
Communications Group. She is 27 years old.
The address of each officer of the Company is 200 Park Avenue, New
York, New York 10166.
The Company's Board members and officers, as a group, owned less than
1% of each Fund's voting securities outstanding on June 17, 1996.
The following are known by the Company to own, of record or
beneficially, 5% or more of the outstanding voting securities of Premier
Aggressive Growth Fund as of June 17, 1996: Jacob E. Staab, TTEE for the
Jacob E. Staab Rev Liv Trust - 82.4%, Dreyfus Trust Company Custodian FBO
Bhaskerao D. Patel - 9.7%, and Premier Mutual Fund Services, Inc. - 7.86%
of the Fund's Class B shares; Charles A. Pryor Jr. and Rose M. Pryor -
93.3% of the Fund's Class C shares; and Premier Mutual Fund Services, Inc.
- - 6.7% of the Fund's Class C shares and 100% of the Fund's Class R shares.
The following are known by the Company to own, of record or beneficially,
5% or more of the outstanding voting securities of Premier Growth and
Income Fund as of June 17, 1996: Edward H. Godwin - 5.5% and Donaldson,
Lufkin and Jenrette - 5.0% of the Fund's Class A shares; Merrill Lynch
Pierce Fenner & Smith Inc. House - 20%, NFSC FEBO JM Rebescher - 15%, and
NFSC FEBO John Kozakis - 5.75% of the Fund's Class C shares; and Premier
Mutual Fund Services, Inc. - 100% of the Fund's Class R shares.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled "Management
of the Company."
Management Agreement. The Manager provides management services
pursuant to the Management Agreement (the "Agreement") dated August 24,
1994, as amended December 11, 1995, with the Company. As to each Fund, the
Agreement is subject to annual approval by (i) the Company's Board or (ii)
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund, provided that in either event the continuance also
is approved by a majority of the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Company or the Manager, by
vote cast in person at a meeting called for the purpose of voting on such
approval. The Agreement was approved by shareholders on August 2, 1994 in
respect of Premier Aggressive Growth Fund, and was last approved by the
Company's Board, including a majority of the Board members who are not
"interested persons" of any party to the Agreement, at a meeting held on
May 29, 1996. As to each Fund, the Agreement is terminable without
penalty, on 60 days' notice, by the Company's Board or by vote of the
holders of a majority of such Fund's shares, or, on not less than 90 days'
notice, by the Manager. The Agreement will terminate automatically, as to
the relevant Fund, in the event of its assignment (as defined in the 1940
Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice
Chairman--Distribution and a director; Philip L. Toia, Vice
Chairman--Operations and Administration and a director; William T.
Sandalls, Jr., Senior Vice President and Chief Financial Officer; Elie M.
Genadry, Vice President--Institutional Sales; William F. Glavin, Jr., Vice
President--Corporate Development; Mark N. Jacobs, Vice President, General
Counsel and Secretary; Patrice M. Kozlowski, Vice President--Corporate
Communications; Mary Beth Leibig, Vice President--Human Resources; Jeffrey
N. Nachman, Vice President--Mutual Fund Accounting; Andrew S. Wasser, Vice
President--Information Systems; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene
and Julian M. Smerling, directors.
The Manager manages each Fund's investments in accordance with the
stated policies of such Fund, subject to the approval of the Company's
Board. The Manager is responsible for investment decisions, and provides
the Funds with portfolio managers who are authorized by the Board to
execute purchases and sales of securities. The Funds' portfolio managers
are Richard B. Hoey (with respect to Premier Aggressive Growth Fund and
Premier Growth and Income Fund), Donald C. Geogerian (with respect to
Premier Aggressive Growth Fund) and Michael L. Schonberg (with respect to
Premier Aggressive Growth Fund). The Manager also maintains a research
department with a professional staff of portfolio managers and securities
analysts who provide research services for the Funds as well as for other
funds advised by the Manager. All purchases and sales are reported for the
Board's review at the meeting subsequent to such transactions.
The Manager maintains office facilities on behalf of the Funds, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Funds. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
Expenses. All expenses incurred in the operation of the Company are
borne by the Company, except to the extent specifically assumed by the
Manager. The expenses borne by the Company include: organizational costs,
taxes, interest, brokerage fees and commissions, if any, fees of Board
members who are not officers, directors, employees or holders of 5% or more
of the outstanding voting securities of the Manager or any of its
affiliates, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of registrars and custodians,
transfer and dividend disbursing agents' fees, outside auditing and legal
expenses, costs of maintaining the Company's existence, costs attributable
to investor services, costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses. In addition, Class B and Class C
shares are subject to an annual distribution fee and Class A, Class B and
Class C shares are subject to an annual service fee. See "Distribution
Plan and Shareholder Services Plan." Expenses attributable to a particular
Fund are charged against the assets of that Fund; other expenses of the
Company are allocated among the Funds on the basis determined by the Board,
including, but not limited to, proportionately in relation to the net
assets of each Fund.
As compensation for the Manager's services to the Company, the Company
has agreed to pay the Manager a monthly management fee at the annual rate
of .75 of 1% of the value of Premier Aggressive Growth Fund's and Premier
Growth and Income Fund's average daily net assets. For the fiscal years
ended September 30, 1993, 1994 and 1995, the management fees paid by the
Company for Premier Aggressive Growth Fund amounted to $4,191,498,
$4,509,012 and $4,287,150, respectively. Premier Growth and Income Fund
has not completed its first fiscal year.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed, with respect to Class A of Premier Aggressive Growth Fund, 1-1/2%
of the average value of such Fund's net assets attributable to its Class A
shares or, with respect to each other Class of Premier Aggressive Growth
Fund and with respect to each other Fund, the expense limitation of any
state having jurisdiction over the Fund, the Fund may deduct from the
payment to be made to the Manager under the Agreement, or the Manager will
bear, such excess expense. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the case may be,
on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of a Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled "How to Buy
Shares."
The Distributor. The Distributor serves as each Fund's distributor on
a best efforts basis pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the other funds in the Premier
Family of Funds, for funds in the Dreyfus Family of Funds and for certain
other investment companies. In some states, certain financial institutions
effecting transactions in Fund shares may be required to register as
dealers pursuant to state law.
For the period from August 24, 1994 through September 30, 1994, the
Distributor retained $191 from sales loads on Premier Aggressive Growth
Fund shares. For the fiscal year ended September 30, 1995, no amount was
retained by the Distributor from sales loads on Premier Aggressive Growth
Fund shares. For the fiscal year ended September 30, 1993 and for the
period from October 1, 1993 through August 23, 1994, Dreyfus Service
Corporation, as the Company's distributor during such period, retained
$1,577,145 and $934,357, respectively, from sales loads on Premier
Aggressive Growth Fund shares.
Sales Loads--Class A. The scale of sales loads applies to purchases
of Class A shares made by any "purchaser," which term includes an
individual and/or spouse purchasing securities for his, her or their own
account or for the account of any minor children, or a trustee or other
fiduciary purchasing securities for a single trust estate or a single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Internal Revenue Code of 1986, as amended (the "Code")) although more than
one beneficiary is involved; or a group of accounts established by or on
behalf of the employees of an employer or affiliated employers pursuant to
an employee benefit plan or other program (including accounts established
pursuant to Sections 403(b), 408(k), and 457 of the Code); or an organized
group which has been in existence for more than six months, provided that
it is not organized for the purpose of buying redeemable securities of a
registered investment company and provided that the purchases are made
through a central administration or a single dealer, or by other means
which result in economy of sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Class A shares of each Fund. The example assumes a purchase
of Class A shares of the Fund aggregating less than $50,000 subject to the
schedule of sales charges set forth in the Fund's Prospectus at a price
based upon the net asset value of a Class A share on September 30, 1996 for
Premier Aggressive Growth Fund and for Premier Growth and Income Fund:
Premier Aggressive Premier
Growth Fund* and Income Fund
Net Asset Value per Share. . $14.81 $18.45
Per Share Sales Charge - 5.75%
of offering price (6.10% of
net asset value per share) $ .90 $ 1.13
Per Share Offering Price to
the Public. . . . . . . . $15.71 $19.58
_____________________
* Class A shares of Premier Aggressive Growth Fund purchased by
shareholders beneficially owning Fund shares on December 31, 1995,
or November 30, 1996, are subject to a different sales load schedule,
as described under "How to Buy Shares--Class A Shares" in the Fund's
Prospectus.
TeleTransfer Privilege. A TeleTransfer purchase order may be made at
any time. Purchase orders received by 4:00 p.m., New York time, on any
business day that Dreyfus Transfer, Inc., the Funds' transfer and dividend
disbursing agent (the "Transfer Agent"), and the New York Stock Exchange
are open for business will be credited to the shareholder's Fund account on
the next bank business day following such purchase order. Purchase orders
made after 4:00 p.m., New York time, on any business day the Transfer Agent
and the New York Stock Exchange are open for business, or orders made on
Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's
Fund account on the second bank business day following such purchase order.
To qualify to use the TeleTransfer Privilege, the initial payment for
purchase of shares must be drawn on, and redemption proceeds paid to, the
same bank and account as are designated on the Account Application or
Shareholder Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the request
must be in writing and signature-guaranteed. See "Redemption of
Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Distribution Plan and Shareholder Services Plan."
