PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
LETTER TO SHAREHOLDERS
Dear Shareholder:
The fiscal year ended September 30, 1996, was a difficult one for me as
your new portfolio manager and a disappointing year for shareholders of the
Premier Aggressive Growth Fund (formerly known as the Premier Capital Growth
Fund).
The stock market performed well over the last year, managing a positive
return during each quarter of the year. The Premier Aggressive Growth Fund's
fiscal year got off to a weak start in late 1995 during transition to a new
portfolio manager, then outperformed the market in the first five months of
1996 when aggressive growth stocks led the overall stock market rally.
However, the Fund sharply declined in June and July as interest rates jumped
higher hurting health and technology stocks more than the general market, and
finished the year rallying modestly with the general market.
ECONOMIC REVIEW
The Federal Reserve Board ("the Fed") twice in recent months has thwarted
market expectations for policy tightening, perhaps to test the hypothesis
that somewhat faster economic growth won't foster inflation. So far, rising
wages and a tight labor market have failed to boost price indexes. Yet the
U.S. business cycle is now entering the late-cycle phase when inflationary
pressures typically emerge. Although profit growth slowed in 1996, better
profit growth may be in prospect for some economic sectors next year. The
Fed's stance has caused short-term interest rates to become quite volatile,
although long-term rates have held fairly steady since the spring. True to
form, the U.S. business cycle is entering the late-cycle phase and we believe
that this portends sustained steady growth ahead.
In 1996, the unemployment rate has plunged toward 5% while wage growth
has exceeded price inflation for the first time since 1989. Yet there is
little evidence to date of rising price inflation, prompting the Fed to leave
its interest rate policy unchanged. This is very different from 1994 when the
Fed preemptively hiked interest rates to stem a future price inflation that
subsequently did not materialize.
Real Gross Domestic Product grew 3.3% in the first half, led by strong
manufacturing, housing and consumer sectors. Since midyear, home sales have
reached new cyclical highs, orders for exports and capital goods have
resurged, and many foreign economies are improving. However, despite
favorable income growth, high confidence and better job security, consumer
spending has been lackluster since midyear. This has caused many analysts to
conclude that the economy has shifted to a slower growth. Corporate profit
growth decelerated in 1996, chiefly reflecting lagging midcycle slowdowns in
some sectors (resource industries, exports, capital goods). Many of these
sectors are now improving.
As we start the fourth quarter of the year, interest rates are actually
little different than they were in the spring. Should new inflation signs
begin to emerge, then both short- and long-term rates would likely rise.
As the U.S. economy moves into the late-cycle phase it is, as usual, out
of sync with business cycles overseas which, by and large, are at a much
earlier stage. This portends faster world growth in 1997. Hopefully, the U.S.
economy can participate in a world economy that is accelerating in growth
without igniting inflation.
MARKET OVERVIEW
For the past 12 months, the securities markets, in addition to the usual
influences such as corporate profits and economic activity, have taken their
principal cues from the Fed.
Indeed, the market's expectations concerning the Fed had more influence
on interest rates and securities prices than any actions of the Fed. A year
ago, the central bank was still very concerned about excessive economic
growth and therefore was still raising interest rates. Starting last
February, however, the Fed became concerned about a possible recession. For
the rest of the period through September 30, 1996, the Fed left interest
rates alone.
The markets, however, were not so passive. Last spring, a strong rise
began in all the broad market indexes. In the early summer, technology issues
and some other categories appeared to have outrun their prospects for the
time being and a reaction set in. By late June, the economy was still
expanding strongly, as indicated by impressive growth in employment. This led
the markets to expect a corrective move by the Federal Reserve. Accordingly,
prices of blue chips and even more those of smaller, more volatile issues
retreated, as did bond prices.
The decline, however, was short-lived. The economic numbers continued
showing signs of growth, but at a moderate pace. Then a guessing game began
among investors as to what the Fed's next move might be. At its late
September meeting, the Fed let the shoe drop - it did not intervene in the
credit market. That was a signal to the markets to continue the climb that
had in fact gotten underway in anticipation that the Fed might keep hands
off. This was the background for the record-breaking equity performances that
occurred in late September and early October.
INVESTMENT STRATEGY
The Premier Aggressive Growth Fund investment strategy seeks investments
in fast-growing companies based on its investment philosophy emphasizing
strong future revenue and earnings growth. We focus on the outlook for the
next twelve to twenty-four months. This evolves from the strong historical
stock market relationship between a company's year-over-year relative
earnings growth performance and the company's relative stock price
performance. The portfolio construction process tends toward a bottom-up,
stock-selective style favoring companies in high-growth businesses with exciting
new product and business opportunities. The overall portfolio structure
currently and usually will have the volatile, growth-oriented characteristics
which result from a heavy sector-specific emphasis and large stock positions
in the most attractive investment ideas.
PORTFOLIO FOCUS
For the 12 months ended September 30, 1996, the Fund's Class A shares
suffered a small loss of -.71%. Classes B, C and R had their inception
January 3, 1996; for the nine months ended September 30, 1996, Class B shares
had a negative return of -.74%, Class C -.07% and Class R shares were
unchanged.* For the 12-month period, the Standard & Poor's 500 Composite
Stock Price Index had a total return of 20.32%.**
Part way through the third quarter of 1995, after I took over as
Portfolio Manager, I moved the portfolio to a fully invested equity position
based on a more positive investment outlook, focusing heavily
on large technology and health care sector weightings. The technology
emphasis on computer and semiconductor shares hurt the Fund in late 1995 when
these shares fell sharply on disappointing earnings results. The portfolio's
shift into smaller, faster-growing companies benefited early 1996 performance
as the more classic growth stock sectors - health care, technology and
consumer growth - led a dynamic five-month equity market rally. When fears of
above-average booming economic growth and rising inflation momentum caused a
sharp interest rate rise in June and July, volatile aggressive growth stocks
such as those heavily weighted in the Fund suffered severe declines as
investors fretted over a potential end to the bull equity market. Portfolio
holdings with significant losses included Onguard Systems, Gilead Sciences
and Imnet Systems. When economic growth momentum slowed during the late
summer and interest rates declined as high inflation fears subsided, the
stock market recovered gradually. With renewed confidence in an environment
of solid earnings growth and stable interest rates, the late summer market
rally reached record index highs in early fall.
Currently, the portfolio structure continues to emphasize the same sector
focus as during most of 1996, with overweightings in health care, technology
and consumer growth, while utilities and energy shares are the most
underweight compared to the S&P 500. The ten largest positions represent
about 40% of the Fund's assets and reflect the traditional aggressive growth
emphasis on health care (Teva Pharmaceutical, Fuisz Technologies, Interneuron
Pharmaceuticals), electronic technology (Intel, Cisco Systems, Raychem) and
consumer growth (Tommy Hilfiger, Metromedia International, Sun International
Hotels). In our opinion, these companies have strong above-average growth
prospects for 1997 and 1998.
