Registration No. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Pre-Effective Amendment No. Post-Effective Amendment No.
(Check appropriate box or boxes)
PREMIER EQUITY FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
(212) 922-6000
(Area Code and Telephone Number)
c/o The Dreyfus Corporation
200 PARK AVENUE, NEW YORK, NEW YORK 10166
(Address of Principal Executive Offices: Number,
Street, City, State, Zip Code)
(Name and Address of Agent for Service)
Mark N. Jacobs, Esq.
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Approximate Date of Proposed Public Offering: As soon as
practicable after this Registration Statement is declared effective.
It is proposed that this filing will become effective on October 9,
1996 pursuant to Rule 488.
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Registrant has previously filed a declaration of indefinite registration
of its shares pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended; accordingly, no fee is payable herewith. Registrant's Rule 24f-2
Notice for the fiscal year ended September 30, 1995 was filed on November 22,
1995.
<PAGE>
PREMIER EQUITY FUNDS, INC.
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
Prospectus/Proxy
Form N-14 Item No. Statement Caption
PART A
Item 1. Beginning of Registration Statement
and Outside Front of Cover Page
of Prospectus Cover Page
Item 2. Beginning and Outside Back Cover
Page of Prospectus Cover Page
Item 3. Synopsis Information and
Risk Factors Summary
Item 4. Information About the Transaction Letter to Shareholders;
Proposal No. 1;
Comparison of the Fund
and Acquiring Series
Item 5. Information About the Registrant Letter to Shareholders;
Comparison of the Fund
and Acquiring Series
Item 6. Information About the Company
Being Acquired Letter to Shareholders;
Comparison of the Fund
and Acquiring Series
Item 7. Voting Information Letter to Shareholders;
Voting Information
Item 8. Interest of Certain Persons
and Experts Not Applicable
Item 9. Additional Information Required
for Reoffering by Persons Deemed
to be Under-writers Not Applicable
Statement of Additional
PartB Information Caption
Item 10. Cover Page Cover Page
Item 11. Table of Contents Not Applicable
Item 12. Additional Information About
the Registrant Statement of Additional
Information of Premier
Equity Funds, Inc.
dated July 1, 19961
Item 13. Additional Information About
the Company Being Acquired Statement of Additional
Information of Premier
Strategic Growth Fund
dated May 1, 19962
Item 14. Financial Statements Statement of Additional
Information of Premier
Equity Funds, Inc.
dated July 1, 19961;
Statement of Additional
Information of Premier
Strategic Growth Fund
dated May 1, 19962
PART C
Item 15. Indemnification
Item 16. Exhibits
Item 17. Undertakings
1 Incorporated herein by reference to the Registration Statement of the
Registrant on Form N-1A dated June 27, 1996 (File No. 2-30806).
2 Incorporated herein by reference to the Registration Statement of
Premier Strategic Growth Fund on Form N-1A dated May 1, 1996 (File
No. 33-11677).
<PAGE>
PRELIMINARY COPY
PREMIER STRATEGIC GROWTH FUND
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Shareholder:
As a shareholder of Premier Strategic Growth Fund (the
"Fund"), you are entitled to vote on the proposal described below and in the
enclosed materials.
In order to eliminate the duplication of funds within the Premier Family of
Funds, management of the Fund has determined that it is advantageous to combine
the Fund with Premier Aggressive Growth Fund (the "Acquiring Series"), a series
of Premier Equity Funds, Inc. with the same investment objective and
substantially similar management policies. The Acquiring Series and the Fund are
each advised by The Dreyfus Corporation and have the same primary portfolio
manager. Thus, the combination of the Fund and the Acquiring Series is expected
to permit investment personnel common to both the Fund and the Acquiring Series
to concentrate their efforts on the management of one fund rather than having to
divide their attention between two substantially similar funds. The Acquiring
Series and the Fund differ in certain respects which are described in the
enclosed Prospectus/Proxy Statement.
The proposal provides that the Fund exchange (the
"Exchange") all of its assets, subject to its liabilities, attributable to its
Class A, Class B, Class C and Class R shares, for Class A, Class B, Class C and
Class R shares, respectively, of the Acquiring Series (collectively, the
"Acquiring Series Shares"). Promptly thereafter, the Fund will distribute pro
rata the Acquiring Series Shares received in the Exchange to its shareholders in
complete liquidation of the Fund. Thus, each shareholder will receive for his or
her Class A, Class B, Class C or Class R shares of the Fund a number of
corresponding Acquiring Series Class A, Class B, Class C or Class R shares equal
to the value of such Fund shares as of the date of the Exchange. No sales charge
or contingent deferred sales charge will be imposed at the time of the Exchange.
The Exchange will not result in the imposition of Federal income tax on you.
Further information about the transaction is contained in the enclosed
materials, which you should review carefully. You are entitled to vote on the
proposed transaction with respect to each Class in which you are a shareholder.
Please take the time to consider the enclosed materials and then vote by
completing, dating and signing the enclosed proxy card. A self-addressed,
postage-paid envelope has been enclosed for your convenience.
THE FUND'S BOARD MEMBERS RECOMMEND THAT SHAREHOLDERS VOTE IN FAVOR OF THE
PROPOSED TRANSACTION.
If you have any questions after considering the enclosed materials, please
feel free to call 1-800-645-6561 between the hours of 9:00 a.m. and 5:30 p.m.
(New York time), Monday through Friday. Sincerely,
Marie E. Connolly,
President
October 10, 1996
<PAGE>
PRELIMINARY COPY
PREMIER STRATEGIC GROWTH FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders:
A Special Meeting of Shareholders of Premier Strategic Growth Fund (the
"Fund") will be held at the offices of The Dreyfus Corporation, 200 Park Avenue,
7th Floor, New York, New York 10166, on Monday, December 16, 1996 at 10:00 a.m.
for the following purposes:
1. To consider an Agreement and Plan of
Reorganization (the "Plan") for the Fund providing for the transfer of
all or substantially all of its assets, subject to its liabilities,
attributable to its Class A, Class B, Class C and Class R shares, to
Premier Aggressive Growth Fund (the "Acquiring Series"), a series of
Premier Equity Funds, Inc., in exchange (the "Exchange") for
corresponding Class A, Class B, Class C and Class R shares of the
Acquiring Series and the assumption by the Acquiring Series of stated
liabilities. Acquiring Series Class A, Class B, Class C and Class R
shares received in the Exchange will be distributed by the Fund to its
Class A, Class B, Class C and Class R shareholders, respectively, in
liquidation of the Fund, after which the Fund will be dissolved; and
2. To transact such other business as may properly
come before the meeting, or any adjournment or adjournments
thereof.
Shareholders of record at the close of business on October 1, 1996, will be
entitled to receive notice of and to vote at the meeting.
By Order of the Board of Trustees
John E. Pelletier,
Secretary
New York, New York
October 10, 1996
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WE NEED YOUR PROXY VOTE IMMEDIATELY
A SHAREHOLDER MAY THINK HIS VOTE IS NOT IMPORTANT, BUT IT IS VITAL. BY
LAW, THE MEETING OF SHAREHOLDERS OF THE FUND WILL HAVE TO BE ADJOURNED
WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM OF ITS SHARES
ELIGIBLE TO VOTE IS REPRESENTED. IN THAT EVENT, THE FUND, AT ITS
SHAREHOLDERS' EXPENSE, WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO
ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE CRITICAL TO ENABLE THE
FUND TO HOLD THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD
IMMEDIATELY. YOU AND ALL OTHER SHAREHOLDERS WILL BENEFIT FROM YOUR
COOPERATION.
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<PAGE>
PRELIMINARY COPY
OCTOBER 10, 1996
PROSPECTUS/PROXY STATEMENT FOR
PREMIER STRATEGIC GROWTH FUND
Special Meeting of Shareholders
to be held on Monday, December 16, 1996
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Premier Strategic Growth Fund (the
"Fund"), to be used at the Special Meeting of Shareholders (the "Meeting") of
the Fund to be held on Monday, December 16, 1996 at 10:00 a.m., at the offices
of The Dreyfus Corporation, 200 Park Avenue, 7th Floor, New York, New York
10166, for the purposes set forth in the accompanying Notice of Special Meeting
of Shareholders. Shareholders of record at the close of business on October 1,
1996 (each, a "Shareholder" and, collectively, the "Shareholders") are entitled
to receive notice of and to vote at the Meeting. Shareholders are entitled to
one vote for each share of beneficial interest of the Fund, par value $.001 per
share ("Fund Share"), held and fractional votes for each fractional Fund Share
held. Class A, Class B, Class C and Class R shareholders will vote together on
the Proposal. Fund Shares represented by executed and unrevoked proxies will be
voted in accordance with the specifications made thereon. If the enclosed form
of proxy is executed and returned, it nevertheless may be revoked by giving
another proxy or by letter or telegram directed to the Fund, which must indicate
the Shareholder's name and account number. To be effective, such revocation must
be received before the Meeting. Any Shareholder who attends the Meeting in
person may vote by ballot at the Meeting, thereby canceling any proxy previously
given. As of July 31, 1996, the following numbers of Fund Shares were issued and
outstanding:
Shares Outstanding
Class A 1,138,457
Class B 11,271
Class C 1,354
Class R 420
Proxy materials will be mailed to shareholders of record on or about
October 10, 1996. The Fund's principal executive offices are located at 200 Park
Avenue, New York, New York 10166.
It is proposed that the Fund transfer all or substantially all of its
assets, subject to its liabilities, attributable to its Class A, Class B, Class
C and Class R shares, to Premier Aggressive Growth Fund (the "Acquiring
Series"), a series of Premier Equity Funds, Inc. (the "Company"), in exchange
(the "Exchange") for corresponding Class A shares ("Acquiring Series Class A
Shares"), Class B shares ("Acquiring Series Class B Shares"), Class C shares
("Acquiring Series Class C Shares") and Class R shares ("Acquiring Series Class
R Shares" and, together with Acquiring Series Class A Shares, Acquiring Series
Class B Shares and Acquiring Series Class C Shares, the "Acquiring Series
Shares") of the Acquiring Series, all as more fully described herein. Upon
consummation of the Exchange, Acquiring Series Shares received by the Fund will
be distributed to its Shareholders, with each Shareholder receiving a pro rata
distribution of Acquiring Series Shares (or fractions thereof) for Fund Shares
held prior to the Exchange. Thus, it is contemplated that each Class A, Class B,
Class C and Class R Shareholder will receive for the Shareholder's Fund Shares a
number of Acquiring Series Class A Shares, Acquiring Series Class B Shares,
Acquiring Series Class C Shares and Acquiring Series Class R Shares (or
fractions thereof), respectively, equal in value to the aggregate net asset
value of such Fund Shares as of the date of the Exchange.
The Acquiring Series is an open-end, management investment company. The
Acquiring Series and the Fund have the same investment adviser, primary
portfolio manager, distributor and investment objective, substantially similar
management policies, and differ substantively only to the extent set forth
herein.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Acquiring Series that
Shareholders should know before voting on the Proposal or investing in the
Acquiring Series. The Acquiring Series' prospectus dated January 8, 1996 (the
"Acquiring Series Prospectus"), the Acquiring Series' Annual Report for the
fiscal year ended September 30, 1995, the Acquiring Series' Semi-Annual Report
for the six months ended March 31, 1996 and the Fund's prospectus dated May 1,
1996 (the "Fund Prospectus"), each accompany this Prospectus/Proxy Statement and
are incorporated herein by reference.
Additional information, contained in a Statement of Additional Information
dated October 9, 1996 forming a part of the Company's Registration Statement on
Form N-14 (File No. 333- ), has been filed with the Securities and Exchange
Commission and is available without charge by calling 1-800-645- 6561 or writing
to the Acquiring Series at its principal executive offices located at 200 Park
Avenue, New York, New York 10166. The Statement of Additional Information is
incorporated herein by reference in its entirety.
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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/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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MUTUAL FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR BY ANY OTHER AGENCY. ALL MUTUAL FUND
SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
<PAGE>
TABLE OF CONTENTS
PAGE
Summary...........................................................
Reasons for the Exchange..........................................
Information about the Exchange....................................
Additional Information about the Acquiring
Series and Fund.................................................
Voting Information................................................
Financial Statements and Experts..................................
Other Matters.....................................................
Notice to Banks, Broker/Dealers and
Voting Trustees and Their Nominees..............................
<PAGE>
APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION
PROVIDING FOR THE TRANSFER OF ALL OR SUBSTANTIALLY
ALL OF THE ASSETS OF THE FUND TO PREMIER AGGRESSIVE
GROWTH FUND
SUMMARY
This Summary is qualified by reference to the more complete information
contained elsewhere in this Prospectus/Proxy Statement, the Acquiring Series
Prospectus, the Fund Prospectus and the form of Agreement and Plan of
Reorganization attached to this Prospectus/Proxy Statement as Exhibit A.
PROPOSED TRANSACTION. The Fund's Board, including the Board members who are
not "interested persons" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")), has unanimously approved an Agreement and Plan of
Reorganization (the "Plan"). The Plan provides that, subject to the requisite
approval of its Shareholders, on the date of the Exchange the Fund shall assign,
transfer and convey to the Acquiring Series all of the assets (subject to the
liabilities) of the Fund, including all securities and cash, attributable to its
Class A, Class B, Class C and Class R shares, in exchange for Acquiring Series
Class A Shares, Acquiring Series Class B Shares, Acquiring Series Class C Shares
and Acquiring Series Class R Shares, respectively, having an aggregate net asset
value equal to the value of the net assets of the Fund's corresponding Class
acquired. The Fund will distribute, respectively, all Acquiring Series Shares
received by it among its Shareholders so that each Class A, Class B, Class C and
Class R Shareholder will receive a pro rata distribution of Acquiring Series
Class A Shares, Acquiring Series Class B Shares, Acquiring Series Class C Shares
and Acquiring Series Class R Shares (or fractions thereof), respectively, having
an aggregate net asset value equal to the aggregate net asset value of the
Shareholder's Fund Shares as of the date of the Exchange. Thereafter, the Fund
will be dissolved.