Class B and Class C shares are subject to a Distribution Plan and
Class A, Class B and Class C shares are subject to a Shareholder Services
Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the 1940 Act provides, among other things,
that an investment company may bear expenses of distributing its shares
only pursuant to a plan adopted in accordance with the Rule. The Company's
Board has adopted such a plan with respect to Class B and Class C shares
(the "Plan") of each Fund pursuant to which the Company pays the
Distributor for distributing the relevant Class of shares. The Company's
Board believes that there is a reasonable likelihood that Plan will benefit
each Fund and the holders of Class B and Class C shares.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Board for its review. In addition, the Plan provides that it may not be
amended to increase materially the cost which holders of Class B or Class C
shares may bear pursuant to the Plan without the approval of the holders of
such shares and that other material amendments of the Plan must be approved
by the Company's Board, and by the Board members who are not "interested
persons" (as defined in the 1940 Act) of the Company and have no direct or
indirect financial interest in the operation of the Plan or in any
agreements entered into in connection with the Plan, by vote cast in person
at a meeting called for the purpose of considering such amendments. The
Plan is subject to annual approval by such vote cast in person at a meeting
called for the purpose of voting on the Plan. The Plan was so approved by
the Board at a meeting held on May 29, 1996. As to each Fund, the Plan may
be terminated at any time by vote of a majority of the Board members who
are not "interested persons" and have no direct or indirect financial
interest in the operation of the Plan or in any agreements entered into in
connection with the Plan or by vote of the holders of a majority of Class B
and Class C shares of such Fund.
Shareholder Services Plan. The Company has adopted a Shareholder
Services Plan with respect to each Fund, pursuant to which the Company pays
the Distributor for the provision of certain services to the holders of
Class A, Class B and Class C shares. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Company and providing reports and other
information, and services related to the maintenance of such shareholder
accounts. Under the Shareholder Services Plan, the Distributor may make
payments to certain securities dealers, financial institutions and other
financial industry professionals (collectively, "Service Agents") in
respect of these services.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Board for its review. In addition, the Shareholder
Services Plan provides that material amendments must be approved by the
Company's Board, and by the Board members who are not "interested persons"
(as defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Shareholder Services Plan or in
any agreements entered into in connection with the Shareholder Services
Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Shareholder Services Plan is subject to
annual approval by such vote cast in person at a meeting called for the
purpose of voting on the Shareholder Services Plan. The Shareholder
Services Plan was so approved by the Board at a meeting held on May 29,
1996. As to each Fund, the Shareholder Services Plan is terminable at any
time by vote of a majority of the Board members who are not "interested
persons" and who have no direct or indirect financial interest in the
operation of the Shareholder Services Plan or in any agreements entered
into in connection with the Shareholder Services Plan.
Prior Shareholder Services Plan. As of January 1, 1996, the Company
terminated its then-existing Shareholder Services Plan pursuant to which
the Premier Capital Growth Fund reimbursed Dreyfus Service Corporation
certain allocated expenses of providing personal services and/or
maintaining shareholder accounts at an annual rate of up to .25 of 1% of
the value of the Premier Aggressive Growth Fund's total assets. For the
fiscal year ended September 30, 1995, Premier Aggressive Growth Fund paid
Dreyfus Service Corporation $647,159 pursuant to such plan.
REDEMPTION OF SHARES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled "How to
Redeem Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Company will initiate payment for shares redeemed pursuant to this
Privilege on the next business day after receipt by the Transfer Agent of
the redemption request in proper form. Redemption proceeds ($1,000
minimum) will be transferred by Federal Reserve wire only to the commercial
bank account specified by the investor on the Account Application or
Shareholder Services Form, or to a correspondent bank if the investor's
bank is not a member of the Federal Reserve System. Fees ordinarily are
imposed by such bank and usually are borne by the investor. Immediate
notification by the correspondent bank to the investor's bank is necessary
to avoid a delay in crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption will
be effected as a TeleTransfer transaction through the Automated Clearing
House ("ACH") system unless more prompt transmittal specifically is
requested. Redemption proceeds will be on deposit in the investor's
account at an ACH member bank ordinarily two business days after receipt of
the redemption request. See "Purchase of Shares--TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification.
Redemption Commitment. The Company has committed to pay in cash all
redemption requests by any shareholder of record of a Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the
value of such Fund's net assets at the beginning of such period. Such
commitment is irrevocable without the prior approval of the Securities and
Exchange Commission. In the case of requests for redemption in excess of
such amount, the Board reserves the right to make payments in whole or in
part in securities (which may include non-marketable securities) or other
assets in case of an emergency or any time a cash distribution would impair
the liquidity of the Fund to the detriment of the existing shareholders.
In such event, the securities would be valued in the same manner as the
Fund's securities are valued. If the recipient sold such securities,
brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the relevant Fund ordinarily
utilizes is restricted, or when an emergency exists as determined by the
Securities and Exchange Commission so that disposal of the Fund's
investments or determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities and Exchange
Commission by order may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Shareholder Services."
Fund Exchanges. Shares of any Class of the Fund may be exchanged for
shares of the respective Class of certain other funds advised or
administered by the Manager. Shares of the same Class of such funds
purchased by exchange will be purchased on the basis of relative net asset
value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.
E. Shares of funds subject to a contingent deferred sales charge
("CDSC") that are exchanged for shares of another fund will be
subject to the higher applicable CDSC of the two funds, and for
purposes of calculating CDSC rates and conversion periods, if
any, will be deemed to have been held since the date the shares
being exchanged were initially purchased.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account number.
To request an exchange, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this Privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer
Agent to act on telephonic instructions from any person representing
himself or herself to be the investor or a representative of the investor's
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Telephone exchanges may be subject to limitations as to the amount involved
or the number of telephone exchanges permitted. Shares issued in
certificate form are not eligible for telephone exchange.
Exchanges of Class R shares held by a Retirement Plan may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund.
To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in corporate plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $1,000 invested among
the funds in the Premier Family of Funds or the Dreyfus Family of Funds.
To exchange shares held in a personal retirement plan account, the shares
exchanged must have a current value of at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for shares of the Fund, shares of the
same Class of another fund in the Premier Family of Funds or the Dreyfus
Family of Funds. This Privilege is available only for existing accounts.
With respect to Class R shares held by a Retirement Plan, exchanges may be
made only between the investor's Retirement Plan account in one fund and
such investor's Retirement Plan account in another fund. Shares will be
exchanged on the basis of relative net asset value as described above under
"Fund Exchanges." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An investor will be notified if the investor's account falls
below the amount designated to be exchanged under this Privilege. In this
case, an investor's account will fall to zero unless additional investments
are made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible
for this Privilege. Exchanges of IRA shares may be made between IRA
accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Company reserves the right to
reject any exchange request in whole or in part. The Fund Exchanges
service or the Auto-Exchange Privilege may be modified or terminated at any
time upon notice to shareholders.
Automatic Withdrawal. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Dividend Sweep. Dividend Sweep allows investors to invest on the
payment date their dividends or dividends and capital gain distributions,
if any, from the Fund in shares of the same Class of another fund in the
Premier Family of Funds or the Dreyfus Family of Funds of which the
investor is a shareholder. Shares of the same Class of other funds
purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with a
sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a CDSC and the applicable CDSC,
if any, will be imposed upon redemption of such shares.
Corporate Pension/Profit-Sharing and Retirement Plans. The Company
makes available to corporations a variety of prototype pension and profit-
sharing plans including a 401(k) Salary Reduction Plan. In addition, the
Company makes available Keogh Plans, IRAs, including SEP-IRAs and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support services also are
available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or
IRAs may charge a fee, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, is
$1,000 with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant, is ordinarily $750, with no minimum on
subsequent purchases. Individuals who open an IRA may also open a non-
working spousal IRA with a minimum investment of $250.
Each investor should read the prototype retirement plan and the
appropriate form of custodial agreement for further details on eligibility,
service fees and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled "How to Buy
Shares."
Valuation of Portfolio Securities. Each Fund's securities, including
covered call options written by a Fund, are valued at the last sale price
on the securities exchange or national securities market on which such
securities primarily are traded. Securities not listed on an exchange or
national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except in the case of open short positions where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Any assets or liabilities initially expressed in terms of
foreign currency will be translated into U.S. dollars at the midpoint of
the New York interbank market spot exchange rate as quoted on the day of
such translation or, if no such rate is quoted on such date, such other
quoted market exchange rate as may be determined to be appropriate by the
Manager. Forward currency contracts will be valued at the current cost of
offsetting the contract. If a Fund has to obtain prices as of the close of
trading on various exchanges throughout the world, the calculation of net
asset value may not take place contemporaneously with the determination of
prices of certain of the Funds' securities. Short-term investments are
carried at amortized cost, which approximates value. Expenses and fees,
including the management fee and fees pursuant to the Distribution Plan and
Shareholder Services Plan, are accrued daily and taken into account for the
purpose of determining the net asset value of a Fund's shares.
Restricted securities, as well as securities or other assets for which
recent market quotations are not readily available, or are not valued by a
pricing service approved by the Board, are valued at fair value as
determined in good faith by the Board. The Board will review the method of
valuation on a current basis. In making their good faith valuation of
restricted securities, the Board members generally will take the following
factors into consideration: restricted securities which are, or are
convertible into, securities of the same class of securities for which a
public market exists usually will be valued at market value less the same
percentage discount at which purchased. This discount will be revised
periodically by the Board if the Board members believe that it no longer
reflects the value of the restricted securities. Restricted securities not
of the same class as securities for which a public market exists usually
will be valued initially at cost. Any subsequent adjustment from cost will
be based upon considerations deemed relevant by the Board.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management of the Company believes that Premier Aggressive Growth Fund
has qualified for the fiscal year ended September 30, 1995 as a "regulated
investment company" under the Code. It is expected that each other Fund
will qualify as a regulated investment company under the Code. Each Fund
intends to continue to so qualify if such qualification is in the best
interests of its shareholders. As a regulated investment company, each
Fund will pay no Federal income tax on net investment income and net
realized securities gains to the extent that such income and gains are
distributed to shareholders in accordance with applicable provisions of the
Code. To qualify as a regulated investment company, the Fund must
distribute at least 90% of its net income (consisting of net investment
income and net short-term capital gain) to its shareholders, derive less
than 30% of its annual gross income from gain on the sale of securities
held for less than three months, and meet certain asset diversification and
other requirements. The term "regulated investment company" does not imply
the supervision of management or investment practices or policies by any
government agency.
Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of the shares below the
cost of the investment. Such a dividend or distribution would be a return
of investment in an economic sense, although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of a Fund
for six months or less and has received a capital gain distribution with
respect to such shares, any loss incurred on the sale of such shares will
be treated as long-term capital loss to the extent of the capital gain
distribution received.