While the excessive growth euphoria of the spring of 1996 has waned, we
are optimistic about the stock market outlook as we approach 1997, given the
current background combination of moderate sustained growth, slightly rising
inflation and prospects for solid 1997 earnings and dividend growth in most
equity market sectors. We believe the Premier Aggressive Growth Fund is
positioned in companies with outstanding 1997 growth prospects that should
reward shareholders as we work to build a new and improved investment
performance record.
Sincerely,
[Michael L. Schonberg signature logo]
Michael L. Schonberg
Portfolio Manager
October 16, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid, without taking into account the maximum initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B shares and Class C shares.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
PREMIER AGGRESSIVE GROWTH FUND SEPTEMBER 30, 1996
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER AGGRESSIVE
GROWTH FUND CLASS A SHARES AND THE STANDARD & POOR'S 500 COMPOSITE PRICE
INDEX
Dollars
$202,093
Standard & Poor's 500
Composite Stock Price
Index*
$157,651
Premier Aggressive
Growth Fund
(Class A Shares)
6/23/69
(years shown above are as of September 30th)
[Exhibit A]
*Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS ACTUAL AGGREGATE TOTAL RETURNS
CLASS A SHARES CLASS B SHARES
_______________________________________________________________ __________________________________________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIOD ENDED 9/30/96 Sales Charge Sales Charge (4.5%) PERIOD ENDED 9/30/96 Redemption Redemption*
____________ ______________ ____________________ ____________________ ____________ _________________
<S> <C> <C> <C> <C> <C>
1 Year (0.71)% (5.19)% From Inception (1/3/96) (0.74)% (4.71)%
5 Years 6.66 5.69
10 Years 8.99 8.49
From Inception (6/23/69) 10.83 10.64
</TABLE>
<TABLE>
<CAPTION>
ACTUAL AGGREGATE TOTAL RETURNS
CLASS C SHARES CLASS R SHARES
_______________________________________________________________ ________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 9/30/96 No Redemption Redemption** PERIOD ENDED 9/30/96
____________ _______________ _____________ _____________________
<S> <C> <C> <C> <C>
From Inception (1/3/96) (0.07)% (1.07%) From Inception (1/3/96) 0.00%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of
Premier Aggressive Growth Fund on 6/23/69 (Inception Date) to a $10,000
investment made in the Standard and Poor's 500 Composite Stock Price Index on
that date. For comparative purposes, the value of the Index on 6/30/69 is
used as the beginning value on 6/23/69. All dividends and capital gain
distributions are reinvested. Performance for Class B, Class C and Class R
shares will vary from the performance of Class A shares shown above due to
differences in charges and expenses.
The Fund's performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares and all other applicable fees and
expenses. The Standard and Poor's 500 Composite Stock Price Index is a widely
accepted, unmanaged index of overall stock market performance, which does not
take into account charges, fees and other expenses. Further information
relating to Fund performance, including expense reimbursements, if
applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
* The maximum contingent deferred sales charge for Class B shares is 4% and
is reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1996
COMMON STOCKS-109.5% SHARES VALUE
___________ _____________
<S> <C> <C>
COMMERCIAL SERVICES-4.7% Correctional Services Corp.................. 275,000 (a,b) $ 3,884,375
Corrections Corporation of America.......... 400,000 (a) 12,500,000
NuCo2....................................... 130,000 (a) 2,697,500
Quintel Entertainment....................... 450,000 (a) 3,487,500
_____________
22,569,375
_____________
CONSUMER DURABLES-2.2% Sunbeam..................................... 450,000 10,406,250
_____________
CONSUMER
NON-DURABLES-12.6% Philip Morris Cos........................... 250,000 22,437,500
Quiksilver.................................. 250,000 (a) 6,250,000
Tommy Hilfiger.............................. 320,000 (a) 18,960,000
Ultrafem.................................... 110,000 (a) 2,543,750
Vista 2000.................................. 550,000 (a,b) 275,000
Warnaco Group, Cl. A........................ 425,000 10,093,750
_____________
60,560,000
_____________
CONSUMER SERVICES-16.8% American Radio Systems, Cl. A............... 150,000 (a) 5,587,500
Black Rock Golf............................. 100,000 (a) 475,000
Casino Data Systems......................... 810,000 (a) 15,390,000
Checkfree................................... 500,000 (a) 10,000,000
Cinar Films, Cl. B.......................... 508,181 (a,b) 13,244,467
Film Roman.................................. 85,000 (a) 850,000
Metromedia International Group.............. 1,700,000 (a) 18,062,500
Sun International Hotels.................... 330,000 (a) 16,912,500
_____________
80,521,967
_____________
ELECTRONIC
TECHNOLOGY-16.1% Advanced Photonix, Cl. A.................... 515,000 (a) 1,705,938
Cisco Systems............................... 300,000 (a) 18,618,750
Cree Research............................... 220,000 (a) 2,695,000
Gilat Satellite Networks.................... 350,000 (a) 6,168,750
Gray Communications Systems, Cl. B.......... 300,000 5,437,500
Intel....................................... 250,000 23,859,375
MRV Communications.......................... 475,000 (a) 12,231,250
Personal Computer Products.................. 975,000 (a) 1,696,500
Storage Technology.......................... 135,000 (a) 5,113,125
_____________
77,526,188
_____________
ENERGY MINERALS-2.7% Rutherford-Moran Oil........................ 435,000 (a) 13,050,000
_____________
FINANCE-5.2% ASTA Funding................................ 150,000 (a) 881,250
American States Financial................... 500,000 11,625,000
National Auto Credit........................ 209,000 (a) 2,403,500
Titan Holdings.............................. 262,500 3,904,688
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
FINANCE (CONTINUED) 20th Century Industries..................... 350,000 (a) $ 6,168,750
_____________
24,983,188
_____________
HEALTH SERVICES-5.2% Complete Management......................... 450,000 (a,b) 7,087,500
Core........................................ 180,000 (a) 2,115,000
EP MedSystems............................... 230,000 (a) 1,265,000
Fresenius Medical AG, A.D.S. ............... 157,048 (a) 3,651,366
HBO & Co.................................... 100,000 6,675,000
Northstar Health Services................... 235,000 (a,b) 411,250
OMEGA Health Systems........................ 269,500 (a,b) 1,667,531
OnGard Systems.............................. 280,000 (a) 980,000
OncorMed.................................... 364,000 (a,b) 1,387,750
_____________
25,240,397
_____________
HEALTH TECHNOLOGY-20.2% Atlantic Pharmaceuticals.................... 30,000 (a) 266,250
Avigen...................................... 245,000 (a) 1,255,625
BioCryst Pharmaceuticals.................... 60,000 (a) 765,000
Fuisz Technologies.......................... 1,260,000 (a,b) 16,380,000
Guidant..................................... 200,000 11,050,000