As a result of the Exchange, each Shareholder will cease to be a
shareholder of the Fund and will become a shareholder of the Acquiring Series as
of the close of business on the closing date of the Exchange. No sales charge or
contingent deferred sales charge ("CDSC") will be imposed at the time of the
Exchange.
The Fund's Board has concluded unanimously that the Exchange would be in
the best interests of Shareholders of the Fund and the interests of existing
Shareholders of the Fund would not be diluted as a result of the transactions
contemplated thereby. See "Reasons for the Exchange."
TAX CONSEQUENCES. As a condition to the closing of the Exchange, the Fund
and Acquiring Series will receive an opinion of counsel to the effect that, for
Federal income tax purposes, (a) no gain or loss will be recognized by Fund
Shareholders as a result of the Exchange, (b) the holding period and aggregate
tax basis of Acquiring Series Shares received by a Fund Shareholder will be the
same as the holding period and aggregate tax basis of the Shareholder's Fund
Shares, and (c) the holding period and tax basis of the Fund's assets
transferred to the Acquiring Series as a result of the Exchange will be the same
as the holding period and tax basis of such assets held by the Fund immediately
prior to the Exchange. See "Information about the Exchange--Federal Income Tax
Consequences."
COMPARISON OF THE FUND AND ACQUIRING SERIES. The following discussion is a
summary of certain parts of the Fund Prospectus and the Acquiring Series
Prospectus. Information contained herein is qualified by the more complete
information set forth in the Fund Prospectus and the Acquiring Series
Prospectus, which are incorporated herein by reference.
GENERAL. Each of the Fund and the Acquiring Series is an open-end,
management investment company advised by The Dreyfus Corporation ("Dreyfus").
The Fund and the Acquiring Series each offers four classes of shares--Class A,
Class B, Class C and Class R. The investment objective of the Acquiring
Series--capital growth--is identical to that of the Fund.
The management policies of the Fund and the Acquiring Series are
substantially similar. The Fund and the Acquiring Series each seek to achieve
its investment objective by investing principally in publicly-traded common
stocks. The Acquiring Series and Fund may engage in the same investment
techniques, such as leveraging, lending portfolio securities, options and
futures transactions, foreign currency transactions and short- selling. The Fund
and the Acquiring Series may invest in preferred stocks and debt securities when
management believes that such securities offer opportunities for capital growth.
The Fund and the Acquiring Series each may invest up to 30% of the value of its
assets in the securities of foreign companies which are not publicly-traded in
the United States and the debt securities of foreign governments. The Acquiring
Series may invest in American, European and Continental Depositary Receipts,
while the Fund may invest in American Depositary Receipts. The Fund may invest
in securities issued by registered and unregistered investment companies to the
extent permitted under the 1940 Act, whereas, the Acquiring Series may invest in
such securities only under certain limited conditions.
For a more complete discussion of the Fund's and the Acquiring Series'
management policies, see "Description of the Fund" and "Appendix" in the Fund
Prospectus and the Acquiring Series Prospectus.
The Company is a corporation organized under the laws of the State of
Maryland. The Fund is an unincorporated business trust organized under the laws
of the Commonwealth of Massachusetts.
FUNDAMENTAL POLICIES. The Acquiring Series and the Fund have adopted
certain investment restrictions as fundamental policies which cannot be changed
without approval by the holders of a majority (as defined in the 1940 Act) of
their respective outstanding voting shares.
The Acquiring Series is a DIVERSIFIED investment company that may not
invest more than 5% of the value of its total assets in the obligations of a
single issuer (except securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities may be purchased without regard to such
limitation) or purchase more than 10% of the voting securities of any one
issuer. Accordingly, the Acquiring Series had adopted as a fundamental policy
these percentage restrictions. The Fund is a NON-DIVERSIFIED investment company,
meaning that the proportion of its assets that may be invested in the securities
of a single issuer is not limited by the 1940 Act. The Acquiring Series and the
Fund may borrow money to the extent permitted under the 1940 Act. The Fund may
lend its portfolio securities in an amount not exceeding 33-1/3% of the value of
its total assets, while the Acquiring Series may lend its portfolio securities
in an amount not exceeding 10% of the value of its total assets.
The Fund has adopted as fundamental policies restrictions on issuing any
senior security and purchasing securities on margin, both of which also apply to
the Acquiring Series pursuant to the provisions of the 1940 Act.
The 1940 Act requires that a relatively limited number of investment
policies and restrictions be designated as fundamental policies and the
Acquiring Series and the Fund have adopted such policies with certain
differences noted above. The Acquiring Series has designated a number of other
policies as fundamental, in large part in response to certain state regulatory,
business or industry conditions that existed when the Acquiring Series was
formed. These include restrictions on (a) purchasing securities of any company
having less than three years' continuous operation if such purchase would cause
the value of the Acquiring Series' investments in all such companies to exceed
5% of the value of the Acquiring Series' assets, (b) purchasing securities of
other investment companies except under certain circumstances, (c) investing in
the securities of a company for the purpose of management or control, (d)
purchasing or retaining the securities of any issuer if those officers or
directors of the Company or Dreyfus owning individually more than 1/2 of 1% of
the securities of such issuer together own more than 5% of such securities, and
(e) purchasing any securities from or selling any securities to any of the
Company's officers or directors or firms of which any of them are members. The
Fund has adopted investment restrictions similar to those described in (a)
through (c) above as non-fundamental policies, which may be changed by a vote of
a majority of the Fund's Trustees without shareholder approval.
INITIAL SALES CHARGE ON CLASS A SHARES. The schedule of the initial sales
charge imposed on Acquiring Series Class A Shares and Fund Class A shares is
identical. In addition, Acquiring Series Class A Shares and Fund 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 after purchase are subject to the same
CDSC. See "How To Buy Shares--Class A Shares" in the relevant Prospectus for a
complete discussion of the initial sales charge.
CONTINGENT DEFERRED SALES CHARGE ON CLASS B AND CLASS C SHARES. The
schedule of the CDSC imposed at the time of redemption on Acquiring Series Class
B Shares and Fund Class B shares is identical. The CDSC imposed on any
redemption of Acquiring Series Class C Shares and Fund Class C shares within one
year after purchase also is identical. See "How to Redeem Shares--Contingent
Deferred Sales Charge" in the relevant Prospectus for a complete discussion of
the CDSC imposed on Class B and Class C shares.
FEES AND EXPENSES. The following information concerning fees and expenses
is derived from information set forth under the caption "Fee Table" in each of
the Acquiring Series Prospectus and the Fund Prospectus.
ANNUAL FUND
OPERATING EXPENSES
(as a percentage of average daily net assets):
Pro Forma
After
Exchange
PREMIER Premier Premier
STRATEGIC Aggressive Aggressive
GROWTH FUND Growth Fund Growth Fund
CLASS A Class A Class A
Management Fees .75% .75% .75%
12b-1 Fees NONE None None
Other Expenses 1.09% .36% .36%
Total Fund
Operating Expenses 1.84% 1.11% 1.11%
Pro Forma
After
Exchange
Premier Premier Premier
Strategic Aggressive Aggressive
Growth Fund Growth Fund Growth Fund
Class B Class B Class B
Management Fees .75% .75% .75%
12b-1 Fees .75 .75% .75%
Other Expenses 1.09% .36% .36%
Total Fund
Operating Expenses 2.59% 1.86% 1.86%
Pro Forma
After
Exchange
PREMIER Premier Premier
STRATEGIC Aggressive Aggressive
GROWTH FUND Growth Fund Growth Fund
Class C Class C Class C
Management Fees .75% .75% .75%
12b-1 Fees .75% .75% .75%
Other Expenses 1.09% .36% .36%
Total Fund
Operating Expenses 2.59% 1.86% 1.86%
Pro Forma
After
Exchange
Premier Premier Premier
Strategic Aggressive Aggressive
Growth Fund Growth Fund Growth Fund
Class R Class R Class R
Management Fees .75% .75% .75%
12b-1 Fees NONE None None
Other Expenses .84% .16% .16%
Total Fund
Operating Expenses 1.59% .91% .91%
Example
An investor would pay the following expenses(a) on a $1,000 investment, assuming
(1) 5% annual return and (2) except where noted, redemption at the end of each
time period:
Pro Forma
After
PREMIER Premier Exchange
STRATEGIC Aggressive Premier
GROWTH Growth Aggressive
FUND Fund Growth Fund
Class A Class A Class A
1 Year $ 63 $ 56 $ 56
3 Years $100 $ 79 $ 79
5 Years $140 $103 $103
10 Years $251 $174 $174
Pro Forma
After
PREMIER Premier Exchange
STRATEGIC Aggressive Premier
GROWTH FUND Growth Aggressive
Fund Growth Fund
Class B Class B Class B
1 Year $66/$26* $59/$19* $59/$19*
3 Years $111/$81* $88/$58* $88/$158*
5 Years $158/$138* $121/$101* $121/101*
10 Years $257** $180** $180**
Pro Forma
After
PREMIER Premier Exchange
STRATEGIC Aggressive Premier
GROWTH Growth Aggressive
FUND Fund Growth Fund
Class C Class C Class C
1 Year $ 36/$26* $ 29/$19* $ 29/$19*
3 Years $ 81 $ 58 $ 58
5 Years $138 $101 $101
10 Years $292 $218 $218
<PAGE>
Pro Forma
After
Premier Exchange
PREMIER Aggressive Premier
STRATEGIC Growth Aggressive
GROWTH FUND Fund Growth Fund
Class R Class R Class R
1 Year $ 16 $ 9 $ 9
3 Years $ 50 $ 27 $27
5 Years $ 87 $ 48 $48
10 Years $189 $106 $106
(a) The amounts listed in the Example reflect the maximum chargeable sales
charges or contingent deferred sales charges, as applicable.
* Assuming no redemption of shares.
** Ten year figure assumes conversion of Class B shares to Class A shares
at the end of the sixth year following the date of purchase.
Other Expenses for Class B, Class C and Class R shares are based on amounts
for Class A for the Fund's and the Acquiring Series' last fiscal year, as
applicable. Assuming the approval of the Exchange, Dreyfus believes that the
Acquiring Series' Class A, Class B, Class C and Class R Shares initially will
have annual Total Fund Operating Expenses as a percentage of average daily net
assets of approximately 1.11%, 1.86%, 1.86%, and .91%, respectively.
DISTRIBUTION PLAN. Acquiring Series Class B Shares and Acquiring Series
Class C Shares are subject to a Rule 12b-1 Plan which is identical to that
adopted by the Fund for its Class B and Class C shares. See "Distribution Plan
and Shareholder Services Plan--Distribution Plan" in the relevant Prospectus for
a complete discussion of the Rule 12b-1 Plan.
SHAREHOLDER SERVICES PLAN. Acquiring Series Class A Shares, Acquiring
Series Class B Shares and Acquiring Series Class C Shares are subject to a
Shareholder Services Plan which is identical to that adopted by the Fund for its
Class A, Class B and Class C shares. See "Distribution Plan and Shareholder
Series Plan--Shareholder Services Plan" in the relevant Prospectus for a
complete discussion of the Shareholder Services Plan.
INVESTMENT ADVISER. Dreyfus serves as the Fund's and Acquiring Series'
investment adviser and Michael L. Schonberg serves as the Fund's and Acquiring
Series' primary portfolio manager.
CAPITALIZATION. Each of the Fund and the Acquiring Series has classified
its shares into four classes--Class A, Class B, Class C and Class R. The
following table sets forth as of July 31, 1996 (1) the capitalization of each
class of the Fund's shares, (2) the capitalization of each class of the
Acquiring Series' shares and (3) the pro forma capitalization of each class of
the Acquiring Series' shares, as adjusted showing the effect of the Exchange had
it occurred on such date.
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
After
Exchange
Premier Premier Premier
Strategic Aggressive Aggressive
Growth Fund Growth Fund Growth Fund
CLASS A CLASS A CLASS A
<S> <C> <C> <C>
Total net assets.............. $42,110,997 $445,011,826 $487,122,823
Net asset value
per share..................... $ 36.99 $ 13.34 $ 13.34
Shares outstanding............ 1,138,457 33,353,383 36,510,129
Pro Forma
After
Exchange
Premier Premier Premier
Strategic Aggressive Aggressive
Growth Fund Growth Fund Growth Fund
CLASS B CLASS B CLASS B
Total net assets.................... $415,211 $11,397 $426,608
Net asset value
per share......................... $ 36.84 $ 13.29 $ 13.29
Shares outstanding.................. 11,271 858 32,100
Pro Forma
After
Exchange
Premier Premier Premier
Strategic Aggressive Aggressive
Growth Fund Growth Fund Growth Fund
CLASS C CLASS C CLASS C
Total net assets.................... $49,879 $13,443 $63,322
Net asset value
per share......................... $ 36.84 $ 13.28 $ 13.28
Shares outstanding................. 1,354 1,012 4,768
Pro Forma
After
Exchange
Premier Premier Premier
Strategic Aggressive Aggressive
Growth Fund Growth Fund Growth Fund
CLASS R CLASS R CLASS R
Total net assets.................... $15,533 $ 900 $16,433
Net asset value
per share......................... $ 37.01 $13.36 $ 13.36
Shares outstanding.................. 420 67 1,230
</TABLE>
PURCHASE PROCEDURES. The purchase procedures of the Fund and Acquiring
Series are identical. See "How to Buy Shares" in the relevant Prospectus for a
complete discussion of purchase procedures.