Depending upon the composition of a Fund's income, the entire amount
or a portion of the dividends paid by such Fund from net investment income
may qualify for the dividends received deduction allowable to qualifying
U.S. corporate shareholders ("dividends received deduction"). In general,
dividend income of a Fund distributed to qualifying corporate shareholders
will be eligible for the dividends received deduction only to the extent
that such Fund's income consists of dividends paid by U.S. corporations.
However, Section 246(c) of the Code provides that if a qualifying corporate
shareholder has disposed of Fund shares not held for 46 days or more and
has received a dividend from net investment income with respect to such
shares, the portion designated by the Fund as qualifying for the dividends
received deduction will not be eligible for such shareholder's dividends
received deduction. In addition, the Code provides other limitations with
respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding Fund shares.
A Fund may qualify for and may make an election permitted under
Section 853 of the Code so that shareholders may be eligible to claim a
credit or deduction on their Federal income tax returns for, and will be
required to treat as part of the amounts distributed to them, their pro
rata portion of qualified taxes paid or incurred by the Fund to foreign
countries (which taxes relate primarily to investment income). A Fund may
make an election under Section 853 of the Code, provided that more than 50%
of the value of the Fund's total assets at the close of the taxable year
consists of securities in foreign corporations, and the Fund satisfies the
applicable distribution provisions of the Code. The foreign tax credit
available to shareholders is subject to certain limitations imposed by the
Code.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, a portion of the gain or
loss realized from the disposition of foreign currencies (including foreign
currency denominated bank deposits) and non-U.S. dollar denominated
securities (including debt instruments and certain forward contracts and
options) may be treated as ordinary income or loss under Section 988 of the
Code. In addition, all or a portion of any gains realized from the sale or
other disposition of certain market discount bonds will be treated as
ordinary income under Section 1276 of the Code. Finally, all or a portion
of the gain realized from engaging in "conversion transactions" may be
treated as ordinary income under Section 1258 of the Code. "Conversion
transactions" are defined to include certain forward, futures, option and
straddle transactions, transactions marketed or sold to produce capital
gains, or transactions described in Treasury regulations to be issued in
the future.
Under Section 1256 of the Code, any gain or loss realized by a Fund
from certain forward contracts and options transactions will be treated as
60% long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such contracts and
options as well as from closing transactions. In addition, any such
contracts or options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value, resulting in
additional gain or loss to such Fund characterized in the manner described
above.
Offsetting positions held by a Fund involving certain foreign currency
forward contracts or options may constitute "straddles." "Straddles" are
defined to include "offsetting positions" in actively traded personal
property. The tax treatment of "straddles" is governed by Sections 1092
and 1258 of the Code, which, in certain circumstances, overrides or
modifies the provisions of Sections 1256 and 988 of the Code. As such, all
or a portion of any short or long-term capital gain from certain "straddle"
transactions may be recharacterized to ordinary income.
If a Fund were treated as entering into "straddles" by reason of its
engaging in certain forward contracts or options transactions, such
"straddles" would be characterized as "mixed straddles" if the forward
contracts or options transactions comprising a part of such "straddles"
were governed by Section 1256 of the Code. A Fund may make one or more
elections with respect to "mixed straddles." Depending on which election
is made, if any, the results to the Fund may differ. If no election is
made, to the extent the "straddle" and conversion transaction rules apply
to positions established by the Fund, losses realized by the Fund will be
deferred to the extent of unrealized gain in the offsetting position.
Moreover, as a result of the "straddle" and conversion transaction rules,
short-term capital loss on "straddle" positions may be recharacterized as
long-term capital loss, and long-term capital gains may be treated as
short-term capital gains or ordinary income.
If a Fund invests in an entity that is classified as a "passive
foreign investment company" ("PFIC") for federal income tax purposes, the
operation of certain provisions of the Code applying to PFICs could result
in the imposition of certain federal income taxes on the Fund. In
addition, gain realized from the sale or other disposition of PFIC
securities may be treated as ordinary income under Section 1291 of the
Code.
PORTFOLIO TRANSACTIONS
The Manager assumes general supervision over placing orders on behalf
of the Company for the purchase or sale of portfolio securities.
Allocation of brokerage transactions, including their frequency, is made in
the best judgment of the Manager and in a manner deemed fair and reasonable
to shareholders. The primary consideration is prompt execution of orders
at the most favorable net price. Subject to this consideration, the
brokers selected will include those that supplement the Manager's research
facilities with statistical data, investment information, economic facts
and opinions. Information so received is in addition to and not in lieu of
services required to be performed by the Manager and the Manager's fees are
not reduced as a consequence of the receipt of such supplemental
information. Such information may be useful to the Manager in serving both
the Company and other funds which it advises and, conversely, supplemental
information obtained by the placement of business of other clients may be
useful to the Manager in carrying out its obligations to the Company.
Sales of Fund shares by a broker may be taken into consideration, and
brokers also will be selected because of their ability to handle special
executions such as are involved in large block trades or broad
distributions, provided the primary consideration is met. Large block
trades may, in certain cases, result from two or more funds advised or
administered by the Manager being engaged simultaneously in the purchase or
sale of the same security. Certain of the Funds' transactions in
securities of foreign issuers may not benefit from the negotiated
commission rates available to the Funds for transactions in securities of
domestic issuers. When transactions are executed in the over-the-counter
market, each Fund will deal with the primary market makers unless a more
favorable price or execution otherwise is obtainable. Foreign exchange
transactions are made with banks or institutions in the interbank market at
prices reflecting a mark-up or mark-down and/or commission.
Portfolio turnover may vary from year to year as well as within a
year. It is anticipated that in any fiscal year the turnover rate of
Premier Aggressive Growth Fund and Premier Growth and Income Fund generally
should not exceed 150%. In periods in which extraordinary market
conditions prevail, the Manager will not be deterred from changing a Fund's
investment strategy as rapidly as needed, in which case higher turnover
rates can be anticipated which would result in greater brokerage expenses.
The overall reasonableness of brokerage commissions paid is evaluated by
the Manager based upon its knowledge of available information as to the
general level of commissions paid by other institutional investors for
comparable services.
In connection with its portfolio securities transactions for the
fiscal years ended September 30, 1993, 1994 and 1995, Premier Aggressive
Growth Fund paid total brokerage commissions of $1,050,842, $1,406,201 and
$2,535,450, respectively. These amounts do not include gross spreads and
concessions in connection with principal transactions which, where
determinable, totalled $1,099,649, $609,493 and $365,417 for the fiscal
years ended September 30, 1993, 1994 and 1995, respectively. None of the
aforementioned amounts were paid to the Distributor. The increase in
brokerage commissions in fiscal 1995 resulted from an increase in trading
activity to take advantage of favorable market conditions.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled
"Performance Information."
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum
offering price in the case of Class A) per share with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result. A Class'
average annual total return figures calculated in accordance with such
formula assume that in the case of Class A the maximum sales load has been
deducted from the hypothetical initial investment at the time of purchase
or in the case of Class B or Class C the maximum applicable CDSC has been
paid upon redemption at the end of the period.
For the 1, 5 and 10 year period ended March 31, 1996, the average
annual total return for the Class A shares of Premier Aggressive Growth
Fund was 7.72%, 7.96% and 9.27%, respectively.
Total return is calculated by subtracting the amount of the Fund's net
asset value (maximum offering price in the case of Class A) per share at
the beginning of a stated period from the net asset value (maximum offering
price in the case of Class A) per share at the end of the period (after
giving effect to the reinvestment of dividends and distributions during the
period and any applicable CDSC), and dividing the result by the net asset
value (maximum offering price in the case of Class A) per share at the
beginning of the period. Total return also may be calculated based on the
net asset value per share at the beginning of the period instead of the
maximum offering price per share at the beginning of the period for Class A
shares or without giving effect to any applicable CDSC at the end of the
period for Class B or Class C shares. In such cases, the calculation would
not reflect the deduction of the sales load with respect to Class A shares
or any applicable CDSC with respect to Class B or Class C shares, which, if
reflected, would reduce the performance quoted.
The total return for a Class A share of Premier Aggressive Growth Fund
for the period June 23, 1969 (commencement of operations) through March 31,
1996 was 1528.66% based on maximum offering price and 1605.53% based on net
asset value. The total return for a Class B, Class C and Class R share of
each Fund for the period December 29, 1995 (commencement of initial public
offering) through March 31, 1996, were as follows:
Based on Net of
Premier Capital Growth Fund Net Asset Value Applicable Sales Load
Class B 2.90% -1.10%
Class C 2.90% 1.90%
Class R 3.17% N/A
Premier Growth and Income Fund
Class B 30.02% 26.02%
Class C 30.08% 29.08%
Class R 30.54% N/A
From time to time, advertising material for a Fund may include
biographical information relating to one or more of its portfolio managers
and may refer to, or include commentary by a portfolio manager relating to
investment strategy, asset growth, current or past business, political,
economic or financial conditions and other matters of general interest to
investors. In addition, from time to time, the Company may compare a
Fund's performance against inflation with the performance of other
instruments against inflation, such as short-term Treasury Bills (which are
direct obligations of the U.S. Government) and FDIC-insured bank money
market accounts. Advertising materials for a Fund also may refer to
Morningstar ratings and related analyses supporting the ratings.
INFORMATION ABOUT THE FUNDS
The following information supplements and should be read in
conjunction with the section in each Fund's Prospectus entitled "General
Information."
Premier Aggressive Growth Fund is the oldest Dreyfus fund managed for
growth of capital which has the ability to use investment techniques such
as leverage, short-selling and options transactions.
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares have no preemptive or subscription rights and
are freely transferable.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an
investment company, such as the Company, will not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each series affected by such matter. Rule 18f-2
further provides that a series shall be deemed to be affected by a matter
unless it is clear that the interests of each series in the matter are
identical or that the matter does not affect any interest of such series.