Guilford Pharmaceuticals.................... 105,000 (a) 2,887,500
Interneuron Pharmaceuticals................. 590,000 (a) 16,667,500
MacroChem/Delaware.......................... 662,500 (a) 2,484,375
Microvision................................. 100,000 (a) 556,250
NeoPharm.................................... 200,000 (a) 1,500,000
ONCOR....................................... 800,000 (a) 4,150,000
Sepraco..................................... 300,000 (a) 4,237,500
Teva Pharmaceutical Industries, A.D.R....... 640,000 29,680,000
VIMRx Pharmaceuticals....................... 1,300,000 (a) 5,037,500
_____________
96,917,500
_____________
INDUSTRIAL SERVICES-2.9% Commodore Applied Technologies.............. 700,000 (a) 4,637,500
Global Marine............................... 579,500 (a) 9,127,125
_____________
13,764,625
_____________
NON-ENERGY MINERALS-.5% TVX Gold.................................... 350,000 (a) 2,362,500
_____________
PROCESS INDUSTRIES-4.8% Chromatics Color Science.................... 155,000 (a) 775,000
Crompton & Knowles.......................... 900,000 14,737,500
Grace (W.R) & Co............................ 149,700 (a) 7,784,400
_____________
23,296,900
_____________
PRODUCER
MANUFACTURING-6.3% Motorcar Parts & Accessories................. 250,000 (a) 3,312,500
Olin......................................... 100,000 8,400,000
Raychem...................................... 245,000 18,375,000
_____________
30,087,500
_____________
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
RETAIL TRADE-1.4% Federated Department Stores.................. 200,000 (a) $ 6,700,000
_____________
TECHNOLOGY SERVICES-5.1% IMNET Systems................................ 440,000 (a) 8,580,000
Mercury Interactive.......................... 795,000 (a) 11,030,625
TriTeal...................................... 350,000 (a) 5,075,000
_____________
24,685,625
_____________
UTILITIES-2.8% Amnex........................................ 800,000 (a) 2,700,000
NorAm Energy................................. 730,000 10,858,750
_____________
13,558,750
_____________
TOTAL COMMON STOCKS
(cost $481,731,714) $526,230,765
==============
TOTAL INVESTMENTS (cost $481,731,714)..................................... 109.5% $526,230,765
======= ==============
LIABILITIES, LESS CASH AND RECEIVABLES.................................... (9.5%) $(45,573,233)
======= ==============
NET ASSETS................................................................ 100.0% $480,657,532
======= ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Investment in non-controlled affiliates (cost $42,208,902)-see Note
1(d).
See notes to financial statements.
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996
ASSETS:
Investments in securities, at value
(cost $481,731,714)-see statement..................................... $526,230,765
Cash.................................................................... 51,461
Receivable for investment securities sold............................... 2,860,273
Dividends receivable.................................................... 343,488
Receivable for subscriptions to Common Stock subscribed................. 4,917
Prepaid expenses........................................................ 16,037
______________
529,506,941
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 297,764
Due to Distributor...................................................... 99,262
Bank loans payable-Note 2............................................... 40,100,000
Payable for investment securities purchased............................. 7,360,464
Payable for Common Stock redeemed....................................... 557,388
Loan commitment fees and interest payable............................... 253,902
Accrued expenses........................................................ 180,629 48,849,409
_____________ ______________
NET ASSETS.................................................................. $480,657,532
==============
REPRESENTED BY:
Paid-in capital......................................................... $445,577,889
Accumulated net realized (loss) on investments.......................... (9,419,408)
Accumulated net unrealized appreciation on investments-Note 4 (b)....... 44,499,051
______________
NET ASSETS at value......................................................... $480,657,532
==============
NET ASSET VALUE, per share:
Class A Shares
200 million shares of $1.00 par value authorized
($480,638,245 / 32,443,473 shares of Common Stock outstanding)........ $14.81
=======
Class B Shares
200 million shares of $1.00 par value authorized
($12,639 / 858 shares of Common Stock outstanding).................... $14.73
=======
Class C Shares
200 million shares of $1.00 par value authorized
($1,453 / 98 shares of Common Stock outstanding)...................... $14.83
=======
Class R Shares
200 million shares of $1.00 par value authorized
($5,195 / 350 shares of Common Stock outstanding)..................... $14.84
=======
See notes to financial statements.
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1996
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $36,683 foreign taxes withheld at source)...... $ 4,164,039
Interest.............................................................. 304,729
____________
TOTAL INCOME.................................................... $ 4,468,768
EXPENSES:
Management fee-Note 3(a).............................................. 3,965,630
Interest-Note 2....................................................... 2,009,924
Shareholder servicing costs-Note 3(c)................................. 1,620,699
Professional fees..................................................... 99,728
Directors' fees and expenses-Note 3(d)................................ 70,654
Custodian fees-Note 3(c).............................................. 70,018
Loan commitment fees-Note 2........................................... 67,814
Prospectus and shareholders' reports.................................. 48,846
Distribution fees-Note 3 (b).......................................... 75
Miscellaneous......................................................... 4,032
____________
TOTAL EXPENSES.................................................. 7,957,420
____________
INVESTMENT (LOSS)-NET........................................... (3,488,652)
____________
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 4:
Net realized (loss) on investments and foreign currency transactions (including
options transactions)................................................. $(9,469,961)
Net realized (loss) on forward currency exchange contracts;
Short transactions.................................................... (157,429)
____________
NET REALIZED (LOSS)................................................... (9,627,390)
Net unrealized appreciation on investments and
foreign currency transactions:
Unaffiliated issuers.................................................. $ 8,483,047
Affiliated issuers.................................................... 2,128,971 10,612,018
____________
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 984,628
____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (2,504,024)
==============
See notes to financial statements.