REDEMPTION PROCEDURES. The redemption procedures of the Fund and Acquiring
Series are identical. See "How to Redeem Shares" in the relevant Prospectus for
a complete discussion of redemption procedures.
DISTRIBUTIONS. The dividend and distributions policies of the Fund and
Acquiring Series are identical. See "Dividends, Distributions and Taxes" in the
relevant Prospectus for a complete discussion of such policies.
SHAREHOLDER SERVICES. The shareholder services offered by the Fund and
Acquiring Series are identical. See "Shareholder Services" in the relevant
Prospectus for a complete description of shareholder services.
CERTAIN ORGANIZATIONAL DIFFERENCES BETWEEN THE ACQUIRING SERIES AND THE
FUND. The Fund is a Massachusetts business trust and the rights of the Fund's
shareholders are governed by the Fund's Amended and Restated Agreement and
Declaration of Trust (the "Trust Agreement"), Bylaws and applicable
Massachusetts law. The Company is a Maryland corporation and the rights of the
Acquiring Series' shareholders are governed by the Corporation's Articles of
Amendment and Restatement (the "Charter"), Bylaws and the Maryland General
Corporation Law. Certain relevant differences between the two forms of
organization are summarized below.
CAPITALIZATION. The Company has issued transferable common stock, par value
$1.00 per share. The Company's Charter authorizes it to issue 800 million
shares, with 200 million allocated to the Acquiring Series. The Company's Board
may authorize an increase in the number of authorized shares and may reclassify
unissued shares to authorize additional classes of stock having terms and rights
determined by the Board, all without shareholder approval. Shareholders of the
Acquiring Series are entitled to receive pro rata dividends declared by its
Board and distributions upon liquidation.
The beneficial interests in the Fund are transferable shares, par value
$.001 per share. The Trust Agreement permits the Fund's Trustees to issue an
unlimited number of shares of beneficial interest and to allocate such shares
into an unlimited number of portfolios with rights determined by the Trustees,
all without shareholder approval. Fund shares represent equal proportionate
interests in the assets belonging to four classes of shares and are entitled to
receive dividends and other amounts as determined by its Trustees.
VOTING REQUIREMENTS. The Boards of the Fund and the Company are each
required to call a special meeting of shareholders for any purpose when
requested to do so in writing by the holders of not less than 30%, in the case
of the Fund, and 10%, in the case of the Acquiring Series, of the outstanding
shares entitled to vote.
Under the Trust Agreement, the Fund's shareholders are entitled to vote
only with respect to the following matters: (1) the election or removal of
Trustees if a meeting is called for such purpose; (2) the adoption of any
contract for which shareholder approval is required by the 1940 Act; (3) any
amendment of the Trust Agreement, other than amendments to change the Fund's
name, authorize additional series or classes of shares, supply any omission or
cure, correct or supplement any ambiguity or defective or inconsistent provision
contained therein; (4) the termination of the Fund to the extent and as provided
in the Trust Agreement; and (5) such additional matters relating to the Fund as
may be required by law, the Trust Agreement, the Trust's Bylaws, or any
registration of the Fund with the Securities and Exchange Commission (the
"Commission") or any state, or as the Trustees may consider necessary or
desirable. The Fund's shareholders also vote upon changes in fundamental
investment policies or restrictions.
The Trust Agreement provides that any question, except in respect of the
election of Trustees--which requires a plurality--and the removal of a
Trustee--which requires two-thirds of the outstanding shares entitled to vote
thereon--requires a majority of the votes cast at a meeting at which a quorum is
present, unless the 1940 Act requires a larger vote. On any matter submitted to
a vote of shareholders, all shares of the Fund then entitled to vote will be
voted in the aggregate as a single class without regard to classes of shares,
except (i) when required by the 1940 Act or when the Trustees shall have
determined that the matter affects one or more classes differently, shares will
be voted by individual class and (ii) when the Trustees have determined that the
matter affects only the interests of one or more classes, then only shareholders
of such classes will be entitled to vote thereon.
The Company's organizational documents provide that certain matters, such
as an amendment to the Charter, a merger, consolidation or transfer of all or
substantially all assets, dissolution and removal of a Director, require the
affirmative vote of a majority of the votes entitled to be cast; election of
Directors requires a plurality of votes cast; and other matters require the
approval of the affirmative vote of a majority of the votes cast at a meeting at
which a quorum is present. All holders of shares of stock vote as a single class
except as may otherwise be required by law pursuant to any applicable order,
rule or interpretation issued by the Commission, or otherwise, or except with
respect to any matter which affects only one or more classes of stock, in which
case only the holders of shares of the class or classes affected will be
entitled to vote.
The Trust Agreement provides that 30% of the outstanding shares shall
constitute a quorum for the transaction of business at a Fund shareholders'
meeting. The Company's Charter provides that the presence at an Acquiring Series
shareholders' meeting in person or by proxy of the holders of one-third of the
shares entitled to vote on a matter shall constitute a quorum. Matters requiring
a larger vote by law or under the organizational documents for the Fund or the
Company are not affected by such quorum requirements.
SHAREHOLDER LIABILITY. Under Maryland law, Acquiring Series' shareholders
have no personal liability as such for the Acquiring Series' acts or
obligations. Under Massachusetts law, shareholders of a Massachusetts business
trust, under certain circumstances, could be held personally liable for the
obligations of the business trust. However, the Trust Agreement disclaims
shareholder liability for acts or obligations of the Fund and requires that
notice of such disclaimer be given in every note, bond, contract or other
undertaking issued or entered into by or on behalf of the Fund or the Fund's
Trustees. The Trust Agreement provides for indemnification out of the Fund's
property for all losses and expenses of any shareholder held personally liable
for the obligations of the Fund solely by reason of his being or having been a
Fund shareholder and not because of his acts or omissions or some other reason.
Thus, the Fund considers the risk of a Fund shareholder incurring financial loss
on account of shareholder liability to be remote since it is limited to
circumstances in which a disclaimer is inoperative or the Fund itself would be
unable to meet its obligations. The Trust Agreement also provides that the Fund,
upon request, shall assume the defense of any claim made against any shareholder
for any act or obligation of the Fund and satisfy any judgment thereon.
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND TRUSTEES. Under the
Company's Charter and Maryland law, subject to the 1940 Act, a Director or
officer of the Company is not liable to the Company or Acquiring Series
shareholders for monetary damages except to the extent the person receives an
improper personal benefit or the person's action or failure to act was the
result of active and deliberate dishonesty and was material to the cause of
action adjudicated. In addition, a Director is entitled to indemnification
against judgments, penalties, fines, settlements and reasonable expenses unless
the person's act or omission was material to the cause of action and was
committed in bad faith or was the result of active and deliberate dishonesty or
the individual received an improper personal benefit (or, in a criminal case,
had reasonable cause to believe that his or her act or omission was unlawful).
Indemnification may be made against amounts recoverable by settlement of suits
brought by or in the right of the Company, except where the individual is
adjudged liable to the Company. The termination of a civil proceeding by
judgment, order or settlement does not create a presumption that the requisite
standard of conduct was not met. A Director or officer is entitled to advances
of expenses in the course of litigation if (i) such Director or officer
undertakes to repay such sums if indemnification is ultimately denied and
provides acceptable security, (ii) the Company is insured against losses arising
from the advances, or (iii) the disinterested non-party directors or independent
legal counsel determine there is a reason to believe the Director or officer
ultimately will be found to be entitled to indemnification. Officers, employees
and agents may be indemnified to the same extent as Directors and to such
further extent as is consistent with law.
If these provisions of Maryland law are amended, the Directors and officers
will be entitled to limited liability and to indemnification to the fullest
extent of Maryland law as amended. No amendment or repeal of the provisions of
the Charter relating to limited liability and indemnification will apply to any
event, omission or proceeding which precedes the amendment or repeal.
Under the Trust Agreement, a Trustee of the Fund is entitled to
indemnification against all liability and expenses reasonably incurred by the
person in connection with the defense or disposition of any threatened or actual
proceeding by reason of the person's being or having been a Trustee, unless such
Trustee shall have been adjudicated to have acted with bad faith, willful
misfeasance, gross negligence or in reckless disregard of his or her duties.
Representatives and employees of the Fund may be indemnified to the same extent
as the Trustees.
Under the 1940 Act, a director or trustee may not be protected against
liability to a fund and its security holders to which the person would otherwise
be subject as a result of the person's willful misfeasance, bad faith or gross
negligence in the performance of his or her duties, or by reason of reckless
disregard of his or her obligations and duties. The staff of the Commission
interprets the 1940 Act to require additional limits on indemnification of
directors, or trustees, and officers.
RIGHT OF INSPECTION. Under Maryland law, persons who have been shareholders
of record for six months or more and who own at least 5% of the shares of the
Acquiring Series may inspect the books of account and stock ledger of the
Acquiring Series. Fund shareholders have the right to inspect the records,
accounts and books of the Fund for any legitimate business purpose.
* * * The foregoing is only a summary of certain differences between (i)
the Company or Acquiring Series, the Company's Charter, Bylaws and Maryland law,
and (ii) the Fund, the Trust Agreement, Bylaws and Massachusetts law. It is not
a complete list of differences, but only of material differences. Shareholders
desiring copies of the Company's Charter and Bylaws and/or the Fund's Trust
Agreement and Bylaws should write to the Company or the Fund.
RISK FACTORS. The investment risks of the Fund and Acquiring Series are
substantially the same.
REASONS FOR THE EXCHANGE
The Boards of the Company, on behalf of the Acquiring Series, and the Fund
have concluded that the Exchange is in the best interests of their respective
shareholders. To eliminate the duplication of funds within the Premier Family of
Funds, the Boards of the Company, on behalf of the Acquiring Series, and the
Fund have determined that it is advantageous to combine the Fund with the
Acquiring Series. The combination is expected to permit investment personnel
common to both the Fund and the Acquiring Series to concentrate their efforts on
the management of one fund rather than having to divide their attention between
two substantially similar funds. Each Board believes that the Exchange will
permit shareholders to pursue substantially similar investment goals in a larger
fund without diluting shareholders' interests. Larger aggregate net assets
should enable the combined Acquiring Series to obtain the benefits of some
economies of scale, which may result in an even lower overall expense ratio for
the combined Acquiring Series (as compared to the expense ratios of the Fund and
Acquiring Series alone) through the spreading of fixed costs of fund operations
over a larger asset base.
In determining whether to recommend approval of the Exchange, each Board
considered the following factors, among others: (1) the compatibility of the
Fund's and Acquiring Series' investment objective, management policies and
investment restrictions, as well as shareholder services offered by the Fund and
Acquiring Series; (2) the terms and conditions of the Exchange and whether the
Exchange would result in dilution of shareholder interests; (3) expense ratios
and published information regarding the fees and expenses of the Acquiring
Series and the Fund, as well as the expense ratios of similar funds and the
estimated expense ratio of the combined Acquiring Series; (4) the tax
consequences of the Exchange; and (5) the estimated costs incurred by the
Acquiring Series and the Fund as a result of the Exchange.
INFORMATION ABOUT THE EXCHANGE
PLAN OF EXCHANGE. The following summary of the Plan is qualified in its
entirety by reference to the Plan attached hereto as Exhibit A. The Plan
provides that the Acquiring Series will acquire all or substantially all of the
assets of the Fund, attributable to the Fund's Class A, Class B, Class C and
Class R shares, in exchange for Acquiring Series Class A Shares, Acquiring
Series Class B Shares, Acquiring Series Class C Shares and Acquiring Series
Class R Shares, respectively, and assume the Fund's stated liabilities on
December 31, 1996 or such later date as may be agreed upon by the parties (the
"Closing Date"). The number of Acquiring Series Shares to be issued to the Fund
will be determined on the basis of the relative net asset values per share and
aggregate net assets of the corresponding Class of the Acquiring Series and the
Fund, generally computed as of the close of trading on the floor of the New York
Stock Exchange (currently at 4:00 p.m., New York time) (except for options and
futures contracts, if any, which will be valued 15 minutes after the close of
trading) on the Closing Date. Portfolio securities of the Fund and Acquiring
Series will be valued in accordance with the valuation practices of the
Acquiring Series, which are described under the caption "How to Buy Shares" in
the Acquiring Series Prospectus and under the caption "Determination of Net
Asset Value" in its Statement of Additional Information dated May 1, 1996.
Prior to the Closing Date, the Fund will declare a dividend or dividends
which, together with all previous such dividends, will have the effect of
distributing to the Fund's Shareholders all of the Fund's investment company
taxable income, if any, for the taxable year ending on or prior to the Closing
Date (computed without regard to any deduction for dividends paid) and all of
its net capital gain realized in the taxable year ending on or prior to the
Closing Date (after reduction for any capital loss carry forward).
As conveniently as practicable after the Closing Date, the Fund will
liquidate and distribute pro rata to its Class A, Class B, Class C and Class R
Shareholders of record as of the close of business on the Closing Date the
Acquiring Series Class A Shares, Acquiring Series Class B Shares, Acquiring
Series Class C Shares and Acquiring Series Class R Shares, respectively,
received by it in the Exchange. Such liquidation and distribution will be
accomplished by establishing accounts on the share records of the Acquiring
Series in the name of each Fund Shareholder, each account representing the
respective pro rata number of Acquiring Series Shares due to the Shareholder.
After such distribution and the winding up of its affairs, the Fund will be
dissolved. After the Closing Date, any outstanding certificates representing
Fund Shares will represent the Acquiring Series Shares distributed to the record
holders of the Fund. Upon presentation to the transfer agent of the Acquiring
Series, Fund Share certificates will be exchanged for Acquiring Series Share
certificates, at the applicable exchange rate. Certificates for Acquiring Series
Shares will be issued only upon the investor's written request.