However, the Rule exempts the selection of independent accountants and the
election of Board members from the separate voting requirements of the
Rule.
Each Fund will send annual and semi-annual financial statements to all
its shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN, COUNSEL
AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, is
located at P.O. Box 9671, Providence, Rhode Island 02940-9671, and serves
as the Company's transfer and dividend disbursing agent. Under a transfer
agency agreement with the Fund, the Transfer Agent arranges for the
maintenance of shareholder account records for the Fund, the handling of
certain communications between shareholders and the Fund and the payment of
dividends and distributions payable by the Fund. For these services, the
Transfer Agent receives a monthly fee computed on the basis of the number
of shareholder accounts its maintenance for the Funds during the month, and
is reimbursed for certain out-of-pocket expenses. Mellon Bank, N.A, the
Manager's parent, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258,
serves as Custodian for each Fund. Neither the Transfer Agent nor The Bank
of New York has any part in determining the investment policies of each
Fund or which securities are to be purchased or sold by a Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Company, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance of
the shares being sold pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Company.
APPENDIX
Description of S&P, Moody's, Fitch and Duff ratings:
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds in
higher rated categories.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B
Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default
and are dependent upon favorable business, financial and economic
conditions to meet timely payments of interest and repayment of principal.
In the event of adverse business, financial or economic conditions, they
are not likely to have the capacity to pay interest and repay principal.
S&P's letter ratings may be modified by the addition of a plus (+) or
a minus (-) sign designation, which is used to show relative standing
within the major rating categories, except in the AAA (Prime Grade)
category.
Commercial Paper Rating
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. Issues assigned an A rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.
A-3
Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and generally are referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and, therefore, not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and
in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations.
The effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and the requirements
for relatively high financial leverage. Adequate alternate liquidity is
maintained.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the AAA category covering 12-36
months.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations in
a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because
of economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment. There may
be considerable variability in risk for bonds in this category during
economic cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial
protection factors fluctuate according to industry conditions or company
fortunes. Overall quality may move up or down frequently within the
category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating
within this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such
bonds may be in default or have considerable uncertainty as to timely
payment of interest, preferred dividends and/or principal. Protection
factors are narrow and risk can be substantial with unfavorable economic or
industry conditions and/or with unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating
category.
Commercial Paper Rating
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by
ample asset protection. Risk factors are minor. Paper rated Duff-2 is
regarded as having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals. Risk factors
are small.
<TABLE>
<CAPTION>
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1995
COMMON STOCKS-99.7% SHARES VALUE
-------------- --------------
<S> <C> <C>
CONSUMER DURABLES-4.1%........... Ford Motor............................ 750,000 $ 23,343,750
------------
CONSUMER Philip Morris Cos..................... 320,000 26,720,000
NON-DURABLES-6.3%................. ThermoLase............................ 450,000 (a) 9,168,750
------------
35,888,750
------------
CONSUMER SERVICES-2.0%............ TCA Cable TV........................... 400,000 11,500,000
------------
ENERGY-9.8%....................... Anadarko Petroleum..................... 300,000 14,212,500
Baker Hughes........................... 400,000 8,150,000
Burlington Resources................... 300,000 11,625,000
Global Marine.......................... 579,500 (a) 4,128,938
Triton Energy.......................... 375,000 18,140,625
------------
56,257,063
------------
FINANCE-13.5%..................... ACE Limited............................ 370,000 12,718,750
CNA Financial.......................... 127,000 (a) 13,462,000
First Interstate Bancorp............... 170,000 (b) 17,127,500
MGIC Investment........................ 100,000 5,725,000
Reliance Group Holdings................ 550,000 4,193,750
St. Paul Cos........................... 150,000 8,756,250
20th Century Industries................ 350,000 (a) 5,381,250
USF&G.................................. 500,000 9,687,500
------------
77,052,000
------------
HEALTH CARE-14.3%................. Biogen................................. 250,000 (a) 15,000,000
Forest Labs............................ 260,000 (a) 11,570,000
Guidant................................ 175,986 5,147,590
IVAX................................... 400,000 12,050,000
Lilly (Eli)............................ 99,574 8,949,213
Northstar Health Services.............. 200,000 (a) 1,475,000
ONCOR.................................. 532,500 (a) 3,960,469
Teva Pharmaceutical Industries, A.D.R.. 650,000 23,481,250
------------
81,633,522
------------
NON-ENERGY MINERALS-3.7%.......... AK Steel Holding....................... 400,000 (a) 11,800,000
Inland Steel Industries................ 400,000 9,100,000
------------
20,900,000
------------
PROCESS INDUSTRIES-6.5%........... Crown Cork & Seal...................... 325,000 (a) 12,593,750
Grace (W.R.)........................... 150,000 10,012,500
Raychem................................ 325,000 14,625,000
------------
37,231,250
------------
PRODUCER Advanced Photonix, Cl. A............... 425,000 (a) 1,062,500
MANUFACTURING-5.6%................ American Standard...................... 375,000 11,062,500
Xerox.................................. 150,000 20,156,250
------------
32,281,250
------------
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
RETAIL TRADE-2.3% Federated Department Stores.............. 325,000 (a) $ 9,221,875
Sears, Roebuck........................... 100,000 3,687,500
------------
12,909,375
------------
TECHNOLOGY-21.8%............ Applied Materials........................ 60,000 (a) 6,135,000
Cisco Systems............................ 300,000 (a) 20,700,000
Compaq Computer.......................... 75,000 (a) 3,628,125
Computer Associates International........ 170,000 7,182,500
Cree Research............................ 485,000 (a) 12,003,750
Digital Equipment........................ 300,000 (a) 13,687,500
Informix................................. 325,000 (a) 10,562,500
LSI Logic................................ 250,000 (a) 14,437,500
MEMC Electronic Materials................ 200,000 5,425,000
Micron Technology........................ 250,000 19,875,000
Storage Technology....................... 450,000 (a) 11,025,000
------------
124,661,875
------------
TRANSPORTATION-2.9%......... Alaska Air Group........................ 400,000 (a) 6,250,000
Kansas City So. Ind..................... 225,000 10,237,500
------------
16,487,500
------------
UTILITIES-2.9%.............. AMNEX................................... 635,000 (a) 3,214,687
AT&T.................................... 210,000 13,807,500
------------
17,022,187
------------
FOREIGN-4.0%.................
Abitibi-Price........................... 305,000 5,299,375
News Corp, A.D.R........................ 307,000 6,754,000
Roche Holding A.G....................... 750 5,289,541
Trafalgar House PLC..................... 12,800,000 5,693,400
------------
23,036,316
------------
TOTAL COMMON STOCKS
(cost $536,141,292).................. $570,204,838
==============
PRINCIPAL
SHORT-TERM INVESTMENTS-.4% AMOUNT
--------------
U.S. TREASURY BILLS:......... 5.90%,10/5/1995 $ 830,000 $ 829,411
5.72%,10/19/1995....................... 112,000 111,690
5.75%,10/26/1995....................... 10,000 9,963
5.84%,11/2/1995........................ 21,000 20,899
6.15%,11/16/1995....................... 1,372,000 1,362,492
----------
TOTAL SHORT-TERM INVESTMENTS
(cost $2,334,787).................... $ 2,334,455
=============
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
STATEMENT OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1995
TOTAL INVESTMENTS (cost $538,476,079) .................................... 100.1% $572,539,293
======== ============
LIABILITIES, LESS CASH AND RECEIVABLES..................................... (.1%) $ (461,824)
======== ============
NET ASSETS................................................................. 100.0% $572,077,469
======== ============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security subject to call option written.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF COVERED CALL OPTIONS WRITTEN SEPTEMBER 30, 1995
SHARES
SUBJECT CALL
TO CALL SECURITY EXPIRATION PRICE VALUE
- ------- --------- ---------- ------ ---------
<S> <C> <C> <C> <C>
85,000 First Interstate Bancorp October 95 100 $255,000
85,000 First Interstate Bancorp October 95 105 95,625
----------
$350,625
=========
</TABLE>
NOTE TO STATEMENT OF COVERED CALL OPTIONS WRITTEN;
(a) The above options were written against portfolio securities of the
Fund. As of September 30,1995, these securities had an aggregate market
value of $17,127,500.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $538,476,079)-see statement..................................... $572,539,293
Cash.................................................................... 685,519
Receivable for investment securities sold............................... 9,193,443
Dividends and interest receivable....................................... 1,140,886
Prepaid expenses........................................................ 46,502
-----------
583,605,643
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 363,360
Payable for investment securities purchased............................. 9,152,147
Payable for Common Stock redeemed....................................... 919,799
Outstanding call options written, at value
(premiums received $462,384)-see statement............................ 350,625
Net unrealized depreciation on forward currency exchange
contracts-Note 4(a)................................................... 287,765
Accrued expenses........................................................ 454,478 11,528,174
----------- -----------
NET ASSETS ................................................................ $572,077,469
============
REPRESENTED BY:
Paid-in capital......................................................... $490,413,061
Accumulated undistributed investment income-net......................... 1,801,170
Accumulated undistributed net realized gain on investments.............. 45,976,205
Accumulated net unrealized appreciation on investments, call
options written and foreign currency transactions..................... 33,887,033
-----------
NET ASSETS at value applicable to 35,078,761 outstanding shares of
Common Stock, equivalent to $16.31 per share (100 million shares
of $1 par value authorized)............................................. $572,077,469
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest.............................................................. $ 12,006,227
Cash dividends (net of $53,732 foreign taxes withheld at source)...... 8,921,322
-----------
TOTAL INCOME...................................................... $20,927,549
EXPENSES:
Management fee-Note 3(a).............................................. 4,287,150
Shareholder servicing costs-Note 3(b)................................. 1,300,803
Interest-Note 2....................................................... 288,421
Loan commitment fees-Note 2........................................... 162,353
Custodian fees........................................................ 139,588
Directors' fees and expenses-Note 3(c)................................ 70,306
Professional fees..................................................... 55,092
Prospectus and shareholders' reports.................................. 37,666
Dividends on securities sold short.................................... 3,000
Miscellaneous......................................................... 3,832
----------
TOTAL EXPENSES.................................................... 6,348,211
-----------
INVESTMENT INCOME-NET............................................. 14,579,338
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) on investments-Note 4(a):
Long transactions (including options transactions).................... $ 58,593,573
Short sale transactions............................................... (452,115)
Net realized gain on foreign currency transactions...................... 116,125
Net realized (loss) on forward currency exchange contracts-Note 4(a);
Short transactions.................................................... (4,525,904)
Net realized (loss) on financial futures-Note 4(a):
Long transactions..................................................... 1,115,194
Short transactions.................................................... (15,432,180)
------------
NET REALIZED GAIN..................................................... 39,414,693
Net unrealized appreciation:
Investments and forward currency exchange contracts [including
($85,750) net unrealized (depreciation) on financial futures]......... 6,873,986
Translation of assets and liabilities in foreign currencies........... (175)
----------
NET UNREALIZED APPRECIATION........................................... 6,873,811
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 46,288,504
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $60,867,842
===========
See notes to financial statements.