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
_________________________________________
1995 1996
________________ ________________
OPERATIONS:
Investment income (loss)-net............................................ $ 14,579,338 $ (3,488,652)
Net realized gain (loss) on investments................................. 39,414,693 (9,627,390)
Net unrealized appreciation on investments for the year................. 6,873,811 10,612,018
________________ ________________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 60,867,842 (2,504,024)
________________ ________________
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........................................................ 82,126,165 119,742,311
Class B shares........................................................ - 13,886
Class C shares........................................................ - 2,731
Class R shares........................................................ - 5,239
Dividends reinvested;
Class A shares........................................................ 21,932,842 42,442,019
Cost of shares redeemed;
Class A shares........................................................ (138,675,507) (203,500,906)
________________ ________________
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.......... (34,616,500) (41,294,720)
________________ ________________
TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 1,717,573 (91,419,937)
NET ASSETS:
Beginning of year....................................................... 570,359,896 572,077,469
________________ ________________
End of year (including undistributed investment income-net;
$1,801,170 in 1995)................................................... $ 572,077,469 $ 480,657,532
================= =================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
SHARES
_____________________________________________________________
CLASS A CLASS B
____________________________________ __________________
YEAR ENDED
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
____________________________________
1995 1996 1996*
____________ ___________ __________
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................... 5,218,666 7,915,922 858
Shares issued for dividends reinvested............... 1,526,294 2,844,638 -
Shares redeemed.......................................... (8,826,816) (13,395,848) -
____________ ___________ __________
NET INCREASE (DECREASE) IN SHARES OUTSTANDING.......... (2,081,856) (2,635,288) 858
============= ============= =============
SHARES
__________________________________________
CLASS C CLASS R
_________________ __________________
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996* 1996*
_________________ __________________
CAPITAL SHARE TRANSACTIONS:
Shares sold.............................................. 98 350
Shares issued for dividends reinvested................... - -
Shares redeemed.......................................... - -
_________________ __________________
NET INCREASE IN SHARES OUTSTANDING..................... 98 350
================== ====================
*From January 3, 1996 (commencement of initial offering) to September 30,
1996.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
CLASS A
______________________________________________________________________
YEAR ENDED SEPTEMBER 30,
______________________________________________________________________
PER SHARE DATA: 1992 1993 1994 1995 1996
________ ________ _________ ________ _________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $17.72 $18.11 $18.53 $15.35 $16.31
________ ________ _________ ________ _________
INVESTMENT OPERATIONS:
Investment income (loss)-net................. .32 .21 .40 .40 (.12)
Net realized and unrealized gain (loss)
on investments............................. 1.83 1.82 (.56) 1.23 .01
________ ________ _________ ________ _________
TOTAL FROM INVESTMENT OPERATIONS........... 2.15 2.03 (.16) 1.63 (.11)
________ ________ _________ ________ _________
DISTRIBUTIONS:
Dividends from investment income-net......... (.39) (.24) (.80) (.44) (.28)
Dividends from net realized gain on investments (1.37) (1.37) (2.22) (.23) (1.11)
________ ________ _________ ________ _________
TOTAL DISTRIBUTIONS........................ (1.76) (1.61) (3.02) (.67) (1.39)
________ ________ _________ ________ _________
Net asset value, end of year................. $18.11 $18.53 $15.35 $16.31 $14.81
======== ========= ========== ========= =========
TOTAL INVESTMENT RETURN (1)...................... 13.28% 12.04% (1.50%) 11.21% (.71%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets .97% 1.02% 1.03% 1.03% 1.11%
Ratio of interest expense, loan commitment fees and
dividends on securities sold short to
average net assets............................... .10% .04% .09% .08% .39%
Ratio of net investment income (loss) to
average net assets......................... 1.74% 1.24% 2.10% 2.55% (.66%)
Portfolio Turnover Rate...................... 141.67% 102.23% 158.05% 298.60% 131.43%
Average commission rate paid (2)............. $.0961
Net Assets, end of year (000's Omitted)...... $520,895 $596,369 $570,360 $572,077 $480,638
(1) Exclusive of sales charge.
(2) The Fund is required to disclose its average commission rate paid
per share for purchases and sales of investment
securities.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
FINANCIAL HIGHLIGHTS (CONTINUED)
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 B CLASS C CLASS R
__________________ __________________ __________________
YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
PER SHARE DATA: 1996(1) 1996(1) 1996(1)
__________________ __________________ __________________
<S> <C> <C> <C>
Net asset value, beginning of period............. $14.84 $14.84 $14.84
__________ _________ __________
INVESTMENT OPERATIONS:
Investment income (loss)-net............................. (.10) (.24)(2) (.02)
Net realized and unrealized gain (loss) on investments... (.01) .23(2) .02
__________ _________ __________
TOTAL FROM INVESTMENT OPERATIONS................... (.11) (.01)(2) -
__________ _________ __________
Net asset value, end of period..................... $14.73 $14.83 $14.84
=========== =========== ============
TOTAL INVESTMENT RETURN (3).............................. (.74%)(4) (.07%)(4) .00%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets..... 1.47%(4) 1.42%(4) .73%(4)
Ratio of interest expense and loan committment fees
to average net assets............................... .49%(4) .47%(4) .35%(4)
Ratio of net investment (loss) to average net assets (1.40%)(4) (1.32%)(4) (.56%)(4)
Portfolio Turnover Rate................................. 131.43% 131.43% 131.43%
Average commission rate paid (5)................ $.0961 $.0961 $.0961
Net Assets, end of period (000's Omitted)......... $13 $1 $5
(1) From January 3, 1996 (commencement of initial offering) to September 30, 1996.
(2) Based on average shares outstanding at each month end.
(3) Exclusive of sales load.
(4) Not annualized.
(5) The Fund is required to disclose its average commission rate paid
per share for purchases and sales of investment
securities.
See notes to financial statements.
</TABLE>
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)_SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS
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 Premier Aggressive 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. ("Mellon").
On September 9, 1996, the Board of Directors of the Fund approved an
Agreement and Plan of Reorganization providing for the transfer of all or
substantially all of the assets and liabilities of Premier Strategic Growth
Fund to the Fund, in a tax free exchange for shares of Common Stock of the
Fund at net asset value and the assumption of stated liabilities (the
"Exchange"). The Exchange is expected to be approved by Premier Strategic
Growth Fund shareholders on December 16, 1996 and to become effective on or
after December 31, 1996.
On January 2, 1996, the Company's Board of Directors approved a change of
the Company's name, from "Premier Capital Growth Fund, Inc." to "Premier
Equity Fund's, Inc." and to rename the existing Fund "Premier Capital Growth
Fund". On September 9, 1996, the Company's Board of Directors approved a
change of the Fund's name from "Premier Capital Growth Fund" to "Premier
Aggressive Growth Fund" which became effective on September 23, 1996.
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.
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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including 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
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)_SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Directors. Investments denominated in foreign currencies are translated to
U.S. dollars at the prevailing rates of exchange. Forward currency exchange
contracts are valued at the forward rate.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) AFFILIATED ISSUERS: Issuers in which the Fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act.
(E) 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, it is the policy of
the Fund not to distribute such gain.