The Plan may be amended at any time prior to the Exchange. The Company will
provide Fund Shareholders with information describing any material amendment to
the Plan prior to Shareholder consideration. The Fund's and Acquiring Series'
obligations under the Plan are subject to various conditions, including approval
by the requisite number of Fund Shareholders and the continuing accuracy of
various representations and warranties of the Fund and the Acquiring Series
being confirmed by the respective parties.
The total expenses of the Exchange are expected to be approximately
$42,000. Each of the Fund and Acquiring Series will bear its own expenses,
except for the expenses of preparing, printing and mailing this Prospectus/Proxy
Statement, the proxy cards and other related materials, which will be borne by
each party to the Exchange ratably according to its respective aggregate net
assets on the date of the Exchange.
If the Exchange is not approved by Fund Shareholders, the Fund's Board will
consider other appropriate courses of action deemed to be in the best interests
of the Fund and its Shareholders.
FEDERAL INCOME TAX CONSEQUENCES. The exchange of Fund assets for Acquiring
Series Shares is intended to qualify for Federal income tax purposes as a
tax-free reorganization under Section 368(a)(1) of the Internal Revenue Code of
1986, as amended (the "Code"). As a condition to the closing of the Exchange,
the Acquiring Series and the Fund will receive the opinion of Stroock & Stroock
& Lavan, counsel to the Acquiring Series and the Fund, to the effect that, on
the basis of the existing provisions of the Code, Treasury regulations issued
thereunder, current administrative regulations and pronouncements and court
decisions, and certain facts, assumptions and representations, for Federal
income tax purposes: (1) the transfer of all or substantially all of the Fund's
assets in exchange for Acquiring Series Shares and the assumption by the
Acquiring Series of the Fund's liabilities will constitute a "reorganization"
within the meaning of Section 368(a)(1)(C) of the Code; (2) no gain or loss will
be recognized by the Acquiring Series upon the receipt of the Fund's assets
solely in exchange for Acquiring Series Shares and the assumption by the
Acquiring Series of liabilities of the Fund; (3) no gain or loss will be
recognized by the Fund upon the transfer of its assets to the Acquiring Series
in exchange for Acquiring Series Shares and the assumption by the Acquiring
Series of the Fund's liabilities or upon the distribution (whether actual or
constructive) of Acquiring Series Shares to Shareholders in exchange for their
Fund Shares; (4) no gain or loss will be recognized by each Fund Shareholder
upon the exchange of Fund Shares for Acquiring Series Shares; (5) the aggregate
tax basis for Acquiring Series Shares received by each Fund Shareholder pursuant
to the Exchange will be the same as the aggregate tax basis for Fund Shares held
by such Shareholder immediately prior to the Exchange, and the holding period of
Acquiring Series Shares to be received by each Fund Shareholder will include the
period during which Fund Shares surrendered in exchange therefor were held by
such Shareholder (provided Fund Shares were held as capital assets on the date
of the Exchange); and (6) the tax basis of the Fund's assets acquired by the
Acquiring Series will be the same as the tax basis of such assets to the Fund
immediately prior to the Exchange, and the holding period of the Fund's assets
in the hands of the Acquiring Series will include the period during which those
assets were held by the Fund.
NEITHER THE FUND NOR THE ACQUIRING SERIES HAS SOUGHT A TAX RULING FROM THE
INTERNAL REVENUE SERVICE ("IRS"). THE OPINION OF COUNSEL IS NOT BINDING ON THE
IRS NOR DOES IT PRECLUDE THE IRS FROM ADOPTING A CONTRARY POSITION. Fund
Shareholders should consult their tax advisers regarding the effect, if any, of
the proposed Exchange in light of their individual circumstances. Because the
foregoing discussion relates only to the Federal income tax consequences of the
Exchange, Fund Shareholders also should consult their tax advisers as to state
and local tax consequences, if any, of the Exchange. REQUIRED VOTE AND BOARD'S
RECOMMENDATION
The Fund's Board has approved the Plan and the Exchange and has determined
that (i) participation in the Exchange is in the Fund's best interests and (ii)
the interests of Fund Shareholders will not be diluted as a result of the
Exchange. Pursuant to the Fund's charter documents, an affirmative vote of a
majority of the Fund's outstanding shares is required to approve the Plan and
the Exchange.
THE BOARD, INCLUDING THE "NON-INTERESTED" BOARD MEMBERS, RECOMMENDS THAT
FUND SHAREHOLDERS VOTE "FOR" APPROVAL OF THE PLAN AND THE EXCHANGE.
ADDITIONAL INFORMATION ABOUT THE ACQUIRING SERIES AND FUND
Information about the Acquiring Series is incorporated by reference into
this Prospectus/Proxy Statement from the Acquiring Series Prospectus forming a
part of the Company's Registration Statement on Form N-1A (File No. 2-30806).
Information about the Fund is incorporated by reference into this
Prospectus/Proxy Statement from the Fund Prospectus forming a part of the Fund's
Registration Statement on Form N-1A (File No. 33-11677).
The Fund and the Acquiring Series are subject to the requirements of the
1940 Act, and file reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information filed by the Fund or
Acquiring Series may be inspected and copied at the Public Reference Facilities
of the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549
and at the Northeast regional office of the Commission at 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates.
VOTING INFORMATION
In addition to the use of the mails, proxies may be solicited personally,
by telephone or by telegraph, and the Fund may pay persons holding its Fund
Shares in their names or those of their nominees for their expenses in sending
soliciting materials to their principals.
If a proxy is properly executed and returned accompanied by instructions to
withhold authority to vote, represents a broker "non-vote" (that is, a proxy
from a broker or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote Fund
Shares on a particular matter with respect to which the broker or nominee does
not have discretionary power) or is marked with an abstention (collectively,
"abstentions"), the Fund Shares represented thereby will be considered to be
present at the Meeting for purposes of determining the existence of a quorum for
the transaction of business. Abstentions will not constitute a vote "for" or
"against" a matter and will be disregarded in determining the "votes cast" on an
issue. For this reason, abstentions will have the effect of a "no" vote for the
purpose of obtaining requisite approval for the Proposal.
In the event that a quorum is not present at the Meeting, or if a quorum is
present but sufficient votes to approve the Proposal are not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. In determining whether to adjourn the
Meeting, the following factors may be considered: the nature of the Proposal,
the percentage of votes actually cast, the percentage of negative votes actually
cast, the nature of any further solicitation and the information to be provided
to Shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those shares
affected by the adjournment that are represented at the Meeting in person or by
proxy. If a quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote "FOR" the Proposal in favor of such
adjournment, and will vote those proxies required to be voted "AGAINST" the
Proposal against any adjournment. A quorum is constituted by the presence in
person or by proxy of the holders of more than 30% of the outstanding Fund
Shares entitled to vote at the Meeting.
The votes of the Acquiring Series shareholders are not being solicited
since their approval or consent is not necessary for the Exchange.
As of September 4, 1996, the following were known by the Fund to own of
record and beneficially 5% or more of the outstanding voting securities of the
Fund's indicated Class: Class B: BHC Securities Inc., FAO 49800231, Attn: Mutual
Funds Dept., One Commerce Square, 2005 Market Street, Suite 1200, Philadelphia,
PA 19103--8.32%; BHC Securities Inc., FAO 25092545, Attn: Mutual Funds Dept.,
One Commerce Square, 2005 Market Street, Suite 1200, Philadelphia, PA
19103--8.11%; BHC Securities Inc., FAO 25449395, Attn: Mutual Funds Dept., One
Commerce Square, 2005 Market Street, Suite 1200, Philadelphia, PA 19103-- 6.23%;
BHC Securities Inc., FAO 25041117, Attn: Mutual Funds Dept., One Commerce
Square, 2005 Market Street, Suite 1200, Philadelphia, PA 19103--5.30%; Class C:
Michele Platt & Harold Platt & Sherrill Platt TTEES, Michelle Platt Rev. Liv.
Trust, U/A DTD 8/28/92, 25440 Karen Street, Oak Park, MI 48237--49.36%;
PaineWebber For The Benefit of Dr. Joseph Mihindukulasuriya, M.D., 52 Park
Street, Glens Falls, NY 12801--48.67%. A Shareholder who beneficially owns,
directly or indirectly, more than 25% of a Fund's voting securities may be
deemed a "control person" (as defined in the 1940 Act) of the Fund.
As of September 4, 1996, the following were known by the Company to own of
record and beneficially 5% or more of the outstanding voting securities of the
Acquiring Series' indicated Class: Class B: Jacob E. Staab TTEE for the Jacob E.
Stabb Rev. Liv. Trust, U/A/D 11/23/92, 814 W. Northcrest Avenue, Peoria, IL
61614--82.43%; Dreyfus Trust Co. Inc., FBO Bhaskerao D. Patel, Under IRA Plan, 2
Lordina Drive, Edison, NJ 08817--9.72%; Premier Mutual Fund Services, Inc.,
025-010A, Attn: Paul Prescott, 1 Exchange Place, Boston, MA 02109--7.86%; Class
C: Premier Mutual Fund Services, Inc., 025-010A, Attn: Paul Prescott, 1 Exchange
Place, Boston, MA 02109--67.39%; Class R: Premier Mutual Fund Services, Inc.,
025-010A, Attn: Paul Prescott, 1 Exchange Place, Boston, MA 02109--91.29%;
Shorewood Builders Ltd. TTEE, FBO Susan L. Origer, Under 401(k) Plan, 1679 W.
Dublin Court, Paltine, IL 60067--8.71%.
As of September 4, 1996, Board members and officers of the Acquiring Series
as a group, owned less than 1% of the Acquiring Series' outstanding shares. As
of September 4, 1996, Board members and officers of the Fund, as a group, owned
less than 1% of the Fund's outstanding shares.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements of the Fund for the fiscal year ended
December 31, 1995, which are included in the Fund's Statement of Additional
Information, and the audited financial statements of the Acquiring Series for
the fiscal year ended September 30, 1995, which are included in the Company's
Statement of Additional Information, have each been audited by Ernst & Young
LLP, independent auditors, whose respective reports thereon are included
therein. The unaudited financial statements of the Acquiring Series for the six
months ended March 31, 1996, are included in the Company's Statement of
Additional Information. The financial statements of the Acquiring Series audited
by Ernst & Young LLP have been incorporated herein by reference in reliance upon
their reports given on their authority as experts in accounting and auditing.
OTHER MATTERS
The Fund's Board members are not aware of any other matters
which may come before the Meeting. However, should any such matters properly
come before the Meeting, it is the intention of the persons named in the
accompanying form of proxy to vote the proxy in accordance with their judgment
on such matters.
NOTICE TO BANKS, BROKER/DEALERS AND VOTING TRUSTEES
AND THEIR NOMINEES
Please advise the Fund, in care of Dreyfus Transfer, Inc.,
Attention: Premier Strategic Growth Fund, P.O. Box 9671, Providence, Rhode
Island 02940-9671, whether other persons are the beneficial owners of Fund
Shares for which proxies are being solicited from you, and, if so, the number of
copies of the Prospectus/Proxy Statement and other soliciting material you wish
to receive in order to supply copies to the beneficial owners of Fund Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND IN PERSON ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated ___________, 1996 (the
"Agreement"), between PREMIER EQUITY FUNDS INC., a Maryland corporation (the
"Company"), on behalf of its PREMIER AGGRESSIVE GROWTH FUND (the "Acquiring
Series") series, and PREMIER STRATEGIC GROWTH FUND, a Massachusetts business
trust (the "Fund").
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all or substantially all of
the assets of the Fund, attributable to the Fund's Class A, Class B, Class C and
Class R shares, in exchange solely for Class A shares ("Acquiring Series Class A
Shares"), Class B shares ("Acquiring Series Class B Shares"), Class C shares
("Acquiring Series Class C Shares") and Class R shares ("Acquiring Series Class
R Shares" and, together with Acquiring Series Class A Shares, Acquiring Series
Class B Shares and Acquiring Series Class C Shares, the "Acquiring Series
Shares"), respectively, of common stock, par value $1.00 per share, of the
Acquiring Series and the assumption by the Acquiring Series of certain
liabilities of the Fund and the distribution, after the Closing Date hereinafter
referred to, of the Acquiring Series Shares to the shareholders of the Fund in
liquidation of the Fund as provided herein, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Series is a registered, diversified, open-end
management investment company and the Fund is a registered, non-diversified,
open-end management investment company, and the Fund owns securities which are
assets of the character in which the Acquiring Series is permitted to invest;
WHEREAS, both the Fund and the Acquiring Series are authorized to issue
their shares of beneficial interest and common stock, respectively;
WHEREAS, the Board of the Fund has determined that the Reorganization is in
the best interests of the Fund's shareholders and that the interests of the
Fund's existing shareholders would not be diluted as a result of this
transaction; and
WHEREAS, the Board of the Company has determined that the
Reorganization is in the best interests of the Acquiring Series' shareholders
and that the interests of the Acquiring Series' existing shareholders would not
be diluted as a result of this transaction:
NOW THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE FUND IN EXCHANGE FOR
ACQUIRING SERIES SHARES AND ASSUMPTION OF FUND
LIABILITIES AND LIQUIDATION OF THE FUND.
1.1. Subject to the terms and conditions contained herein, the Fund agrees
to assign, transfer and convey to the Acquiring Series all of the assets of the
Fund, including all securities and cash (subject to liabilities), attributable
to the Fund's Class A, Class B, Class C and Class R shares, and the Acquiring
Series agrees in exchange therefor (i) to deliver to the Fund the number of
Acquiring Series Shares, including fractional Acquiring Series Shares,
determined as set forth in paragraph 2.3; and (ii) to assume certain liabilities
of the Fund, as set forth in paragraph 1.2. Such transactions shall take place
at the closing (the "Closing") on the closing date (the "Closing Date") provided
for in paragraph 3.1. In lieu of delivering certificates for the Acquiring
Series Shares, the Acquiring Series shall credit the Acquiring Series Shares to
the Fund's account on the books of the Acquiring Series and shall deliver a
confirmation thereof to the Fund.