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-----------------------------------
1994 1995
--------------- ---------------
OPERATIONS:
Investment income-net................................................... $ 12,639,315 $ 14,579,338
Net realized gain on investments........................................ 20,591,445 39,414,693
Net unrealized appreciation (depreciation) on investments for the year.. (41,885,909) 6,873,811
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... (8,655,149) 60,867,842
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net................................................... (26,079,930) (16,111,729)
Net realized gain on investments........................................ (72,371,864) (8,422,040)
--------------- ---------------
TOTAL DIVIDENDS....................................................... (98,451,794) (24,533,769)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 250,776,376 82,126,165
Dividends reinvested.................................................... 88,813,669 21,932,842
Cost of shares redeemed................................................. (258,491,934) (138,675,507)
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..... 81,098,111 (34,616,500)
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... (26,008,832) 1,717,573
NET ASSETS:
Beginning of year....................................................... 596,368,728 570,359,896
--------------- ---------------
End of year [including undistributed investment income-net:
$3,333,561 in 1994 and $1,801,170 in 1995]............................ $ 570,359,896 $ 572,077,469
============= ==============
SHARES SHARES
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 14,069,123 5,218,666
Shares issued for dividends reinvested.................................. 5,561,247 1,526,294
Shares redeemed......................................................... (14,647,204) (8,826,816)
--------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... 4,983,166 (2,081,856)
============= ==============
See notes to financial statements.
</TABLE>
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus
dated January 8, 1996 as revised December 1, 1996.
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares. The Distributor, located at One Exchange Place, Boston, Massachusetts
02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a
provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc. The Dreyfus Corporation ("Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A.
On April 5, 1995, the Fund's directors approved a change of the Fund's
name, effective June 16, 1995, from "Dreyfus Leverage Fund, Inc.," which was
operating under the name "Dreyfus Capital Growth Fund, Inc.", to "Premier
Capital Growth Fund, 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.
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) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, 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 at fiscal year end, 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 discounts on investments, is recognized on
the accrual basis.
(D) 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.
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 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. 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 as of September 30, 1995.
The average daily amount of short-term debt outstanding during the year
ended September 30, 1995 was approximately $4,274,000, with a related
weighted average annualized interest rate of 6.75% (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, 1995, was $76 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 .75 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, 1995.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $58,571 during the year ended September 30, 1995 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 certain allocated
expenses of providing personal services and/or maintaining 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,
1995, the Fund was charged an aggregate of $647,159 pursuant to the
Shareholder Services Plan.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 1995 is summarized as follows:
PURCHASES SALES
------------------- ----------------
Long transactions............. $1,303,960,488 $1,271,973,806
Short sale transactions....... 6,508,333 6,056,218
------------------- ----------------
TOTAL....................... $1,310,468,821 $1,278,030,024
================== ===============
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. There were no securities sold short outstanding as of September 30,
1995.
In addition, the following summarizes open forward currency exchange
contracts at September 30, 1995:
<TABLE>
<CAPTION>
U.S. DOLLAR
VALUE AT UNREALIZED
FORWARD CURRENCY SALE CONTRACTS PROCEEDS 9/30/95 (DEPRECIATION)
- -------------------------------- --------- ----------- ----------------
<S> <C> <C> <C>
Swiss Francs, expiring 11/29/95................ $ 4,718,712 $ 4,927,233 $ (208,521)
British Pounds, expiring 12/20/95.............. 10,801,300 10,880,544 (79,244)
--------------
$ (287,765)
==============
</TABLE>
The Fund enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. When executing forward currency exchange
contracts, the Fund is obligated to buy or sell a foreign currency at a
specified rate on a certain date in the future. With respect to sales of
forward currency exchange contracts, the Fund would incur a loss if the value
of the contract increases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to
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. The Fund is
also exposed to credit risk associated with counter party nonperformance on
these forward currency exchange contracts which is typically limited to the
unrealized gains on such contracts that are recognized in the statement of
assets and liabilities.
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In addition, the following summarizes the Fund's covered call options
written transactions for the year ended September 30,
1995:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ---------
OPTIONS WRITTEN:
Contracts outstanding September 30, 1994......... - -
Contracts written................................ 1,700 $462,384
--------- ---------
Contracts outstanding September 30, 1995......... 1,700 $462,384
========= =========
The Fund may write or (sell) options in order to gain exposure to or
protect against changes in the market. As a writer of call 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 premium,
if the price of the underlying financial instrument decreases 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 increases between those dates.
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 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.
At September 30, 1995, there were no financial futures contracts outstanding.
(B) At September 30, 1995, accumulated net unrealized appreciation on
investments was $33,887,208, consisting of $61,623,792 gross unrealized
appreciation and $27,736,584 gross unrealized depreciation, excluding foreign
currency translations.
At September 30, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
PREMIER CAPITAL GROWTH FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Premier Capital Growth Fund, Inc., including the statements of investments
and covered call options written as of September 30, 1995, and the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended, and financial
highlights for each of the years indicated therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1995 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Capital Growth Fund, Inc. at September 30, 1995, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
November 7, 1995
<TABLE>
<CAPTION>
PREMIER CAPITAL GROWTH FUND
STATEMENT OF INVESTMENTS MARCH 31, 1996 (UNAUDITED)
COMMON STOCKS-107.6% SHARES VALUE
_______ _______
<S> <C> <C>
COMMERCIAL SERVICES-.9% Quintel Entertainment................. 450,000 (a) $ 5,062,500
______
CONSUMER DURABLES-4.8% Ford Motor............................ 750,000 25,781,250
______
CONSUMER
NON-DURABLES-8.8% Philip Morris Cos...................... 250,000 21,937,500
Quicksilver............................ 150,000 (a) 4,762,500
ThermoLase............................. 150,000 3,637,500
Tommy Hilfiger......................... 250,000 (a) 11,468,750
Vista 2000............................. 500,000 (a) 5,000,000
______
46,806,250
______
CONSUMER SERVICES-9.4% Alliance Entertainment................. 400,000 (a) 3,750,000
Casino Data Systems.................... 670,000 (a) 11,390,000
IDEON Group............................ 412,900 4,593,513
Metromedia International Group......... 1,450,000 (a) 19,575,000
TCA Cable TV........................... 375,000 10,921,875
______
50,230,388
______
ELECTRONIC
TECHNOLOGY-21.4% Advanced Photonix, Cl. A............... 515,000 1,512,813
Bay Networks........................... 350,000 (a) 10,762,500
C-Cube Microsystems.................... 175,000 (a) 9,187,500
Cisco Systems.......................... 560,000 25,970,000
Cree Research.......................... 575,000 8,768,750
Digital Equipment...................... 200,000 11,025,000
Gilat Satellite Networks............... 107,000 (a) 2,594,750
Seagate Technology..................... 475,000 (a) 26,006,250
Storage Technology..................... 700,000 18,287,500
______
114,115,063
______
ENERGY MINERALS-1.9% Anadarko Petroleum..................... 100,000 5,550,000
NorAm Energy........................... 500,000 4,625,000
______
10,175,000
______
FINANCE-6.8% ACE Limited............................ 320,000 14,280,000
ASTA Funding........................... 150,000 (a) 712,500
CNA Financial.......................... 60,000 6,675,000
MGIC Investment........................ 45,000 2,452,500
National Auto Credit................... 190,000 (a) 2,873,750
20th Century Industries................ 350,000 5,862,500
Titan.................................. 250,000 3,437,500
______
36,293,750
______
HEALTH SERVICES-1.4% Complete Management.................... 350,000 (a) 2,931,250
Northstar Health Services.............. 235,000 690,312
OnGard Systems......................... 200,000 (a) 1,450,000
PREMIER CAPITAL GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1996 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
HEALTH SERVICES (CONTINUED)......... OncorMed 364,000 (a) $ 2,320,500
______
7,392,062
______
HEALTH TECHNOLOGY-24.1% Biogen................................. 175,000 10,412,500
Cephalon............................... 175,000 (a) 4,528,125
Forest Labs............................ 500,000 24,375,000
Fuisz Technologies..................... 800,000 (a) 21,600,000
Gilead Sciences........................ 450,000 (a) 12,937,500
Guidant................................ 175,986 9,525,242
Guilford Pharmaceuticals............... 150,000 (a) 3,356,250
Lilly (Eli)............................ 100,000 6,500,000
MacroChem.............................. 662,500 (a) 3,726,562
NeoPharm............................... 100,000 (a) 1,162,500
ONCOR.................................. 800,000 4,300,000
Teva Pharmaceutical Industries, A.D.R.. 680,000 26,180,000
______
128,603,679
______
INDUSTRIAL SERVICES-1.1% Global Marine.......................... 579,500 5,795,000
______
PROCESS INDUSTRIES-6.4% Chromatics Color Sciences 155,000 (a) 1,269,063
Grace (W.R.)........................... 200,000 15,650,000
Morton International................... 450,000 17,268,750
______
34,187,813
______
PRODUCER
MANUFACTURING-11.2% American Standard...................... 200,000 (a) 5,850,000
Motorcar Parts & Accessories........... 250,000 (a) 3,937,500
Olin................................... 300,000 26,100,000
Raychem................................ 375,000 24,187,500
______
60,075,000
______
RETAIL TRADE-2.0% Federated Department Stores 325,000 10,481,250
______
TECHNOLOGY SERVICES-6.4% Informix............................... 700,000 18,462,500
Mercury Interactive.................... 795,000 (a) 12,720,000
Sterling Commerce...................... 100,000 (a) 3,075,000
______
34,257,500
______
UTILITIES-.6% AMNEX.................................. 800,000 3,150,000
______
FOREIGN-.4% Cinar Films, Cl. B..................... 150,000 (a) 2,250,000
______
TOTAL COMMON STOCKS
(cost $518,336,702).................. $574,656,505
=======
PREMIER CAPITAL GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1996 (UNAUDITED)
PRINCIPAL
SHORT-TERM INVESTMENTS-.0% AMOUNT VALUE
_______ _______
U.S. TREASURY BILLS; 5.32%, 4/11/96
(cost $ 14,979)...................... $ 15,000 $ 14,974
=======
TOTAL INVESTMENTS (cost $518,351,681) ................................ 107.6% $574,671,479
====== =======
LIABILITIES, LESS CASH AND RECEIVABLES (7.6%) $ (40,541,046)
====== =======
NET ASSETS.................................................................. 100.0% $534,130,433
====== =======
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See independent accountants' review report and notes to financial statements.