(F) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
In accordance with Statement of Position 93-2, the Fund reclassed
$3,540,452 from paid in capital and $7,643,949 from undistributed realized
gains to undistributed income.
The Fund has an unused capital loss carryover of approximately $9,419,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 1996. If not
applied, the carryover expires in fiscal 2004.
NOTE 2-BANK LINES OF CREDIT:
The Fund may borrow up to $76 million for leveraging purposes under a
short-term unsecured line of credit and participates with other
Dreyfus-managed Funds in a $100 million unsecured line of credit
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)_SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
primarily to be utilized for temporary or emergency purposes, including the
financing of redemptions. Interest is charged to the Fund at rates which are
related to the Federal Funds rate in effect at the time of borrowings and an
additional commitment fee is paid on the unused portion of the first $46
million on the line of credit utilized for leveraging. Outstanding borrowings
under both arrangements on September 30, 1996 amounted to $40.1 million.
The average daily amount of borrowings outstanding under both agreements
during the year ended September 30, 1996 was approximately $31.5 million,
with a related weighted average annualized interest rate of 6.39%. The
maximum amount borrowed at any time during the year ended September 30, 1996,
was $68.8 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 that if in any full fiscal year the aggregate expenses of the Fund,
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, with respect to Class A 1 1/2% of the average
value of the Fund's net assets and with respect to each other Class 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
such excess expense. The most stringent state expense limitation applicable
to the Fund presently requires reimbursement of expenses in any full fiscal
year that such expenses (exclusive of 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. There was no expense reimbursement for the year ended September
30, 1996.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $67,637 during the year ended September 30, 1996 from commissions
earned on sales of the Fund's shares.
(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.
During the period ended September 30, 1996, $35 was charged to the Fund for
the Class B shares and $40 was charged to the Fund for the Class C shares.
(C) Effective January 2, 1996, the Fund adopted a Shareholder Services
Plan, pursuant to which it pays 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
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)_SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
related to the maintenance of shareholder accounts. The Distributor may make
payments to Service Agents (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the year ended
September 30, 1996, $975,463 was charged to Class A shares and during the
period January 3, 1996 through September 30, 1996, $12 and $13 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. During the
period October 1, 1995 through January 1, 1996, the Fund was charged an
aggregate of $190,772 pursuant to the Shareholder 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 $288,258 during the period from
December 1, 1995 through September 30, 1996.
Effective May 10, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. During the period from May
10, 1996 through September 30, 1996, $17,565 was paid to Mellon pursuant to
the custody agreement.
(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 year ended September 30, 1996, amounted to
$739,421,393 and $789,081,236, 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 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 counterparty nonperformance on
PREMIER AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)_SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 September 30, 1996, there were no forward currency
exchange contracts outstanding.
In addition, the following summarizes the Fund's covered call options
written transactions during the year ended September 30, 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
September 30, 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 realize a loss, if the price of the
financial instrument increases between those dates.
(B) At September 30, 1996, accumulated net unrealized appreciation on
investments was $44,499,051, consisting of $91,882,939 gross unrealized
appreciation and $47,383,888 gross unrealized depreciation.
At September 30, 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 AGGRESSIVE GROWTH FUND
(FORMERLY PREMIER CAPITAL GROWTH FUND)-SEE NOTE 1
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
PREMIER AGGRESSIVE GROWTH FUND
We have audited the accompanying statement of assets and liabilities of
Premier Aggressive Growth Fund, including the statement of investments, as of
September 30, 1996, 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 verification by
examination of securities held by the custodian as of September 30, 1996 and
confirmation of securities not held by the custodian by correspondence with
others. 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 Aggressive Growth Fund at September 30, 1996, 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 & Young LLP signature logo]
New York, New York
November 8, 1996
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $1.007 per share as a
long-term capital gain distribution of the $1.394 per share paid on December
12, 1995.
PREMIER AGGRESSIVE GROWTH FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 009AR969
Annual Report
Premier Aggressive
Growth Fund
September 30, 1996
[lion2/hres logo]
PREMIER GROWTH AND INCOME FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
For its first fiscal year, from its inception on December 29, 1995
through September 30,1996, the total return for Premier Growth and Income
Fund Class A shares was 48.24%, Class B shares was 47.14%, Class C shares
47.27% and Class R shares 48.38%.* This compares with a year-to-date return
of 13.49% for the Standard and Poor's 500 Composite Stock Price Index.**
There were several reasons for the excellent total return of the Fund
during this initial period. First, it was a favorable period for the overall
stock market. Second, the Fund was invested in several dozen holdings. We
believe this degree of concentration provides a combination of some portfolio
diversification together with a substantial sensitivity to the performance of
individual holdings. Third, the Fund was fortunate to have several individual
investments that performed quite well during the period. Given its relative
concentration, the Fund's performance was sensitive to the performance of
these individual holdings.
Several of the holdings that performed well early in the period rebounded
off depressed price levels following tax-loss selling in late 1995. Some of
the small-cap technology and medical companies owned by the Fund were bid up
sharply by favorable fundamentals and market enthusiasm. A number of these
stocks have since been sold at a profit. We try to acquire companies with
favorable long-term fundamentals, but prefer to sell them if they reach what
appear to be fully valued levels. In some cases, we may repurchase them if
they later decline. The timely sale of stocks that rose to high valuation
levels contributed to the Fund's return during the fiscal year.
The Premier Growth and Income Fund has the flexibility to invest in a
variety of large-cap, mid-cap and small-cap companies. The ability to invest
in small-cap companies was helpful to the Fund's performance during the
period. The portfolio also included investments in such major companies as
Baxter International, Bank of Boston, Deere & Co., Union Pacific, Time
Warner, Canadian Pacific and Louisiana Land & Exploration, and midcap
companies such as OfficeMax, General Nutrition and Sundstrand.
There is no requirement that each security in your Fund provide both an
income and a growth opportunity. The portfolio is thus a mix of securities
selected largely for their growth opportunities and those selected primarily
for their income generation. This provides the flexibility to use a variety
of different securities to achieve the Fund's objectives. The proportion of
growth investments and income investments as well as the overall risk level
of the total portfolio may be shifted in accordance with market conditions.
For the income portion of the combined objectives of growth and income,
your Fund was invested in utilities such as UGI, SBC Communications, Entergy
and GTE, each of which has a dividend yield in excess of the S&P 500. There
are also investments in one REIT, two convertible preferred stocks and three
convertible bonds.
Several long-term positive forces have provided a supportive background
for the financial markets. First, the trend of inflation has remained
generally favorable in the last several years. Second, we are in the early
stages of a key demographic shift as the baby boom generation begins to focus
on the need for a permanent program of saving to provide for future
retirement income. Third, U.S. productivity growth in manufacturing has been
favorable.