1.2. The Fund will endeavor to discharge all of its known liabilities and
obligations prior to the Closing Date. The Acquiring Series shall assume all
liabilities, expenses, costs, charges and reserves reflected on an unaudited
statement of assets and liabilities of the Fund prepared by The Dreyfus
Corporation, as of the Valuation Date (as defined in paragraph 2.1), in
accordance with generally accepted accounting principles consistently applied
from the prior audited period. The Acquiring Series shall assume only those
liabilities of the Fund reflected in that unaudited statement of assets and
liabilities and shall not assume any other liabilities, whether absolute or
contingent.
1.3. Delivery of the assets of the Fund to be transferred
shall be made on the Closing Date and shall be delivered to Mellon Bank, N.A.,
One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, the Company's custodian
(the "Custodian"), for the account of the Acquiring Series, with all securities
not in bearer or book-entry form duly endorsed, or accompanied by duly executed
separate assignments or stock powers, in proper form for transfer, with
signatures guaranteed, and with all necessary stock transfer stamps, sufficient
to transfer good and marketable title thereto (including all accrued interest
and dividends and rights pertaining thereto) to the Custodian for the account of
the Acquiring Series free and clear of all liens, encumbrances, rights,
restrictions and claims. All cash delivered shall be in the form of immediately
available funds payable to the order of the Custodian for the account of the
Acquiring Series.
1.4. The Fund will pay or cause to be paid to the Acquiring Series any
distributions received on or after the Closing Date with respect to assets
transferred to the Acquiring Series hereunder. The Fund will transfer to the
Acquiring Series any distributions, rights or other assets received by the Fund
after the Closing Date as distributions on or with respect to the securities
transferred. Such assets shall be deemed included in assets transferred to the
Acquiring Series on the Closing Date and shall not be separately valued.
1.5. As soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the Fund will liquidate and distribute pro rata to its
Class A, Class B, Class C and Class R shareholders of record, determined as of
the close of business on the Closing Date (the "Shareholders"), Acquiring Series
Class A Shares, Acquiring Series Class B Shares, Acquiring Series Class C Shares
and Acquiring Series Class R Shares, respectively, received by the Fund pursuant
to paragraph 1.1. Such liquidation and distribution will be accomplished by the
transfer of the applicable Acquiring Series Shares then credited to the account
of the Fund on the books of the Acquiring Series to open accounts on the share
records of the Acquiring Series in the names of the Fund Shareholders and
representing the respective pro rata number of the applicable Acquiring Series
Shares due such shareholders. All issued and outstanding shares of the Fund
simultaneously will be canceled on the books of the Fund.
1.6. Ownership of Acquiring Series Shares will be shown on the books of the
Acquiring Series' transfer agent. Shares of the Acquiring Series will be issued
in the manner described in the Acquiring Series' current prospectus and
statement of additional information.
1.7. Any transfer taxes payable upon issuance of the Acquiring Series
Shares in a name other than the registered holder of the Acquiring Series Shares
on the books of the Fund as of that time shall, as a condition of such issuance
and transfer, be paid by the person to whom such Acquiring Series Shares are to
be issued and transferred.
1.8. Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the Closing Date and such later
date on which the Fund's existence is terminated.
2. VALUATION.
2.1. The value of the Fund's assets to be acquired by the Acquiring Series
hereunder shall be the value of such assets computed as of the close of trading
on the floor of the New York Stock Exchange (currently, 4:00 p.m., New York
time), except that options and futures contracts will be valued 15 minutes after
the close of trading on the floor of the New York Stock Exchange, on the Closing
Date (such time and date being hereinafter called the "Valuation Date"), using
the valuation procedures set forth in the Company's Articles of Amendment and
Restatement and the Acquiring Series' then-current prospectus or statement of
additional information.
2.2. The net asset value of an Acquiring Series Share shall be the net
asset value per share computed as of the Valuation Date, using the valuation
procedures set forth in the Company's Articles of Amendment and Restatement and
the Acquiring Series' then-current prospectus or statement of additional
information.
2.3. The number of Acquiring Series Class A Shares, Acquiring Series Class
B Shares, Acquiring Series Class C Shares and Acquiring Series Class R Shares to
be issued (including fractional shares, if any) in exchange for the Fund's net
assets shall be determined by dividing the value of the net assets of the
applicable Class of the Fund determined using the same valuation procedures
referred to in paragraph 2.1 by the net asset value of one Acquiring Series
Class A Share, Acquiring Series Class B Share, Acquiring Series Class C Share or
Acquiring Series Class R Share, as the case may be, determined in accordance
with paragraph 2.2.
2.4. All computations of value shall be made in accordance with the regular
practices of the Acquiring Series.
3. CLOSING AND CLOSING DATE.
3.1. The Closing Date shall be December 31, 1996 or such later date as the
parties may mutually agree. All acts taking place at the Closing shall be deemed
to take place simultaneously as of the close of business on the Closing Date
unless otherwise provided. The Closing shall be held at 4:00 p.m., New York
time, at the offices of The Dreyfus Corporation, 200 Park Avenue, New York, New
York, or such other time and/or place as the parties may mutually agree.
3.2. The Custodian shall deliver at the Closing a certificate of an
authorized officer stating that the Fund's portfolio securities, cash and any
other assets have been delivered in proper form to the Acquiring Series within
two business days prior to or on the Closing Date.
3.3. If on the Valuation Date (a) the New York Stock Exchange or another
primary trading market for portfolio securities of the Acquiring Series or the
Fund shall be closed to trading or trading thereon shall be restricted; or (b)
trading or the reporting of trading on said Exchange or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Series or the Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
3.4. The transfer agent for the Fund shall deliver at the Closing a
certificate of an authorized officer stating that its records contain the names
and addresses of the Fund Class A, Class B, Class C and Class R shareholders and
the number and percentage ownership of outstanding Fund Class A, Class B, Class
C and Class R shares, respectively, owned by each such shareholder immediately
prior to the Closing. The Acquiring Series shall issue and deliver a
confirmation evidencing the Acquiring Series Shares to be credited on the
Closing Date to the Secretary of the Fund, or provide evidence satisfactory to
the Fund that such Acquiring Series Shares have been credited to the Fund's
account on the books of the Acquiring Series. At the Closing, each party shall
deliver to the other such bills of sale, checks, assignments, receipts or other
documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1. The Fund represents and warrants to the Company as follows:
(a) The Fund is an unincorporated business trust
duly organized and validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and has power to own all of its properties and
assets and to carry out this Agreement.
(b) The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end,
non-diversified, management investment company, and such registration has not
been revoked or rescinded and is in full force and effect.
(c) The Fund is not, and the execution, delivery
and performance of this Agreement will not result, in material violation of the
Fund's Amended and Restated Agreement and Declaration of Trust dated October 20,
1995, as the same may have been amended (the "Trust Agreement"), or its Bylaws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which the Fund is a party or by which it is bound.
(d) The Fund has no material contracts or other
commitments outstanding (other than this Agreement) which will be terminated
with liability to it on or prior to the Closing Date.
(e) No litigation or administrative proceeding
or investigation of or before any court or governmental body is currently
pending or to its knowledge threatened against the Fund or any of its properties
or assets which, if adversely determined, would materially and adversely affect
its financial condition or the conduct of its business. The Fund knows of no
facts which might form the basis for the institution of such proceedings, and is
not a party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions herein contemplated.
(f) The Statement of Assets and Liabilities of
the Fund for the nine fiscal years ended December 31, 1995 have been audited by
Ernst & Young LLP, independent auditors, and are in accordance with generally
accepted accounting principles, consistently applied, and such statements
(copies of which have been furnished to the Acquiring Series) fairly reflect the
financial condition of the Fund as of such date, and there are no known
contingent liabilities of the Fund as of such date not disclosed therein.
(g) Since December 31, 1995, there has not been
any material adverse change in the Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course of
business, or any incurrence by the Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as disclosed on the
Statement of Assets and Liabilities referred to in paragraph 1.2 hereof.
(h) At the Closing Date, all Federal and other
tax returns and reports of the Fund required by law to have been filed by such
dates shall have been filed, and all Federal and other taxes shall have been
paid so far as due, or provision shall have been made for the payment thereof,
and to the best of the Fund's knowledge no such return is currently under audit
and no assessment has been asserted with respect to such returns.
(i) For each fiscal year of its operation, the
Fund has met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(j) All issued and outstanding shares of the
Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable by the Fund. All of the issued and
outstanding shares of the Fund will, at the time of Closing, be held by the
persons and in the amounts set forth in the records of the transfer agent as
provided in paragraph 3.4. The Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Fund shares, nor is
there outstanding any security convertible into any Fund shares.
(k) On the Closing Date, the Fund will have full
right, power and authority to sell, assign, transfer and deliver the assets to
be transferred by it hereunder.
(l) The execution, delivery and performance of
this Agreement will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Fund's Board and, subject to the approval of
the Fund Shareholders, this Agreement will constitute the valid and legally
binding obligation of the Fund, enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto, and to general
principles of equity and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(m) The proxy statement of the Fund (the "Proxy
Statement"), included in the Registration Statement referred to in paragraph 5.5
(other than information therein that has been furnished by the Acquiring Series)
will, on the effective date of the Registration Statement and on the Closing
Date, not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were made,
not materially misleading.
4.2. The Acquiring Series represents and warrants to the Series as follows:
(a) The Acquiring Series is a series of the
Company, a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland, and has power to carry on its business
as it is now being conducted and to carry out this Agreement.
(b) The Acquiring Series is registered under the
1940 Act as an open-end, diversified, management investment company, and such
registration has not been revoked or rescinded and is in full force and effect.
(c) The current prospectus and statement of
additional information of the Acquiring Series conform in all material respects
to the applicable requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act and the rules and regulations of the Securities
and Exchange Commission thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading.
(d) The Acquiring Series is not, and the
execution, delivery and performance of this Agreement will not result, in
material violation of the Company's Articles of Amendment and Restatement or
Bylaws or of any agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquiring Series is a party or by which it is bound.
(e) No litigation or administrative proceeding
or investigation of or before any court or governmental body is currently
pending or to its knowledge threatened against the Acquiring Series or any of
its properties or assets which, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its business. The
Acquiring Series knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability to consummate
the transactions contemplated herein.
(f) The Statement of Assets and Liabilities of
the Acquiring Series for the ten fiscal years ended September 30, 1995, have
been audited by Ernst & Young LLP, independent auditors, and are in accordance
with generally accepted accounting principles, consistently applied, and such
statements (copies of which have been furnished to the Fund) fairly reflect the
financial condition of the Acquiring Series as of such dates.
(g) Since September 30, 1995 there has not been
any material adverse change in the Acquiring Series' financial condition,
assets, liabilities or business other than changes occurring in the ordinary
course of business, or any incurrence by the Acquiring Series of indebtedness
maturing more than one year from the date such indebtedness was incurred, except
as disclosed on the Statement of Assets and Liabilities referred to in paragraph
4.2(f) hereof.
(h) At the Closing Date, all Federal and other
tax returns and reports of the Acquiring Series required by law then to be filed
shall have been filed, and all Federal and other taxes shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof.
(i) For each fiscal year of its operation, the
Acquiring Series has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.
(j) All issued and outstanding shares of the
Acquiring Series are, and at the Closing Date will be, duly and validly issued
and outstanding, fully paid and non-assessable. The Acquiring Series does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquiring Series Shares, nor is there outstanding any
security convertible into any Acquiring Series Shares.
(k) The execution, delivery and performance of
this Agreement will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Company's Directors, and this Agreement will
constitute the valid and legally binding obligation of the Acquiring Series
enforceable in accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar
laws relating to or affecting creditors' rights generally and court decisions
with respect thereto, and to general principles of equity and the discretion of
the court (regardless of whether the enforceability is considered in a
proceeding in equity or at law).
(l) The Proxy Statement included in the
Registration Statement (only insofar as it relates to the Acquiring Series and
is based on information furnished by the Acquiring Series) will, on the
effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not materially
misleading.
5. COVENANTS OF THE ACQUIRING SERIES AND THE FUND.
5.1. The Acquiring Series and the Fund each will operate its business in
the ordinary course between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include payment of
customary dividends and distributions.
5.2. The Fund will call a meeting of Fund Shareholders to consider and act
upon this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated herein.
5.3. Subject to the provisions of this Agreement, the Acquiring Series and
the Fund will each take, or cause to be taken, all action, and do or cause to be
done, all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement.
5.4. As promptly as practicable, but in any case within sixty days after
the Closing Date, the Fund shall furnish the Acquiring Series, in such form as
is reasonably satisfactory to the Acquiring Series, a statement of the earnings
and profits of the Fund for Federal income tax purposes which will be carried
over to the Acquiring Series as a result of Section 381 of the Code and which
will be certified by the Fund's President or its Vice President and Treasurer.
5.5. The Fund will provide the Acquiring Series with information reasonably
necessary for the preparation of a prospectus (the "Prospectus") which will
include the Proxy Statement, referred to in paragraph 4.1(m), all to be included
in a Registration Statement on Form N-14 of the Company (the "Registration
Statement"), in compliance with the 1933 Act, the Securities Exchange Act of
1934, as amended, and the 1940 Act in connection with the meeting of the Fund
Shareholders to consider approval of this Agreement and the transactions
contemplated herein.
5.6. The Acquiring Series agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and such
of the state Blue Sky or securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING SERIES.
The obligations of the Acquiring Series to complete the transactions
provided for herein shall be subject, at its election, to the performance by the
Fund of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
6.1. All representations and warranties of the Fund contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date.
6.2. The Fund shall have delivered to the Acquiring Series a statement of
the Fund's assets and liabilities, together with a list of the Fund's portfolio
securities showing the tax basis of such securities by lot and the holding
periods of such securities, as of the Closing Date, certified by the Treasurer
of the Fund.