PREMIER CAPITAL GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1996 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $518,351,681)-see statement..................................... $574,671,479
Cash.................................................................... 603,157
Receivable for investment securities sold............................... 1,567,496
Dividends and interest receivable....................................... 344,061
Receivable for subscriptions to Common Stock............................ 493
Prepaid expenses........................................................ 54,160
______
577,240,846
LIABILITIES:
Due to The Dreyfus Corporation and subsidiaries......................... $ 355,719
Due to Distributor...................................................... 114,023
Bank loans payable-Note 2............................................... 31,000,000
Payable for investment securities purchased............................. 9,622,150
Payable for Common Stock redeemed....................................... 1,453,512
Loan committment fees and interest payable.............................. 230,091
Accrued expenses........................................................ 334,918 43,110,413
______ ______
NET ASSETS ................................................................ $534,130,433
=======
REPRESENTED BY:
Paid-in capital......................................................... $486,194,730
Accumulated investment (loss)-net....................................... (966,239)
Accumulated net realized (loss) on investments.......................... (7,417,856)
Accumulated net unrealized appreciation on investments-Note 4(b)........ 56,319,798
______
NET ASSETS at value......................................................... $534,130,433
=======
Shares of Common Stock outstanding:
Class A Shares
(200 million shares of $1.00 par value authorized).................... 34,913,016
=======
Class B Shares
(200 million shares of $1.00 par value authorized).................... 67
=======
Class C Shares
(200 million shares of $1.00 par value authorized).................... 67
=======
Class R Shares
(200 million shares of $1.00 par value authorized).................... 67
=======
NET ASSET VALUE per share:
Class A Shares
($534,127,361 / 34,913,016 shares).................................... $15.30
=======
Class B Shares
($1,023 / 67 shares).................................................. $15.27
=======
Class C Shares
($1,023 / 67 shares).................................................. $15.27
=======
Class R Shares
($1,026 / 67 shares).................................................. $15.31
=======
See independent accountants' review report and notes to financial statements.
PREMIER CAPITAL GROWTH FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $19,179 foreign taxes withheld at source)...... $ 2,296,000
Interest.............................................................. 268,787
_____
TOTAL INCOME...................................................... $ 2,564,787
EXPENSES:
Management fee-Note 3(a).............................................. 2,074,158
Shareholder servicing costs-Note 3(c)................................. 761,240
Interest-Note 2....................................................... 425,300
Loan commitment fees-Note 2........................................... 63,338
Professional fees..................................................... 48,424
Directors' fees and expenses-Note 3(d)................................ 42,576
Custodian fees........................................................ 35,979
Prospectus and shareholders' reports.................................. 35,720
Miscellaneous......................................................... 1,827
_____
TOTAL EXPENSES.................................................... 3,488,562
______
INVESTMENT (LOSS)-NET............................................. (923,775)
______
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments (including options transactions)-Note 4(a) $(7,459,073)
Net realized (loss) on forward currency exchange contracts-Note 4(a);
Short transactions.................................................... (157,429)
_____
NET REALIZED (LOSS)................................................... (7,616,502)
Net unrealized appreciation on investments.............................. 22,432,765
______
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 14,816,263
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $13,892,488
======
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CAPITAL GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31, 1996
1995 (UNAUDITED)
_______ _________
<S> <C> <C>
OPERATIONS:
Investment income (loss)-net....................................... $ 14,579,338 $ (923,775)
Net realized gain (loss) on investments............................ 39,414,693 (7,616,502)
Net unrealized appreciation on investments for the period.......... 6,873,811 22,432,765
________ _______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......... 60,867,842 13,892,488
________ _______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net;
Class A shares................................................... (16,111,729) (9,496,919)
Net realized gain on investments;
Class A shares................................................... (8,422,040) (38,124,274)
________ _______
TOTAL DIVIDENDS.............................................. (24,533,769) (47,621,193)
________ _______
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares................................................... 82,126,165 60,567,189
Class B shares................................................... -- 1,000
Class C shares................................................... -- 1,000
Class R shares................................................... -- 1,000
Dividends reinvested;
Class A shares................................................... 21,932,842 42,441,955
Cost of shares redeemed;
Class A shares................................................... (138,675,507) (107,230,475)
________ _______
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..... (34,616,500) (4,218,331)
________ _______
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 1,717,573 (37,947,036)
NET ASSETS:
Beginning of period................................................ 570,359,896 572,077,469
________ _______
End of period [including undistributed investment income-net;
$1,801,170 in 1995 and accumulated investment (loss)-net
of ($966,239) in 1996.].......................................... $ 572,077,469 $ 534,130,433
======== =======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER CAPITAL GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
SHARES
_____________________________________________________
CLASS A CLASS B
-------------------------------------- ----------
YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
SEPTEMBER 30, MARCH 31, 1996 MARCH 31, 1996*
1995 (UNAUDITED) (UNAUDITED)
________ ________ ________
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold.............................. 5,218,666 3,890,547 67
Shares issued for dividends reinvested... 1,526,294 2,844,634 --
Shares redeemed.......................... (8,826,816) (6,900,926) --
_____ _____ _____
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING................. (2,081,856) (165,745) 67
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------------------------------------------
CLASS C CLASS R
________ ________
PERIOD ENDED PERIOD ENDED
MARCH 31, 1996* MARCH 31, 1996*
(UNAUDITED) (UNAUDITED)
________ ________
CAPITAL SHARE TRANSACTIONS:
<S> <C> <C>
Shares sold.............................. 67 67
Shares issued for dividends reinvested... -- --
Shares redeemed.......................... -- --
_____ _____
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING................. 67 67
====== ======
*From January 3, 1996 (commencement of initial offering) to March 31,
1996.
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CAPITAL GROWTH 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 the Fund's financial statements.
CLASS A CLASS B CLASS C CLASS R
---------------------------------------------------- ------ ------ ------
SIX MONTHS PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
YEAR ENDED SEPTEMBER 30, 1996 1996(1) 1996(1) 1996(1)
_________________________________________
PER SHARE DATA: 1991 1992 1993 1994 1995 (UNAUDITED) (UNAUDITED) (UNAUDITED (UNAUDITED)
---- ---- ---- ---- ---- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period............. $14.31 $17.72 $18.11 $18.53 $15.35 $16.31 $14.84 $14.84 $14.84
___ ___ ___ ___ ___ ___ ___ ___ ___
INVESTMENT OPERATIONS:
Investment income (loss)-net .37 .32 .21 .40 .40 (.02) (.05) (.05) (.02)
Net realized and unrealized gain
(loss) on investments. 3.80 1.83 1.82 (.56) 1.23 .41 .48 .48 .49
___ ___ ___ ___ ___ ___ ___ ___ ___
TOTAL FROM INVESTMENT
OPERATIONS........ 4.17 2.15 2.03 (.16) 1.63 .39 .43 .43 .47
___ ___ ___ ___ ___ ___ ___ ___ ___
DISTRIBUTIONS:
Dividends from investment
income-net............ (.76) (.39) (.24) (.80) (.44) (.28) -- -- --
Dividends from net realized
gain on investments... -- (1.37) (1.37) (2.22) (.23) (1.12) -- -- --
___ ___ ___ ___ ___ ___ ___ ___ ___
TOTAL DISTRIBUTIONS... (.76) (1.76) (1.61) (3.02) (.67) (1.40) -- -- --
___ ___ ___ ___ ___ ___ ___ ___ ___
Net asset value, end of period $17.72 $18.11 $18.53 $15.35 $16.31 $15.30 $15.27 $15.27 $15.31
=== === === === === === === === ===
TOTAL INVESTMENT
RETURN(2)............... 30.27% 13.28% 12.04% (1.50%) 11.21% 2.57%(3) 2.90%(3) 2.90%(3) 3.17%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to
average net assets.... .97% .97% 1.02% 1.03% 1.03% .54%(3) .44%(3) .44%(3) .20%(3)
Ratio of interest expense, loan
committment fees and
dividends on securities sold
short to average net assets .17% .10% .04% .09% .08% .09%(3) .09%(3) .09%(3) .09%(3)
Ratio of net investment income
(loss) to average net assets 2.13% 1.74% 1.24% 2.10% 2.55% (.17%)(3) (.35%)(3) (.35%)(3) (.11%)(3)
Portfolio Turnover Rate. 81.02% 141.67% 102.23% 158.05% 298.60% 68.91%(3) 68.91%(3) 68.91%(3) 68.91%(3)
Average commission rate paid $.0345 $.0345 $.0345 $.0345
Net Assets, end of period
(000's Omitted)....... $494,342 $520,895 $596,369 $570,360 $572,077 $534,127 $1 $1 $1
(1) From January 3, 1996 (commencement of initial offering) to March 31, 1996.