Nonetheless, we believe that the period of strongest earnings growth in
the U.S. economy is behind us for the time being. Corporate cost-cutting is
very far advanced in many companies as are the benefits of refinancing
high-cost debt. Many multinational companies have already reaped the profit
benefits of the past decline in the dollar. Thus we believe that strong
profit growth will become increasingly scarce over the next year. Many of the
positions in the Fund are companies that we believe have a good chance of
sustaining strong earnings growth even in this more challenging environment.
While overall market valuations have risen, we continue to find good
companies available in the stock market at reasonable valuation levels.
The active stock market in 1996 provided favorable opportunities for
capital appreciation. Shareholders should be aware, however, that the Fund's
total return in this period was unusual. We would be surprised if it were to
be repeated even if market conditions are favorable in the coming years.
We will endeavor to realize a favorable return for the shareholders
commensurate with a reasonable level of risk. There is likely to be an
alternation of periods where the net asset value of the Fund declines and
periods when the net asset value rises. Our focus is on achieving a
satisfactory return for the shareholders over a period of time.
Very truly yours,
[Richard B. Hoey signature logo]
Richard B. Hoey
Portfolio Manager
October 31, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and capital gains paid,
without taking into consideration the maximum initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge in
the case of Class B and C shares.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC._Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged Index of stock market performance.
PREMIER GROWTH AND INCOME FUND SEPTEMBER 30, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER GROWTH AND
INCOME FUND CLASS A SHARES, CLASS B SHARES, CLASS C SHARES AND CLASS R SHARES
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[Exhibit A:
Dollars
$14,838
Premier Growth and
Income Fund
(Class R Shares)
$14,627
Premier Growth and
Income Fund
(Class C Shares)
$14,314
Premier Growth and
Income Fund
(Class B Shares)
$14,156
Premier Growth and
Income Fund
(Class A Shares)
$11,349
Standard & Poor's 500
Composite Stock
Price Index*
*Source: Lipper Analytical Services, Inc.]
<TABLE>
<CAPTION>
ACTUAL AGGREGATE TOTAL RETURNS
CLASS A SHARES CLASS B SHARES
______________________________ ______________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIOD ENDED 9/30/96 Sales Charge Sales Charge (4.5%) PERIOD ENDED 9/30/96 Redemption Redemption*
____________ ________ _________ ____________ ______ __________
<S> <C> <C> <C> <C> <C>
From Inception (12/29/95) 48.24% 41.56% From Inception (12/29/95) 47.14% 43.14%
CLASS C SHARES CLASS R SHARES
______________________________ ______________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 9/30/96 No Redemption Redemption** PERIOD ENDED 9/30/96
____________ ________ _________ ____________
From Inception (12/29/95) 47.27% 46.27% From Inception (12/29/95) 48.38%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A,
Class B, Class C and Class R shares of Premier Growth and Income Fund on
12/29/95 (Inception Date) to a $10,000 investment made in the Standard &
Poor's 500 Composite Stock Price Index on that date. All dividends and
capital gain distributions are reinvested.
The Fund's performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares, the maximum contingent deferred sales
charge on Class B and Class C shares and all other applicable fees and
expenses on all classes. The Standard & Poor's 500 Composite Stock Price
Index is a widely accepted, unmanaged index of overall stock market
performance, which does not take into account charges, fees and other
expenses. Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
* The maximum contingent deferred sales charge for Class B shares is 4% and
is reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
PREMIER GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1996
COMMON STOCKS-77.5% SHARES VALUE
_______ ______
<S> <C> <C> <C>
BANKING-2.9% Bank of Boston............................. 35,000 $ 2,025,625
______
BASIC AND
PROCESS INDUSTRIES-4.0% Crompton & Knowles......................... 100,000 1,637,500
Thermo Ecotek.............................. 25,000 (a) 571,875
Thermo Fibergen (Units).................... 50,000 (a) 631,250
______
2,840,625
______
CAPITAL GOODS-12.0% Deere & Co................................. 40,000 1,680,000
Potash Corp. Saskatchewan.................. 20,000 1,462,500
Sundstrand................................. 50,000 1,950,000
Thiokol.................................... 15,000 703,125
Titan Wheel International.................. 50,000 750,000
York International......................... 40,000 1,935,000
______
8,480,625
______
CONSUMER-11.3% Gargoyles.................................. 19,000 (a) 403,750
General Nutrition.......................... 75,000 (a) 1,317,188
Loehmann's................................. 30,000 (a) 804,375
Nabisco Holdings, Cl. A.................... 40,000 1,265,000
Oakley..................................... 50,000 (a) 2,125,000
OfficeMax.................................. 150,000 (a) 2,100,000
______
8,015,313
______
ENERGY-6.3% Amerada Hess............................... 25,000 1,321,875
Louisiana Land & Exploration............... 15,000 789,375
UGI........................................ 100,000 2,350,000
______
4,461,250
______
HEALTH CARE-4.3% Baxter International....................... 65,000 3,038,750
______
MEDIA/ENTERTAINMENT-7.0% Tele-Comm Liberty Media Group, Cl. A ...... 50,000 1,431,250
Time Warner................................ 50,000 1,931,250
Viacom, Cl. B.............................. 45,000 (a) 1,597,500
______
4,960,000
______
MINING AND METALS-1.3% Brascan, Cl. A............................. 50,000 925,000
______
REAL ESTATE-1.4% Merry Land & Investment.................... 45,000 961,875
______
TECHNOLOGY-14.6% Advanced Fibre Communications.............. 40,200 (a) 1,005,000
Atmel...................................... 50,000 (a) 1,543,750
Cadence Design System...................... 9,800 (a) 350,350
Checkfree.................................. 80,000 (a) 1,600,000
GT Interactive Software.................... 30,000 (a) 682,500
Informix................................... 70,000 (a) 1,951,250
LSI Logic.................................. 50,000 (a) 1,162,500
Mercury Interactive........................ 50,000 (a) 693,750
National Semiconductor..................... 25,000 (a) 503,125
PREMIER GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ ______
TECHNOLOGY (CONTINUED) Structural Dynamics Research............... 35,000 (a) $ 835,625
______
10,327,850
______
TELECOMMUNICATIONS-6.0% GTE........................................ 60,000 2,310,000
SBC Communications......................... 40,000 1,925,000
______
4,235,000
______
TRANSPORTATION-3.7% Canadian Pacific........................... 50,000 1,156,250
Union Pacific.............................. 20,000 1,465,000
______
2,621,250
______
UTILITIES-2.7% Entergy.................................... 70,000 1,890,000
______
TOTAL COMMON STOCKS
(cost $51,813,588)....................... $54,783,163
======
CONVERTIBLE PREFERRED STOCKS-4.5%
MEDIA/ENTERTAINMENT-1.1% TCI Communications, Ser. A, $2.125......... 20,000 $ 797,500
______
TELECOMMUNICATIONS-3.4% AirTouch Communications, Ser. C, 4.25%..... 50,000 2,375,000
______
TOTAL CONVERTIBLE PREFERRED STOCKS
(cost $3,355,070)........................ $ 3,172,500
======
PRINCIPAL
CONVERTIBLE CORPORATE NOTES AND BONDS-6.9% AMOUNT
_______
CONSUMER-5.7% Home Depot, Sub. Notes,
3.25%, 10/01/2001........................ $..2,000,000 $ 2,042,500
Pep Boys, Sub. Notes,
Zero Coupon, 9/20/2011................... 3,500,000 1,964,375
______
4,006,875
______
HEALTH CARE-1.2% Complete Management, Sub. Deb.,
8%, 8/15/2003............................ 700,000 856,625
______
TOTAL CONVERTIBLE CORPORATE NOTES
AND BONDS
(cost $4,634,360)........................ $ 4,863,500
======
PREMIER GROWTH AND INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1996
PRINCIPAL
SHORT-TERM INVESTMENTS-11.8% AMOUNT VALUE
_______ ______
U.S. TREASURY BILLS: 5.06%, 10/3/1996........................... $ 14,000 $ 13,996
5.02%, 10/10/1996.......................... 170,000 169,796