6.3. The Fund shall have delivered to the Acquiring Series on the Closing
Date a certificate executed in its name by the Fund's President or Vice
President and its Treasurer, in form and substance satisfactory to the Acquiring
Series, to the effect that the representations and warranties of the Fund made
in this Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement, and as
to such other matters as the Company shall reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUND.
The obligations of the Fund to consummate the transactions provided for
herein shall be subject, at its election, to the performance by the Acquiring
Series of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
7.1. All representations and warranties of the Acquiring Series contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date.
7.2. The Acquiring Series shall have delivered to the Fund on the Closing
Date a certificate executed in its name by the Company's President or Vice
President and its Treasurer, in form and substance reasonably satisfactory to
the Fund, to the effect that the representations and warranties of the Acquiring
Series made in this Agreement are true and correct at and as of the Closing
Date, except as they may be affected by the transactions contemplated by this
Agreement, and as to such other matters as the Fund shall reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING SERIES AND
THE FUND.
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Fund or the Acquiring Series, the other party
to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement.
8.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Fund in accordance with the provisions of the Fund's Trust Agreement.
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including those of
the Securities and Exchange Commission and of state Blue Sky and securities
authorities) deemed necessary by the Acquiring Series or the Fund to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain any such consent, order
or permit would not involve a risk of a material adverse effect on the assets or
properties of the Acquiring Series or the Fund, provided that either party
hereto may for itself waive any of such conditions.
8.4. The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act.
8.5. The Fund shall have declared a dividend or dividends which, together
with all previous such dividends, shall have the effect of distributing to Fund
Shareholders all of the Fund's investment company taxable income for all taxable
years ending on or prior to the Closing Date (computed without regard to any
deduction for dividends paid) and all of its net capital gain realized in all
taxable years ending on or prior to the Closing Date (after reduction for any
capital loss carry forward).
8.6. The parties shall have received an opinion of Stroock & Stroock &
Lavan substantially to the effect that for Federal income tax purposes:
(a) The transfer of all or substantially all of
the Fund's assets in exchange for the Acquiring Series Shares and the assumption
by the Acquiring Series of certain identified liabilities of the Fund will
constitute a "reorganization" within the meaning of Section 368(a)(1)(C) of the
Code; (b) No gain or loss will be recognized by the Acquiring Series upon the
receipt of the assets of the Fund solely in exchange for the Acquiring Series
Shares and the assumption by the Acquiring Series of certain identified
liabilities of the Fund; (c) No gain or loss will be recognized by the Fund upon
the transfer of the Fund's assets to the Acquiring Series in exchange for the
Acquiring Series Shares and the assumption by the Acquiring Series of certain
identified liabilities of the Fund or upon the distribution (whether actual or
constructive) of the Acquiring Series Shares to Fund Shareholders in exchange
for their shares of the Fund; (d) No gain or loss will be recognized by the Fund
Shareholders upon the exchange of their Fund shares for the Acquiring Series
Shares; (e) The aggregate tax basis for the Acquiring Series Shares received by
each of the Fund Shareholders pursuant to the Reorganization will be the same as
the aggregate tax basis of the Fund shares held by such shareholder immediately
prior to the Reorganization, and the holding period of the Acquiring Shares to
be received by each Fund Shareholder will include the period during which the
Fund shares exchanged therefor were held by such shareholder (provided the Fund
shares were held as capital assets on the date of the Reorganization); and (f)
The tax basis of the Fund assets acquired by the Acquiring Series will be the
same as the tax basis of such assets to the Fund immediately prior to the
Reorganization, and the holding period of the assets of the Fund in the hands of
the Acquiring Series will include the period during which those assets were held
by the Fund.
9. TERMINATION OF AGREEMENT.
9.1. This Agreement and the transaction contemplated hereby may be
terminated and abandoned by resolution of the Board of the Company or of the
Fund, as the case may be, at any time prior to the Closing Date (and
notwithstanding any vote of the Fund Shareholders) if circumstances should
develop that, in the opinion of either of the parties' Board, make proceeding
with the Agreement inadvisable.
9.2. If this Agreement is terminated and the transaction contemplated
hereby is abandoned pursuant to the provisions of this Section 9, this Agreement
shall become void and have no effect, without any liability on the part of any
party hereto or the directors, trustees, officers or shareholders of the Fund or
of the Company, as the case may be, in respect of this Agreement, except that
the parties shall bear the aggregate expenses of the transaction contemplated
hereby in proportion to their respective net assets as of the date this
Agreement is terminated or the exchange contemplated hereby is abandoned.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing conditions may
be waived by the Board of the Fund or of the Company if, in the judgment of
either, such waiver will not have a material adverse effect on the benefits
intended under this Agreement to the shareholders of the Fund or of the
Acquiring Series, as the case may be.
11. MISCELLANEOUS.
11.1. None of the representations and warranties included or provided for
herein shall survive consummation of the transactions contemplated hereby.
11.2. This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof, and merges
and supersedes all prior discussions, agreements and understandings of every
kind and nature between them relating to the subject matter hereof. Neither
party shall be bound by any condition, definition, warranty or representation,
other than as set forth or provided in this Agreement or as may be, on or
subsequent to the date hereof, set forth in a writing signed by the party to be
bound thereby.
11.3. This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York, without giving effect to principles of
conflict of laws; provided, however, that the due authorization, execution and
delivery of this Agreement by the Acquiring Series and the Fund shall be
governed and construed in accordance with the internal laws of the State of
Maryland and the Commonwealth of Massachusetts, respectively, without giving
effect to principles of conflict of laws.
11.4. This Agreement may be executed in counterparts, each of which, when
executed and delivered, shall be deemed to be an original.
11.5. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
11.6. The names "Premier Strategic Growth Fund" and "Trustees of Premier
Strategic Growth Fund" refer respectively to the Fund and its Trustees, as
trustees but not individually or personally, acting from time to time under the
Trust Agreement, a copy of which is on file at the office of the Secretary of
the Commonwealth of Massachusetts and at the principal office of the Fund. The
obligations of the Fund entered into in the name or on behalf thereof by any of
the Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders or
representatives of the Fund personally, but bind only the Fund's property, and
all persons dealing with any class of shares of the Fund must look solely to the
Fund's property belonging to such class for the enforcement of any claims
against the Fund.
11.7. Any references in this Agreement to actions taken, deliveries by or
to, representations and warranties made by or to, the Acquiring Series shall be
deemed references to actions taken, deliveries by or to, or representations and
warranties made by or to, the Company, on behalf of the Acquiring Series.
IN WITNESS WHEREOF, the Acquiring Series and the Fund have caused this
Agreement and Plan of Reorganization to be executed and attested on its behalf
by its duly authorized representatives as of the date first above written.
PREMIER EQUITY FUNDS, INC.
on behalf of PREMIER AGGRESSIVE
GROWTH FUND
By:
Marie E. Connolly,
President
ATTEST:
John E. Pelletier,
Secretary
PREMIER STRATEGIC GROWTH FUND
By:
Marie E. Connolly,
President
ATTEST:
John E. Pelletier,
Secretary
<PAGE>
PRELIMINARY COPY
PREMIER STRATEGIC GROWTH FUND
The undersigned shareholder of Premier Strategic Growth Fund (the "Fund")
hereby appoints Michael A. Rosenberg and Lawrence Stoller, and each of them, the
attorneys and proxies of the undersigned, with full power of substitution, to
vote, as indicated herein, all of the shares of beneficial interest of the Fund
standing in the name of the undersigned at the close of business on October 1,
1996, at a Special Meeting of Shareholders to be held at the offices of The
Dreyfus Corporation, 200 Park Avenue, 7th Floor, New York, New York 10166, at
10:00 a.m. on Monday, December 16, 1996, and at any and all adjournments
thereof, with all of the powers the undersigned would possess if then and there
personally present and especially (but without limiting the general
authorization and power hereby given) to vote as indicated on the proposal, as
more fully described in the Prospectus/Proxy Statement for the meeting.
Please mark boxes in blue or black ink.
1. To approve an Agreement and Plan of Reorganization between
the Fund and Premier Equity Funds, Inc., on behalf of its Premier Aggressive
Growth Fund series, providing for the transfer of substantially all of the
assets of the Fund, subject to its liabilities, attributable to its Class A,
Class B, Class C and Class R shares.
FOR AGAINST ABSTAIN
2. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting, or any
adjournment(s) thereof.
THIS PROXY IS SOLICITED BY THE FUND'S BOARD OF TRUSTEES AND WILL BE VOTED FOR
THE ABOVE PROPOSAL UNLESS OTHERWISE INDICATED.
Signature(s) should be exactly as name or
names appearing on this proxy. If shares are
held jointly, each holder should sign. If
signing is by attorney, executor,
administrator, trustee or guardian, please
give full title.
Dated: ______ __, 1996
Signature(s)
Signature(s)
Sign, Date and Return the Proxy
Card Promptly Using the
Enclosed Envelope
<PAGE>
PROSPECTUS JANUARY 8, 1996
PREMIER CAPITAL GROWTH FUND
PREMIER CAPITAL 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 JANUARY 8, 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. FOR A FREE COPY, 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
Page
Fee Table......................................... 3
Condensed Financial Information................... 3
Alternative Purchase Methods...................... 5
Description of the Fund........................... 6
Management of the Fund............................ 7
How to Buy Shares................................. 8
Shareholder Services.............................. 13
How to Redeem Shares.............................. 17
Distribution Plan and Shareholder Services Plan... 22
Dividends, Distributions and Taxes................ 22
Performance Information........................... 24
General Information............................... 24
Appendix.......................................... 26
<TABLE>
<CAPTION>
FEE TABLE
CLASS A CLASS B CLASS C CLASS R
----- ----- ----- -----
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a
.......................... percentage of offering price) 4.50% 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% .16%
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:
1 Year............................................... $ 56 $ 59/$19 $29/$19 $ 9
3 Years.............................................. $ 79 $ 88/$58 $ 58 $ 27
5 Years.............................................. $103 $121/$101 $ 101 $ 48
10 Years............................................. $174 $ 180 $ 218 $106
</TABLE>
*For shareholders beneficially owning shares on or before December 31, 1995, the
Maximum Sales Load Imposed on Purchases (as a percentage of offering price) is
3.00%. **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 figure assumes conversion of Class B shares to Class A shares at the
end of the sixth year following the date of purchase.
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%.
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 waive rs 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 this Prospectus.
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.
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.
<TABLE>
<CAPTION>
Year EndedSeptember 30,
----------------------------------------------------------------------------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
--- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
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:
Ratios of operating expenses
to average net assets......... .91% .89% .96% 1.04% 1.05% .97% .97% 1.02% 1.03% 1.03%
Ratios 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.
DEBT OUTSTANDING
Year EndedSeptember 30,
----------------------------------------------------------------------------------------------
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 year (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 4.50% of the public offering price imposed at the time
of purchase. 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 distr ibutions 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 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 corpora tions, 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 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.
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.
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 # Page 6
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.
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 adminis # Page 7
tered 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 from 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 ser ved 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. 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 One Exchange Place, 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, is located at One American Express Plaza,
Providence, Rhode Island 02903, and serves as the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, 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.
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 Acco unt 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 TELETRAN
SFER Privilege described below. Checks should be made payable to "Premier
Capital Growth Fund," or, if for Dreyfus retirement plan accounts, to "The
Dreyfus Trust Company, Custodian." Payments to open new accounts which are
mailed should be sent to Premier Capital Growth Fund, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with 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 invest ment slip should be
enclosed and sent to Premier Capital Growth Fund, P.O. Box 105, Newark, New
Jersey 07101-0105. For Dreyfus retirement plan accounts, both initial and
subsequent investments 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 applicable Class'
DDA number as shown below, for purchase of Fund shares in your name:
DDA # 8900119276 Premier Capital Growth Fund/Class A shares; DDA #
8900276266 Premier Capital Growth Fund/Class B shares; DDA # 8900276274
Premier Capital Growth Fund/Class C shares; or DDA # 8900276282 Premier
Capital Growth Fund/Class R shares.
The wire 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.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
Builder 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 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, 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.................... 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>
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 two years after 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....... 2.75 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
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. 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 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% 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 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 TEL
ETRANSFER 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").
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' 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 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 Equity Funds,
Inc., P.O. Box 9671, Providence, Rhode Island 02940-9671. 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 Capital Growth Fund, P.O. Box 9671, Providence, Rhode Island 02940-9671,
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 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 Equity Funds, Inc.,
P.O. Box 9671, Providence, Rhode Island 02940-9671. 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.
Class B and 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 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 partici pant reaches age 59-1/2 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, 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:
<TABLE>
<CAPTION>
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
---------- --------------
<S> <C>
First............................................................ 4.00
Second........................................................... 4.00
Third............................................................ 3.00
Fourth........................................................... 3.00
Fifth............................................................ 2.00
Sixth............................................................ 1.00
</TABLE>
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 70-1/2 in the case of an IRA or Keogh plan or custodial account
pursuant to Section 403(b) of the Code. 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
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.
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
Capital 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, nationa l 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. 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 TEL
ETRANSFER 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_Class A
Shares_Upon written request, you may reinvest up to the number of Class A shares
you have redeemed, within 30 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. 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 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 59-1/2, 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 70-1/2 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 cer tain 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.
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 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.
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 2% 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
2% 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.
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. 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. 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.
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.