(2) Exclusive of sales charges.
(3) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
PREMIER CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Equity Fund's, Inc., (the "Company") is registered under the
Investment Company Act of 1940 ("Act") as a diversified
open-end management investment company and operates as a series company
currently offering two series, including the Premier Capital Growth Fund (the
"Fund"). The Fund's investment objective is capital growth. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A.
The Company accounts separately for the assets, liabilities and
operations of each fund. Expenses directly attributable to each fund are
charged to that fund's operations; expenses which are applicable to all funds
are allocated among them on a pro rata basis.
On January 2, 1996, the Company's Board of Directors approved a change of
the Company's name, effective, from "Premier Capital Growth Fund, Inc." to
"Premier Equity Fund's, Inc." and to rename the existing Fund Premier Capital
Growth Fund.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund offers Class A, Class B, Class C
and Class R shares. Class A shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred
sales charge imposed at the time of redemption made within six years of
purchase, Class C shares are subject to a contingent deferred sales charge
imposed at the time of redemption on redemptions made within one year of
purchase and Class R shares are sold at net asset value per share only to
institutional investors. Other differences between the four Classes include
the services offered to and the expenses borne by each Class and certain
voting rights.
(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.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Forward currency exchange contracts are
valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
PREMIER CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain
and loss from securities transactions are recorded on the identified cost
basis. Dividend income is recognized on the ex-dividend date and interest
income, including, where applicable, amortization of discount on investments,
is recognized on the accrual basis.
(D) 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.
(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 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. 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, 1996 under the line of credit,
amounted to $31 million, at an annualized interest rate of 6.78%.
The average daily amount of short-term debt outstanding during the six
months ended March 31, 1996 was approximately $13.1 million, with a related
weighted average annualized interest rate of 6.49% (based upon actual
interest expense, not including commitment fees, for the period). The maximum
amount of such debt outstanding at any time during the six months ended March
31, 1996, was $52.7 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 .75 of 1% of the value
of the Fund's average daily 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, with respect to Class A exceed 1 1/2%
of the average value of the Fund's net assets, attributable to Class A
shares, for any full fiscal year and with respect to the other Classes of the
Fund, the expense limitation of any state having jurisdiction over the Fund.
No expense reimbursement was required for the six months ended March 31,
1996.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $12,424 during the six months ended March 31, 1996 from commissions
earned on sales of Fund shares.
PREMIER CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(B) Effective January 3, 1996, the Fund adopted a Distribution Plan,
pursuant to Rule 12b-1 under the Act, to which it pays
the Distributor for distributing the Fund's Class B and Class C shares at an
annual rate of .75 of 1% of the value of the average daily net assets of
Class B and Class C shares, respectively. For the period ended March 31,
1996, $2 was charged to the Fund for the Class B shares and $2 was charged to
the Fund for the Class C shares.
(C) On January 2, 1996, the Fund adopted a Shareholder Services Plan,
pursuant to which it pays a fee to the Distributor, for the provision of
certain services to Fund shareholders at the annual rate of .25 of 1% of the
value of the average daily net assets of Class A, Class B and Class C shares,
respectively. 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. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. For the period ended March 31, 1996,
$341,487 was charged to Class A shares and for the period January 3, 1996
through March 31, 1996, no amounts were charged to Class B and Class C
shares, respectively, by the Distributor pursuant to the Shareholder Services
Plan.
Prior to January 2, 1996, the Fund's Shareholder Services Plan provided
for the Fund to reimburse 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 certain allocated expenses of providing personal services and/or
maintaining 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. For the period
October 1, 1995 through January 1, 1996, the Fund was charged an aggregate of
$158,335 pursuant to the Shareholders Services Plan.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of the Manager, under a transfer agency agreement
for providing personnel and facilities to perform transfer agency services
for the Fund. Such compensation amounted to $118,515 for the period from
December 1, 1995 through March 31, 1996.
(D) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $4,500 and an attendance fee of
$500 per meeting. The Chairman of the Board receives an additional 25% of
such compensation.
NOTE 4-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short term securities, forward currency exchange contracts and
options transactions, during the six months ended March 31, 1996 amounted to
$394,050,257 and $409,116,001, respectively.
The Fund enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. When executing forward currency
PREMIER CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
exchange contracts, the Fund is obligated to buy or sell a foreign currency
at a specified rate on a certain date in the future. With respect to sales of
forward currency exchange contracts, the Fund would incur a loss if the value
of the contract increases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to purchase
of forward currency exchange contracts, the Fund would incur a loss if the
value of the contract decreases between the date the forward contract is
opened and the date the forward contract is closed. The Fund realizes a gain
if the value of the contract increases between those dates. The Fund is also
exposed to credit risk associated with counter party nonperformance on these
forward currency exchange contracts which is typically limited to the
unrealized gains on such contracts that are recognized in the statement of
assets and liabilities. At March 31, 1996, there were no forward currency
exchange contracts outstanding.
In addition, the following summarizes the Fund's covered call options
written transactions for the six months ended March 31, 1996:
<TABLE>
<CAPTION>
OPTIONS TERMINATED
________________
NET
NUMBER OF PREMIUMS REALIZED
CONTRACTS RECEIVED COST (LOSS)
_______ _______ _______ _______
<S> <C> <C> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding
September 30, 1995.................... 1,700 $ 462,384
Contracts written....................... 1,700 1,099,863
_______ _______
3,400 $1,562,247
_______ _______
Contracts Terminated;
Closed................................ 3,400 $1,562,247 $6,199,326 $(4,637,079)
_______ _______ ======= ========
Contracts outstanding March 31, 1996..... 0 0
======= =======
</TABLE>
The Fund may write or (sell) options in order to gain exposure to or
protect against changes in the market. As a writer of
call 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 premium, if the price of the underlying financial instrument decreases
between the date the option is written and the date on which the option is
terminated. Generally, the Fund would realized a loss, if the price of the
financial instrument increases between those dates.
(B) At March 31, 1996, accumulated net unrealized appreciation on
investments was $56,319,798, consisting of $88,932,223 gross unrealized
appreciation and $32,612,425 gross unrealized depreciation.
At March 31, 1996, 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).
PREMIER CAPITAL GROWTH FUND
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
PREMIER CAPITAL GROWTH FUND
We have reviewed the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Capital Growth Fund, one
of the Portfolios constituting Premier Equity Fund, Inc., as of March 31,
1996, and the related statements of operations and changes in net assets and
financial highlights for the six month period ended March 31, 1996. 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, 1995 and financial highlights for the five years in the period
ended September 30, 1995 and in our report dated November 7, 1995, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
[Ernst and Young LLP signature logo]
New York, New York
May 8, 1996
<TABLE>
<CAPTION>
PREMIER GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS MARCH 31, 1996 (UNAUDITED)
COMMON STOCKS-69.3% SHARES VALUE
______ ______
<S> <C> <C>
BASIC AND
PROCESS INDUSTRIES-4.2% AlliedSignal......................... 3,000 $ 177,375
Witco................................ 4,500 158,625
_____
336,000
_____
CAPITAL GOODS-9.4% Albany International, Cl. A............ 10,000 200,000
Coltec Industries...................... 4,100 (a) 49,713
Giddings & Lewis....................... 10,000 190,000
Titan Wheel International.............. 10,000 165,000
York International..................... 3,000 147,000
_____
751,713
_____
CONSUMER-3.1% Canandaigua Wine, Cl. A................ 3,000 (a) 116,250
Ethan Allen Interiors.................. 5,000 (a) 131,250
_____
247,500
_____
ENERGY-9.5% Occidental Petroleum................... 4,000 107,000
Phillips Petroleum..................... 5,000 197,500
UGI.................................... 10,000 212,500
Western Gas Resources.................. 17,000 244,375
_____
761,375
_____
HEALTH CARE-10.4%. Forest Laboratories, Cl. A............. 2,000 97,500
Fuisz Technologies..................... 6,000 (a) 162,000
Heartstream............................ 8,000 (a) 124,000
Mentor................................. 6,500 151,937
ONCOR.................................. 20,000 (a) 107,500
Pharmaceutical Product Development..... 2,500 (a) 88,125
Ultrafem............................... 8,000 (a) 104,000
_____
835,062
_____
MEDIA AND
ENTERTAINMENT-2.1% Time Warner............................ 4,000 163,500
_____
MINING AND METALS-3.5% IMCO Recycling......................... 10,000 197,500
Santa Fe Pacific Gold.................. 5,000 80,000
_____
277,500
_____
REAL ESTATE-5.4% Crocker Realty Trust 20,000 (a) 192,500
Patriot American Hospitality........... 5,500 145,063
Prime Residential...................... 5,000 93,125
_____
430,688
_____
TECHNOLOGY-9.0% First Data............................. 2,500 176,250
First USA Paymentech................... 6,000 (a) 211,500
Forte Software......................... 1,000 (a) 40,500
Red Brick Systems...................... 2,000 (a) 86,000
ThermoQuest ........................... 5,000 85,000
PREMIER GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1996 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
______ ______
TECHNOLOGY (CONTINUED) Wonderware............................ 5,000 (a) $ 117,500
_____
716,750
_____
TELECOMMUNICATIONS-7.1% GTE..................................... 3,700 162,337
Omnipoint............................... 3,500 (a) 89,250
SBC Communications...................... 4,000 210,500
Teledata Communication.................. 10,000 (a) 106,250
_____
568,337
_____
TRANSPORTATION-1.1% Arkansas Best........................... 10,000 87,500
_____
UTILITIES-4.5% Entergy................................. 7,000 196,000
Texas Utilities......................... 4,000 165,500
_____
361,500
_____
TOTAL COMMON STOCKS
(cost $5,043,631).................... $5,537,425
=====
CONVERTIBLE AND PREFERRED STOCKS-1.2%
MEDIA AND ENTERTAINMENT: Station Casinos, 7.0%
(cost $100,268)...................... 2,000 $ 100,000
=====
PRINCIPAL
SHORT-TERM INVESTMENTS-8.8% AMOUNT
______
U.S. TREASURY BILLS: 5.25%, 4/25/1996....................... $ 153,000 $ 152,434
5.83%, 5/2/1996........................ 252,000 250,813
5.33%, 5/16/1996....................... 303,000 301,006
_____
TOTAL SHORT-TERM INVESTMENTS
(cost $704,606)...................... $ 704,253
=====
TOTAL INVESTMENTS (cost $5,848,505)......................................... 79.3% $6,341,678
======= =====
CASH AND RECEIVABLES (NET).................................................. 20.7% $1,652,772
======= =====
NET ASSETS.................................................................. 100.0% $7,994,450
======= =====
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
</TABLE>
See note to financial statements.