5.30%, 10/17/1996.......................... 145,000 144,685
5.14%, 11/7/1996........................... 500,000 497,470
5.15%, 11/14/1996.......................... 802,000 797,172
5.07%, 11/29/1996.......................... 1,802,000 1,787,440
5.19%, 12/5/1996........................... 909,000 900,837
5.06%, 12/12/1996.......................... 4,050,000 4,009,824
______
TOTAL SHORT-TERM INVESTMENTS
(cost $8,319,675)........................ $ 8,321,220
======
TOTAL INVESTMENTS (cost $68,122,693)............................................ 100.7% $71,140,383
==== ======
LIABILITIES, LESS CASH AND RECEIVABLES.......................................... (.7%) $ (460,154)
==== ======
NET ASSETS...................................................................... 100.0% $70,680,229
==== ======
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
PREMIER GROWTH AND INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996
ASSETS:
Investments in securities, at value
(cost $68,122,693)-see statement...................................... $71,140,383
Cash.................................................................... 454,398
Receivable for investment securities sold............................... 5,631,676
Receivable for subscriptions to Common Stock............................ 654,888
Dividends and interest receivable....................................... 115,830
Prepaid expenses........................................................ 64,386
Due from The Dreyfus Corporation and affiliates......................... 15,847
______
78,077,408
LIABILITIES:
Due to Distributor...................................................... $ 36,808
Payable for investment securities purchased............................. 7,234,360
Payable for Common Stock redeemed....................................... 80,575
Accrued expenses........................................................ 45,436 7,397,179
_____ ______
NET ASSETS ................................................................ $70,680,229
======
REPRESENTED BY:
Paid-in capital......................................................... $66,072,731
Accumulated undistributed investment income-net......................... 22,947
Accumulated undistributed net realized gain on investments.............. 1,566,861
Accumulated net unrealized appreciation on investments-Note 4........... 3,017,690
______
NET ASSETS at value......................................................... $70,680,229
======
NET ASSET VALUE per share:
Class A Shares
200 million shares of Common Stock authorized
($30,329,919 / 1,644,316 shares of Common Stock outstanding).......... $18.45
======
Class B Shares
200 million shares of Common Stock authorized
($37,534,132 / 2,043,282 shares of Common Stock outstanding).......... $18.37
======
Class C Shares
200 million shares of Common Stock authorized
($2,642,316 / 143,570 shares of Common Stock outstanding)............. $18.40
======
Class R Shares
200 million shares of Common Stock authorized
($173,862 / 9,437 shares of Common Stock outstanding)................. $18.42
======
See notes to financial statements.
PREMIER GROWTH AND INCOME FUND
STATEMENT OF OPERATIONS
FROM DECEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $1,656 foreign taxes withheld at source)....... $ 308,009
Interest.............................................................. 262,852
_____
TOTAL INCOME...................................................... $ 570,861
EXPENSES:
Management fee-Note 3(a).............................................. 174,186
Distribution fees-Note 3 (b).......................................... 95,424
Shareholder servicing costs-Note 3(c)................................. 87,232
Registration fees..................................................... 48,789
Legal fees............................................................ 47,490
Audit fees............................................................ 9,000
Prospectus and shareholders' reports.................................. 8,728
Custodian fees-Note 3(c).............................................. 3,632
Directors' fees and expenses-Note 3(d)................................ 2,509
Miscellaneous......................................................... 1,757
_____
TOTAL EXPENSES.................................................... 478,747
Less-reduction in management fee due to undertaking-Note 3(a)......... 93,014
_____
NET EXPENSES...................................................... 385,733
_____
INVESTMENT INCOME-NET............................................. 185,128
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 4:
Net realized gain on investments........................................ $1,566,861
Net unrealized appreciation on investments.............................. 3,017,690
_____
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 4,584,551
_____
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $4,769,679
=====
See notes to financial statements.
PREMIER GROWTH AND INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
FROM DECEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996
OPERATIONS:
Investment income-net................................................................... $ 185,128
Net realized gain on investments........................................................ 1,566,861
Net unrealized appreciation on investments for the period............................... 3,017,690
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............................. 4,769,679
______
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................................ (109,766)
Class B shares........................................................................ (49,896)
Class C shares........................................................................ (1,244)
Class R shares........................................................................ (1,275)
______
TOTAL DIVIDENDS................................................................... (162,181)
______
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................................ 34,427,601
Class B shares........................................................................ 38,453,822
Class C shares........................................................................ 3,604,147
Class R shares........................................................................ 664,097
Dividends reinvested:
Class A shares........................................................................ 100,028
Class B shares........................................................................ 41,499
Class C shares........................................................................ 829
Class R shares........................................................................ 1,275
Cost of shares redeemed:
Class A shares........................................................................ (6,181,710)
Class B shares........................................................................ (2,996,279)
Class C shares........................................................................ (1,311,627)
Class R shares........................................................................ (730,951)
______
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............................ 66,072,731
______
TOTAL INCREASE IN NET ASSETS.................................................... 70,680,229
NET ASSETS:
Beginning of period..................................................................... -
______
End of period (including undistributed investment
income-net of $22,947 on September 30, 1996).......................................... $70,680,229
======
</TABLE>
<TABLE>
<CAPTION>
SHARES
____________________________________________________________________
CLASS A CLASS B CLASS C CLASS R
______ _______ _______ ______
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 1,979,771 2,212,839 216,822 49,451
Shares issued for dividends reinvested. 5,502 2,293 46 74
Shares redeemed........................ (340,957) (171,850) (73,298) (40,088)
______ _______ _______ ______
NET INCREASE IN SHARES OUTSTANDING 1,644,316 2,043,282 143,570 9,437
====== ======= ======= ======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER GROWTH AND INCOME 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 the period from December 29, 1995
(commencement of operations) to September 30, 1996. This information has been
derived from the Fund's financial statements.