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PROSPECTUS
PREMIER CAPITAL
GROWTH FUND
Managed by
The Dreyfus Corporation
Copy Rights 1996 Dreyfus Service Corporation
- ----------------------------------------------------------------------------
PREMIER STRATEGIC GROWTH FUND PROSPECTUS MAY 1, 1996 LION LOGO Registration Mark
- ----------------------------------------------------------------------------
PREMIER STRATEGIC GROWTH FUND (THE "FUND") IS AN OPEN-END, NON-DIVERSIFIED,
MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL FUND. THE FUND'S INVESTMENT
OBJECTIVE IS TO MAXIMIZE CAPITAL GROWTH. THE FUND INVESTS PRINCIPALLY IN
PUBLICLY-TRADED COMMON STOCKS OF DOMESTIC ISSUERS, AS WELL AS SECURITIES OF A
BROAD RANGE OF FOREIGN COMPANIES AND FOREIGN GOVERNMENTS.
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 MAY 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. FOR A FREE COPY, WRITE TO THE FUND AT 144 GLENN CURTISS
BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-554-4611. 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.
__________________________________________________________________________
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
Page
Fee Table......................................... 3
Condensed Financial Information................... 4
Alternative Purchase Methods...................... 5
Description of the Fund........................... 6
Management of the Fund............................ 8
How to Buy Shares................................. 9
Shareholder Services.............................. 15
How to Redeem Shares.............................. 18
Distribution Plan and Shareholder Services Plan... 23
Dividends, Distributions and Taxes................ 23
Performance Information........................... 25
General Information............................... 26
Appendix.......................................... 27
<TABLE>
<CAPTION>
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C CLASS R
________ ________ ________ _______
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.50% 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............. 1.09% 1.09% 1.09% .84%
Total Fund Operating Expenses 1.84% 2.59% 2.59% 1.59%
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 $ 63 $66/$26** $36/$26** $ 16
3 YEARS $100 $111/$81** $ 81 $ 50
5 YEARS $140 $158/$138** $138 $ 87
10 YEARS $251 $257*** $292 $189
* 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 figure assumes conversion of Class B shares to Class A
shares at the end of the sixth year following the date of purchase.
</TABLE>
______________________________________________________________________________
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%.
______________________________________________________________________________
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 applicable amounts for Class A for the Fund's last fiscal year. For
Class A, the information in the foregoing table reflects the Fund's termination
of a Rule 12b-1 Plan and the adoption of a Shareholder Services Plan with
respect to Class A. 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. 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
are included in the Statement of Additional Information, available upon request.
No financial information is available for Class B, Class C or Class R shares,
which had not been offered as of the date of the financial statements.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a Class A share
of beneficial interest 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>
CLASS A SHARES
-------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
PER SHARE DATA: 1987(1) 1988 1989 1990 1991 1992 1993 1994 1995
------ ------ ------ ----- ----- ------ ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year........ $15.00 $24.46 $25.71 $29.37 $27.27 $36.19 $30.63 $38.22 $39.37
------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net .08 1.16 1.32 2.37 2.07 1.38 2.21 .87(2) 5.37
Net realized and unrealized
gain (loss) on investment 9.38 .09 2.34 (4.47) 6.85 (6.94) 5.38 .28 (7.17)
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS... 9.46 1.25 3.66 (2.10) 8.92 (5.56) 7.59 1.15 (1.80)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year $24.46 $25.71 $29.37 $27.27 $36.19 $30.63 $38.22 $39.37 $37.57
====== ====== ====== ======= ======= ====== ====== ====== ======
TOTAL INVESTMENT
RETURN(3)........ 63.07%(4) 5.11% 14.24% (7.15%) 32.71% (15.36%) 24.78% 3.01% (4.57%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to
average net assets 1.57%(4)(5) 1.39%(5) 1.50%(5) 1.50%(5) 1.50%(5) 1.50%(5) 1.59%(5) 1.46% 1.57%
Ratio of interest expense, loan
commitment fees and dividends
on securities sold short
to average net assets .81%(4) .59% 1.56% .96% .08% .22% .03% .16% .27%
Ratio of net investment income
to average net assets .72%(4) 5.02% 1.41% 1.79% 1.48% .83% .79% 2.17% 1.52%
Decrease reflected in above
expense ratios due to undertaking
by The Dreyfus Corporati -- -- -- -- -- -- .06% -- --
Portfolio Turnover Rate 431.64%(4) 831.14% 370.97% 188.16% 95.49% 209.38% 301.07% 269.41% 298.93%
Net Assets, end of year
(000's omitted) $92,958 $158,158 $109,290 $60,383 $61,063 $44,765 $45,397 $98,894 $52,286
(1) From March 27, 1987 (commencement of operations) to December 31, 1987.
(2) Based on an average of shares outstanding at each month end.
(3) Exclusive of sales charge.
(4) Not annualized.
(5) Net of expenses reimbursed.
</TABLE>
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.
<TABLE>
<CAPTION>
DEBT OUTSTANDING
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------
1987(1) 1988 1989 1990 1991 1992 1993 1994 1995
----- ----- ----- ------ ----- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Amount of debt outstanding
at end of year
(in thousands) _ _ $22,740 _ _ _ _ _ $7,020
Average amount of
debt outstanding
throughout year
(in thousands)(2) $4,907 $5,238 $17,479 $5,119 _ $1,746 _ $556 $2,313
Average number of
shares outstanding
throughout year
(in thousands)(3) 1,809 5,564 4,938 2,856 _ 1,596 _ 1,859 1,949
Average amount of
debt per share
throughout year $2.71 $.94 $3.54 $1.79 _ $1.09 _ $.30 $1.19
(1) From March 27, 1987 (commencement of operations) to December 31, 1987.
(2) Based upon daily outstanding borrowings.
(3) Based upon month-end balances.
</TABLE>
ALTERNATIVE PURCHASE METHODS
The Fund offers you four methods of purchasing Fund 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 4.50% 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 l% 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 l% 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
l% 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 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 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
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 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 may not be appropriate for investors
who invest less than $50,000 in Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to maximize capital growth. 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 principally in publicly-traded common stocks. There are no
limitations on the type, size, operating history or dividend paying record of
companies or industries in which the Fund may invest, the principal criteria for
investment being that the securities provide opportunities for capital growth.
The Fund may invest up to 30% of the value of its assets in the securities of
foreign companies which are not publicly-traded in the United States and the
debt securities of foreign governments. Stock selection is based primarily on
forecasts of future (12 to 18 months) relative earnings growth by company. Top
down sector earnings forecasts supplement company-specific fundamentals in final
portfolio construction. The Fund may take large cyclical positions when
justified by a strong cyclical earnings recovery. Page 6 The Fund may invest in
convertible securities, preferred stocks and debt securities without limitation
when management believes that such securities offer opportunities for capital
growth. The debt securities in which the Fund may invest must be rated at least
Caa by Moody's Investors Service, Inc. ("Moody's") or CCC by Standard & Poor's
Ratings Group, a division of The McGraw-Hill Companies, Inc. ("S&P"), or, if
unrated, deemed to be of comparable quality by The Dreyfus Corporation.
Obligations rated Caa by Moody's and CCC by S&P are considered to have
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal and to be of poor standing. The Fund intends to
invest less than 5% of its net assets in debt securities rated lower than
investment grade by Moody's and S&P. 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. In an effort
to increase returns, the Fund expects to trade actively and that the annual
portfolio turnover rate could exceed 200%. 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, leveraging, lending portfolio securities and short-selling. For a
discussion of the investment techniques and their related risks, 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 portfolio
securities 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. 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. Page 7 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, currency 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 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.
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 that may be purchased by
the Fund, such as those rated Baa or lower by Moody's and BBB or lower by S&P,
may be subject to such 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.
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 in the same industry, the Fund's
portfolio may be more 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 March 29, 1996, The Dreyfus
Corporation managed or administered approximately $82 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 Fund, subject to the authority of the Fund's Board
in accordance with Massachusetts law. The Fund's primary portfolio manager is
Michael Schonberg. He has held that position since August 1995 and has been
employed by Page 8 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 (N.Y.), 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. 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 $233
billion in assets as of December 31, 1995, including approximately $81 billion
in proprietary mutual fund assets. As of December 31, 1995, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $786 billion in assets, including
approximately $60 billion in mutual fund assets. For the fiscal year ended
December 31, 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 Fund's overall expense ratio 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.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at One Exchange Place, 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, 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 Page
9 Corporation, including members of the Fund'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. When purchasing Fund shares, you must
specify which Class is being purchased. Share 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
"Premier Strategic Growth Fund," or, if for Dreyfus retirement plan accounts, to
"The Dreyfus Trust Company, Custodian." Payments to open new accounts which are
mailed should be sent to Premier Strategic Growth Fund, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with 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 and sent to Premier Strategic Growth Fund, P.O. Box 105,
Newark, New Jersey 07101-0105. For Dreyfus retirement plan accounts, both
initial and subsequent investments 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, Page 10 together with the applicable Class' DDA # as shown below, for
purchase of Fund shares in your name: DDA # 8900119373 Premier Strategic Growth
Fund/Class A shares; DDA # 8900276290 Premier Strategic Growth Fund/Class B
shares; DDA # 8900276304 Premier Strategic Growth Fund/Class C shares; or DDA #
8900276312 Premier Strategic Growth Fund/Class R shares. The wire 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 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, the Government Direct Deposit Privilege and the
Payroll Savings Plan 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 your Fund account number PRECEDED BY THE DIGITS "1111." Fund
shares are sold on a continuous basis. Net asset value per share of each Class
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 Fund's Board.
Certain securities may be valued by an independent pricing service approved by
the Fund's Board and are valued at fair value as determined by the pricing
service. For further information regarding the methods employed in valuing Fund
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 Page 11 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"). 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 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, a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
----------------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUEAS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
---------------------------- ---------------- ------------------------------
<S> <C> <C> <C>
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>
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 two years 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 its 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:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
-----------------------------
AS A % OF AS A % OF
OFFERING PRICE NET ASSET VALUE
AMOUNT OF TRANSACTION PER SHARE PER SHARE
---------------------------- ---------------- ------------------
<S> <C> <C>
Less than $100,000.......... 3.00 3.10
$100,000 to less than $250,000 2.75 3.80
$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>
Full-time employees of NASD member firms and full-time employ- ees 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 Fund 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
Corp- oration 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 Fund'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 Page 13 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.
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 price 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
of the Fund, or of any other Eligible Fund or combination thereof, with an
aggregate current market value of $40,000 and subsequently purchase Class A
shares of the Fund or an Eligible Fund having a current value of $20,000, the
sales load applicable to the subsequent purchase would be reduced to 4% 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 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"). 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 on redemption 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. If
you are exchanging Class A shares into a fund Page 15 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 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 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
on redemption 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. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or cancelled
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 Strategic
Growth Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. The Fund may
charge a service fee for 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 Strategic 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. Page 16 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 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. Further, the Fund may
terminate your participation upon 30 days' notice to you.
PAYROLL SAVINGS PLAN -- Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or all
of your paycheck transferred to your existing Dreyfus account electronically
through the Automated Clearing House system at each pay period. To establish a
Payroll Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse side of
the form and return it to Premier Strategic Growth Fund, P.O. Box 6587,
Providence, Rhode Island 02940-6587. You may obtain the necessary authorization
form by calling 1-800-645-6561. You may change the amount of purchase or cancel
the authorization only by written notification to your employer. It is the sole
responsibility of your employer, not the Distributor, The Dreyfus Corporation,
the Fund, the Transfer Agent or any other person, to arrange for transactions
under the Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS -- Dividend Sweep enables you to invest automatically dividends
or dividends and capital gains 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 an investor. 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 Strategic 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 Page 17 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. Partic- ipants 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. Class B or 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 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,
available 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 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. Purchases made
pursuant to a Letter of Intent will be made at the then-current net asset value
plus the applicable sales load in effect at the time such Letter of Intent was
executed.
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. Page 18 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.
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 30 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 of the Fund held by you at the time of
redemption. If the aggregate value of the 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 Page 19 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:
<TABLE>
<CAPTION>
YEAR SINCE PURCHASE CDSC AS A % OF AMOUNT
PAYMENT WAS MADE INVESTED OR REDEMPTION PROCEEDS
------------------------- --------------------------------------------
<S> <C>
First................................. 4.00
Second................................ 4.00
Third................................. 3.00
Fourth................................ 3.00
Fifth................................. 2.00
Sixth................................. 1.00
</TABLE>
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 per share for a
cost of $1,000. Subsequently, the shareholder acquired 5 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. If the Fund'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
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 fraud- ulent
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 Strategic 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. Written redemption requests must specify
the Class of shares being redeemed. 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. Page 21
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 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 the 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 shar
eholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE -- CLASS A -- You may reinvest up to the number of
Class A shares you have redeemed, within 30 days of redemption, at the
then-prevailing net asset value without a sales load, or reinstate your account
for the purpose of exercising the Fund Exchanges service. The Reinvestment
Privilege may be exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
(CLASS A, CLASS B AND CLASS C SHARES 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 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
The Fund ordinarily declares and pays dividends from 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 of the same Class 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 the 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 in the same amount, except that the expenses attributable
solely to a particular Class will be borne exclusively by such Class. Class B
and Class 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 IRAs. 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 orIRA 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. share- holders as ordinary income
whether received in cash or reinvested in Fund shares. Depending upon the
composition of the Fund's income, a portion of the dividends from net investment
income may qualify for the dividends received deduction allowable to certain
U.S. corporations. Distributions from net realized long-term securities gains of
the Fund will be taxable to U.S. shareholders 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 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 his Class A shares for shares
of another fund advised 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 Class A shares, up to the amount of the reduction of
the sales load charged on the exchange, is not included in the basis of such
investor's Class A 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.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of shares 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 in the Fund 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) 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 applicable sales charge on
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. For purposes of advertising,
certain calculations of average annual total return and total return will take
into account the performance of Dreyfus Strategic Growth, L.P., the assets and
liabilities of which were transferred to the Fund in exchange for shares of the
Fund on December 31, 1995. See "General Information."