<TABLE>
<CAPTION>
PREMIER GROWTH AND INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1996 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $5,848,505)-see statement....................................... $6,341,678
Cash.................................................................... 1,005,741
Receivable for subscriptions to Common Stock............................ 1,366,477
Receivable for investment securities sold............................... 227,947
Dividends receivable.................................................... 9,509
Due from The Dreyfus Corporation........................................ 11,922
_____
8,963,274
LIABILITIES:
Due to Distributor...................................................... $ 1,355
Payable for investment securities purchased............................. 944,980
Payable for Common Stock redeemed....................................... 253
Accrued expenses........................................................ 22,236 968,824
____ _____
NET ASSETS ................................................................ $7,994,450
=====
REPRESENTED BY:
Paid-in capital......................................................... $7,253,794
Accumulated undistributed investment income-net......................... 4,184
Accumulated undistributed net realized gain on investments.............. 243,299
Accumulated net unrealized appreciation on investments-Note 3........... 493,173
_____
NET ASSETS at value......................................................... $7,994,450
=====
Shares of Common Stock outstanding:
Class A Shares
(200 million shares of $1.00 par value authorized).................... 225,252
=====
Class B Shares
(200 million shares of $1.00 par value authorized).................... 177,050
=====
Class C Shares
(200 million shares of $1.00 par value authorized).................... 48,527
=====
Class R Shares
(200 million shares of $1.00 par value authorized).................... 40,044
=====
NET ASSET VALUE per share:
Class A Shares
($3,672,890 / 225,252 shares)......................................... $16.31
=====
Class B Shares
($2,878,895 / 177,050 shares)......................................... $16.26
=====
Class C Shares
($789,627 / 48,527 shares)............................................ $16.27
=====
Class R Shares
($653,038 / 40,044 shares)............................................ $16.31
=====
See notes to financial statements.
PREMIER GROWTH AND INCOME FUND
STATEMENT OF OPERATIONS
FROM DECEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1996 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
Interest.............................................................. $ 11,280
Cash dividends........................................................ 9,984
____
TOTAL INCOME.................................................... $ 21,264
EXPENSES:
Management fee-Note 2(a).............................................. 6,116
Shareholder servicing costs-Note 2(c)................................. 6,540
Directors' fees and expenses-Note 2(d)................................ 6,427
Audit fees............................................................ 3,375
Legal fees............................................................ 3,000
Distribution fees-Note 2(b)........................................... 2,855
Prospectus and shareholders' reports.................................. 2,627
Registration fees..................................................... 2,531
Custodian fees........................................................ 659
Miscellaneous......................................................... 359
____
TOTAL EXPENSES.................................................. 34,489
Less-expense reimbursement from Manager due to
undertaking-Note 2(a)............................................. 21,442
____
NET EXPENSES.................................................... 13,047
____
INVESTMENT INCOME-NET........................................... 8,217
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $243,299
Net unrealized appreciation on investments.............................. 493,173
____
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 736,472
____
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $744,689
=====
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER GROWTH AND INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
FROM DECEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1996 (UNAUDITED)
<S> <C>
OPERATIONS:
Investment income-net.................................................................... $ 8,217
Net realized gain on investments......................................................... 243,299
Net unrealized appreciation on investments for the period................................ 493,173
_____
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................... 744,689
_____
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares......................................................................... (2,842)
Class B shares......................................................................... (471)
Class C shares......................................................................... --
Class R shares......................................................................... (720)
_____
TOTAL DIVIDENDS.................................................................... (4,033)
_____
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares......................................................................... 3,430,840
Class B shares......................................................................... 2,693,595
Class C shares......................................................................... 636,320
Class R shares......................................................................... 500,000
Dividends reinvested:
Class A shares......................................................................... 2,366
Class B shares......................................................................... 352
Class R shares......................................................................... 720
Cost of shares redeemed:
Class A shares......................................................................... (2,359)
Class B shares......................................................................... (8,040)
_____
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............................. 7,253,794
_____
TOTAL INCREASE IN NET ASSETS..................................................... 7,994,450
NET ASSETS:
Beginning of period...................................................................... --
_____
End of period (including undistributed investment income-net of
$4,184 on March 31, 1996).............................................................. $7,994,450
=====
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------------------------------------
CLASS A CLASS B CLASS C CLASS R
______ ______ ______ _____
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 225,253 177,543 48,527 40,000
Shares issued for dividends reinvested. 145 22 -- 44
Shares redeemed........................ (146) (515) -- --
______ ______ ______ _____
NET INCREASE IN SHARES OUTSTANDING 225,252 177,050 48,527 40,044
====== ====== ====== ======
</TABLE>
See notes to financial statements.
PREMIER GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
Reference is made to page 4 of the Fund's Prospectus
dated July 1, 1996, as revised December 1, 1996.
PREMIER GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Equity Funds, Inc. (the "Company") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering two
series, including the Premier Growth and Income Fund (the "Fund") which
commenced operations on December 29, 1995. The Fund's investment objective is
long-term capital growth, current income and growth of income, consistent
with reasonable investment risk. The Dreyfus Corporation ("Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A.
The Company accounts separately for the assets, liabilities and
operations of each fund. Expenses directly attributable to each fund are
charged to that fund's operations; expenses which are applicable to all funds
are allocated among them on a pro rata basis.
As of March 31, 1996, Allomon Corporation, a subsidiary of Mellon Bank
Investments Corporation, the parent company of which is Mellon Bank, held
160,083 shares of the Fund.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund offers Class A, Class B, Class C
and Class R shares. Class A shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred
sales charge imposed at the time of redemption made within six years of
purchase, Class C shares are subject to a contingent deferred sales charge
imposed at the time of redemption on redemptions made within one year of
purchase and Class R shares are sold at net asset value per share only to
institutional investors. Other differences between the four Classes include
the services offered to and the expenses borne by each Class and certain
voting rights.
(A) PORTFOLIO VALUATION: The Fund's 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.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Forward currency exchange contracts are
valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or 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.
PREMIER GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain
and loss from securities transactions are recorded on the identified cost
basis. Dividend income is recognized on the ex-dividend date and interest
income, including, where applicable, amortization of discount on investments,
is recognized on the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid on a
quarterly basis. Dividends from net realized capital gain are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a
regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the
Internal Revenue Code, and to make distributions of taxable income sufficient
to relieve it from substantially all Federal income and excise taxes.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full fiscal year the aggregate expenses of the Fund,
exclusive of taxes, brokerage, interest on borrowings (which, in the view of
Stroock & Stroock & Lavan, counsel to the Fund, also contemplates dividends
and interest accrued on securities sold short) and extraordinary expenses,
exceed the expense limitation of any state having jurisdiction over the Fund,
the Fund may deduct from payments to be made to the Manager, or the Manager
will bear the amount of such excess to the extent required by state law. The
most stringent state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full fiscal year that such expenses
(excluding distribution expenses and certain expenses as described above)
exceed 2-1/2% of the first $30 million, 2% of the next $70 million and 1-1/2%
of the excess over $100 million of the average value of the Fund's net assets
in accordance with California "blue sky" regulations. The Manager has
currently undertaken from December 29, 1995 through December 31, 1996 to
reduce the management fee paid by or reimburse such excess expenses of the
Fund, to the extent that the Fund's aggregate annual expenses (excluding
distribution expenses and certain expenses as described above) exceed an
annual rate of 1.25 of 1% of the value of the Fund's average daily net
assets. The expense reimbursement, pursuant to the undertaking, amounted to
$21,442 for the period ended March 31, 1996.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(B) Under a Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, the Fund pays the Distributor for distributing the Fund's
Class B and Class C shares at an annual rate of .75 of 1% of the value of the
average daily net assets of Class B and Class C shares, respectively. For the
period ended March 31, 1996, $1,697 was chared to the Fund for the Class B
shares and $1,158 was charged to the Fund for the Class C shares.
PREMIER GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) The Fund has adopted a Shareholder Services Plan, pursuant to which it
pays a fee to the Distributor, for the provision
of certain services to Fund shareholders at the annual rate of .25 of 1% of
the value of the average daily net assets of Class A, Class B and Class C
shares, respectively. 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. The Distributor may make
payments to Service Agents in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. For the period ended
March 31, 1996, $708, $566 and $386 were charged to Class A, Class B and
Class C shares, respectively, and no amounts were charged to the Class R
shares, by the Distributor pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $358 for the period from December 29, 1995 through
March 31, 1996.
(D) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $4,500 and an attendance fee of
$500 per meeting. The Chairman of the Board receives an additional 25% of
such compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short term securities, during the period ended March 31, 1996,
amounted to $7,294,301 and $2,394,534, respectively.
At March 31, 1996, accumulated net unrealized appreciation on investments
was $493,173, consisting of $530,442 gross unrealized appreciation and
$37,269 gross unrealized depreciation.
At March 31, 1996, 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).