PER SHARE DATA: CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS R SHARES
________ ________ _______ ________
<S> <C> <C> <C> <C>
Net asset value, beginning of period... $12.50 $12.50 $12.50 $12.50
___ ___ ___ ___
INVESTMENT OPERATIONS:
Investment income-net.................. .10 .03 .03 .43
Net realized and unrealized gain
on investments....................... 5.94 5.87 5.88 5.61
___ ___ ___ ___
TOTAL FROM INVESTMENT OPERATIONS..... 6.04 5.90 5.91 6.04
___ ___ ___ ___
DISTRIBUTIONS;
Dividends from investment income-net... (.09) (.03) (.01) (.12)
___ ___ ___ ___
Net asset value, end of period......... $18.45 $18.37 $18.40 $18.42
=== === === ===
TOTAL INVESTMENT RETURN(1)................. 48.24% 47.14% 47.27% 48.38%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(1) .94% 1.52% 1.52% .79%
Ratio of net investment income to average
net assets(1)........................ .92% .34% .30% 1.01%
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation(1)........... .30% .30% .30% .30%
Portfolio Turnover Rate(1)............. 205.64% 205.64% 205.64% 205.64%
Average commission rate paid(2)........ $.2413 $.2413 $.2413 $.2413
Net Assets, end of period (000's Omitted) $30,330 $37,534 $2,642 $174
(1) Not annualized.
(2) The Fund is required to disclose its average commission rate paid per share for purchases and sales of investment
securities.
See notes to financial statements.
</TABLE>
PREMIER GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS
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. ("Mellon").
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.
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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: 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
PREMIER GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) 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 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-LINE OF CREDIT:
The Fund participates with other Dreyfus-managed Funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ended September 30, 1996, the Fund did not
borrow under the line of credit.
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 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 the value of the Fund's average daily net assets. The
reduction in management fee, pursuant to the undertaking, amounted to $93,014
during the period ended September 30, 1996.
PREMIER GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The undertaking may be extended, modified or terminated by the Manager,
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. During
the period ended September 30, 1996, $86,590 was charged to the Fund for the
Class B shares and $8,834 was charged to the Fund for the Class C shares.
(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. During the period ended September 30,
1996, $25,466, $28,863 and $2,945 were charged to Class A, Class B and Class
C shares, respectively, 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 $7,946 during the period ended September 30, 1996.
Effective May 10, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. During the period from May
10, 1996 through September 30, 1996, $2,519 was paid to Mellon pursuant to
the custody agreement.
(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:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended September 30, 1996,
amounted to $110,048,974 and $51,813,704, respectively.
At September 30, 1996, accumulated net unrealized appreciation on
investments was $3,017,690, consisting of $3,796,522 gross unrealized
appreciation and $778,832 gross unrealized depreciation.
At September 30, 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 GROWTH AND INCOME FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
PREMIER GROWTH AND INCOME FUND
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Growth and Income Fund
(one of the Funds constituting Premier Equity Funds, Inc.) as of September
30, 1996, and the related statements of operations and changes in net assets
and financial highlights for the period from December 29, 1995 (commencement
of operations) to September 30, 1996. 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 audit.
We conducted our audit 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 verification by
examination of securities held by the custodian as of September 30, 1996 and
confirmation of securities not held by the custodian by correspondence with
others. 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 audit provides 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 Growth and Income Fund at September 30, 1996, and the
results of its operations, the changes in its net assets and the financial
highlights for the period from December 29, 1995 to September 30, 1996, in
conformity with generally accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
November 5, 1996
PREMIER EQUITY FUNDS, INC.
PREMIER GROWTH AND INCOME FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 320AR969
Annual Report
Premier Growth and
Income Fund
September 30, 1996
Dreyfus lion/2hres logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER AGGRESSIVE GROWTH FUND CLASS A SHARES AND
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
STANDARD PREMIER
& POOR'S 500 AGGRESSIVE
PERIOD COMPOSITE STOCK GROWTH FUND
PRICE INDEX * (CLASS A SHARES)
6/23/69 10,000 9,549
9/30/69 9,609 9,610
9/30/70 9,023 9,091
9/30/71 10,882 11,886
9/30/72 12,598 13,893
9/30/73 12,729 12,625
9/30/74 7,772 8,029
9/30/75 10,736 10,904
9/30/76 14,004 13,350
9/30/77 13,436 14,574
9/30/78 15,044 18,150
9/30/79 16,938 22,085
9/30/80 20,527 30,028
9/30/81 19,983 26,375
9/30/82 21,964 30,637
9/30/83 31,703 40,421
9/30/84 33,202 43,382
9/30/85 38,016 52,368
9/30/86 50,083 66,651
9/30/87 71,829 95,964
9/30/88 62,929 79,032
9/30/89 83,664 94,170
9/30/90 75,934 87,668
9/30/91 99,541 114,206
9/30/92 110,531 129,376
9/30/93 124,867 144,949
9/30/94 129,462 142,780
9/30/95 167,963 158,783
9/30/96 202,093 157,651
*Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PREMIER GROWTH AND INCOME FUND CLASS A SHARES, CLASS B
SHARES, CLASS C SHARES AND CLASS R SHARES AND THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
STANDARD PREMIER PREMIER PREMIER PREMIER
& POOR'S GROWTH AND GROWTH AND GROWTH AND GROWTH AND
500 INCOME INCOME INCOME INCOME
COMPOSITE FUND FUND FUND FUND
STOCK (CLASS A (CLASS B (CLASS C (CLASS R
PERIOD PRICE INDEX* SHARES) SHARES) SHARES) SHARES)
12/29/95 10,000 9,549 10,000 10,000 10,000
3/31/96 10,537 12,462 13,002 13,008 13,054
6/30/96 11,009 13,758 14,328 14,339 14,422
9/30/96 11,349 14,156 14,314 14,627 14,838
*Source: Lipper Analytical Services, Inc.