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., Morgan Stanley Capital International World Index,
Standard & Poor's 500 Composite Stock Price Index, Standard & Poor's MidCap 400
Index, the Dow Jones Industrial Average, Morningstar, Inc. and other industry
publications.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust under the laws
of the Commonwealth of Massachusetts pursuant to an Agreement and Declaration of
Trust (the "Trust Agreement") dated May 14, 1993. The Fund is authorized to
issue an unlimited number of shares of beneficial interest, par value $.001 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 when Class voting is permitted by the Fund's
Board or as otherwise required by law. Only holders of Class B or Class C shares
will be entitled to vote on matters submitted to shareholders pertaining to the
Distribution Plan.
On December 31, 1995, all of the assets and liabilities of the Fund's
predecessor fund _ Dreyfus Strategic Growth, L.P. (the "Partnership") _ were
transferred to the Fund in exchange for Class A shares of beneficial interest of
the Fund pursuant to a proposal approved at a Meeting of Partners of the
Partnership held on December 1, 1995.
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Fund. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Fund
and requires that notice of such disclaimer be given in the agreement,
obligation or instrument entered into or executed by the Fund or a Board member.
The Trust Agreement provides for indemnification from the Fund's property for
all losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder incurring financial
loss on account of a shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Fund, the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Fund intends to conduct its operations
in a way so as to avoid, as far as possible, ultimate liability of the
shareholders for liabilities of the Fund. As discussed under "Management of the
Fund" in the Statement of Additional Information, the Fund ordinarily will not
hold shareholder meetings; however, shareholders under certain circumstances may
have the right to call a meeting of shareholders for the purpose of voting to
remove Board members.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account. The Fund sends annual and semi-annual
financial statements to all its shareholders.
Shareholder inquiries may be made to your Service Agent or by writing to
the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144.
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.
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.
LEVERAGE -- Leveraging exaggerates 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.
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 Objective and Management
Policies--Management Policies--Derivatives" in the Statement of Additional
Information.
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 it 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 signif- icant, rapid and unpredictable changes in the prices for
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
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.
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. The Fund continues to be entitled
to payments in amounts equal to the interest, dividends or other distributions
payable on the loaned securities which affords the Fund an opportunity to earn
interest on the amount of the loan and at the same time to earn income on the
loaned securities' collateral. Loans of portfolio securities may not exceed
331/3% of the value of the Fund's total assets, and the Fund will receive
collateral consisting of cash, U.S. Government securities or irrevocable letters
of credit which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Such loans are
terminable by the Fund at any time upon specified notice. The Fund might
experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Fund.
FORWARD COMMITMENTS -- The 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 payment until it receives delivery from the counterparty. The
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 Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES -- Convertible securities may be converted at either
a stated price or stated rate into underlying shares of common stock.
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.
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 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 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 or A-1 by
S&P, (b) issued by companies having an outstanding unsecured debt issue
currently rated at least A3 by Moody's or A- by S&P, 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
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.
PREMIER EQUITY FUNDS, INC.
PART B
STATEMENT OF ADDITIONAL INFORMATION
October 10, 1996
Acquisition of the Assets of
PREMIER STRATEGIC GROWTH FUND
200 Park Avenue
New York, New York 10166
1-800-554-4611
By and in Exchange for Shares of
PREMIER AGGRESSIVE GROWTH FUND
200 Park Avenue
New York, New York 10166
1-800-554-4611
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with the
Prospectus/Proxy Statement dated October 10, 1996, relating specifically to the
proposed transfer of all or substantially all of the assets and liabilities of
Premier Strategic Growth Fund in exchange for shares of Premier Aggressive
Growth Fund. The transfer is to occur pursuant to an Agreement and Plan of
Reorganization. This Statement of Additional Information consists of this cover
page and the following described documents, each of which is attached hereto and
incorporated herein by reference:
1. The Statement of Additional Information of
Premier Equity Funds, Inc. dated July 1, 1996.
2. Annual Report of Premier Aggressive Growth Fund
for the fiscal year ended September 30, 1995.
3. Semi-Annual Report of Premier Aggressive Growth
Fund for the six-month period ended March 31, 1996.
4. Annual Report of Premier Strategic Growth Fund
for the fiscal year ended December 31, 1995.
5. Semi-Annual Report of Premier Strategic Growth
Fund for the six-month period ended June 30, 1996.
The Prospectus/Proxy Statement dated October 10, 1996
may be obtained by writing to Premier Equity Funds, Inc., c/o
The Dreyfus Corporation, 200 Park Avenue, New York, New York
10166.
PREMIER EQUITY FUNDS, INC.
PREMIER CAPITAL 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
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Premier Capital 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.
Closed-End Investment Companies. (All Funds) A 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 Capital Growth Fund only) In
connection with its securities lending transactions, Premier Capital 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 Capital 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 Capital 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:
<TABLE>
Total Compensation
From Company and
Aggregate Fund Complex
Name of Board Compensation Paid to Board
Member From Company* Member
- ------------- ------------- ------------------
<S> <C> <C>
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.
</TABLE>
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 Capital 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 Capital 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 Capital Growth Fund and Premier Growth and Income Fund),
Thomas A. Frank (with respect to Premier Capital Growth Fund), Donald C.
Geogerian (with respect to Premier Capital Growth Fund) and Michael L. Schonberg
(with respect to Premier Capital 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 Capital 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 Capital
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 Capital 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 Capital 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 Capital Growth Fund
shares. For the fiscal year ended September 30, 1995, no amount was retained by
the Distributor from sales loads on Premier Capital 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 Capital 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, 1995 for Premier Capital Growth
Fund and March 31, 1996 for Premier Growth and Income Fund:
Premier Capital Premier Growth
Growth Fund* and Income Fund
Net Asset Value per Share. . . . . $16.31 $16.31
Per Share Sales Charge - 4.5%
of offering price (4.7% of
net asset value per share). . . $ .77 $ .77
Per Share Offering Price to
the Public. . . . . . . . . . . $17.08 $17.08
_____________________
* Class A shares of Premier Capital Growth Fund purchased by shareholders
beneficially owning Fund shares on December 31, 1995 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
Capital Growth Fund's total assets. For the fiscal year ended September 30,
1995, Premier Capital 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 Capital 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 Capital
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 Capital 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 Capital 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 Capital 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 Capital 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.
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.
PREMIER CAPITAL GROWTH FUND
FINANCIAL HIGHLIGHTS
<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 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, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
LETTER TO SHAREHOLDERS
Dear Shareholder:
In early August, Michael L. Schonberg became the portfolio manager of
Premier Capital Growth Fund, Inc. I selected Mr. Schonberg to become a Dreyfus
portfolio manager, based on his broad and successful experience in a number of
key positions in the securities industry. Before coming to Dreyfus, Mr.
Schonberg was responsible for managing growth-oriented portfolios at the DuPont
Pension Fund and UBS Asset Management New York (a $30 billion money management
firm), where he served as Chief Investment Officer and Vice Chairman of its
Investment Policy Committee. He has also held posts as portfolio manager for
Cambridge Capital Corporation and Alliance Capital Management Corporation. Most
recently, he was associated with Omega Advisors as a general partner. He is a
graduate of the Massachusetts Institute of Technology.
Mr. Schonberg's annual report on the activities of Premier Capital Growth
Fund follows.
Sincerely,
[Stephen Canter signature logo]
Stephen Canter
Chief Investment Officer
The Dreyfus Corporation
October 11, 1995 New York, N.Y.
PREMIER CAPITAL GROWTH FUND, INC.
[FORMERLY DREYFUS CAPITAL GROWTH FUND (A PREMIER FUND)]-SEE NOTE 1
LETTER TO SHAREHOLDERS
Dear Shareholder:
The following is our report to you on Premier Capital Growth Fund, Inc.,
formerly Dreyfus Capital Growth Fund (A Premier Fund), for the fiscal year ended
September 30, 1995. The name was changed to more closely identify the Fund with
Dreyfus' Premier family of funds, which are available for purchase through banks
and brokers as well as directly from Dreyfus. We appreciate your investment in
the Fund and your confidence in Dreyfus.
ECONOMIC ENVIRONMENT
For most of the past 12 months, the U.S. economy expanded, in spite of a
restrictive monetary policy pursued by the Federal Reserve Board until early
last summer. In July of this year the Fed switched gears and lowered its
short-term interest rates by a minimal amount. This action was taken because the
American economy had started to slow down and the central bank wanted to make
sure that the slowdown would not turn into a full-fledged recession.
The most recent economic statistics do indeed indicate that the Fed has
successfully reduced the rate of economic expansion, which in turn has warded
off threats of a recurrence of price or wage inflation.
Thanks to low interest rates, the construction industry continues to look
vigorous. However, retail sales and industrial production have cooled off. Gross
Domestic Product continues to grow, but at a reduced rate. Unemployment remains
steady at somewhat below six percent. However, job growth according to the
latest statistics has diminished its pace.
Economists now are wondering whether this pause in economic growth is a
prelude to something more serious, or is simply a pause before faster growth is
resumed.
On the global scene, economic growth is slowing due to the long-lagged
effects of the dynamic interest rate rise in 1994. Our analysis is that, while
short bursts of faster growth may temporarily occur, current monetary and fiscal
trends portend more below-average growth in 1996, with 1997 likely to see a more
sustained economic and earnings growth phase if the liquidity background
improves further. European economic activity is slowing, and Japan remains in
need of a major stimulus program to accelerate growth in 1996.
MARKET ENVIRONMENT
As we see it, the financial markets have a continued positive background
since increased monetary liquidity and lower interest rates should occur in the
current slow-growth, low-inflation environment. The corollary of this for equity
investments is that the risk of some 1996 earnings disappointments has
increased. Therefore, industry exposure and company focus must be very carefully
chosen.
A case in point is the sell-off in late September and early October of high
technology stocks, after they had reached unprecedented high prices and record
price/earnings ratios. To be sure, this has uncovered a number of situations
where these stocks are now much more attractively priced. However, the lesson
has been underscored that earnings and prospects for future earnings are
decisive in stock price fluctuations.
PORTFOLIO OVERVIEW
My approach to growth investing can be summarized as follows:
1. Stock selection is based primarily on forecast of future (12 to 18
months) relative earnings growth, by company, as relative stock performance is
strongly correlated to relative earnings performance. Top-down sector earnings
forecasts supplement company-specific fundamentals in final portfolio
construction.
2. This selection approach leads to a growth-style portfolio core of
above-average, long-term growth companies supplemented when appropriate by large
cyclical positions, if justified by a strong cyclical earnings recovery. Large
and medium capitalization stocks will dominate the portfolio, with selected
small cap stocks included when sufficient trading liquidity exists. Selling
stocks short is a tactic that may be used in a bearish stock market environment
or in anticipation of a fundamental problem leading to a serious
company-specific earnings problem.
3. Foreign stocks can be used as an extension of a strong domestic
concept, as an opportunity to take advantage of a cyclical regional earnings
recovery, and as an alternative to U.S. stocks when U.S. shares are relatively
unattractive.
4. Index futures and options offer the opportunity to hedge market risk
in a bearish cyclical market phase and for some hedging in major corrections
in a bull market. On occasion, when we consider market conditions to be
favorable, the Fund will also employ leverage techniques to enhance the
potential for profits from an investment position.
REFOCUSING THE PORTFOLIO
Basically, we began changing the Fund's portfolio in mid-August, though the
previous portfolio manager had made some sales before that date in anticipation
of the new emphasis we had planned.
When we assumed management, the portfolio was in a very conservative stance
- - 42% of the portfolio was in stocks, and 58% in cash, in defense against a
possible stock market decline.
The large cash holdings were a drag on performance in a rising market, but
greatly simplified our task of redesigning the portfolio. By the end of
September, the Fund's portfolio had been substantially changed to reflect the
new investment style.
When the Fund's latest fiscal year ended September 30, 1995, its assets were
almost fully invested in equities. About 22% was in Technology stocks, 15% in
Health Care issues, 14% in Financial stocks, 10% in the Energy industry, and the
remainder in a variety of industry groups (see Statement of Investments on the
following page).
The Fund's largest position still is Philip Morris Cos. which we have
retained from the previous holdings. Other major investments reflect our
approach. These include TEVA Pharmaceutical Industries, A.D.R. (an
Israeli-based company), Ford Motor, Xerox, cisco Systems, First Interstate
Bancorp and Triton Energy.
In the present market atmosphere we are concentrating on the following
principal themes:
Continued earnings growth in 1996. This includes computer networking (cisco
Systems, Informix); office equipment (Xerox); semi-conductors (Micron
Technology, Applied Materials); insurance (CNA Financial, Ace Limited, USF&G,
20th Century Industries); industrial growth (Grace (W.R.), Crown Cork & Seal).
New products and production growth. Examples: Biotechnology (Biogen);
steel (AK Steel Holding); computer hardware (Storage Technology).
We intend to avoid most industrial and commodity cyclical areas where stock
prices and earnings expectations are vulnerable to reduced future expectations
because of overly optimistic 1996 earnings forecasts.
International areas of interest include selected European growth
opportunities, Japan as an eventually recovering major economy, and Hong Kong
with a strong earnings outlook and depressed marketing valuation due to the
"China factor" and excessive fear of rising interest rates. Generally speaking,
however, investment opportunities being equal, we prefer U.S. stocks, due to
accessibility of financial information.
FISCAL YEAR RESULTS
Obviously, the past 12 months' performance does not as yet fully reflect the
changes we made in the portfolio in August and September. With more than half of
its assets in cash until early August, the effect of rising stock prices could
not benefit the entire portfolio. For the 12 months ended September 30, 1995,
Premier Capital Growth Fund had a total return of 11.21%, based on net asset
value per share.* This compares with 28.01% for the Dow Jones Industrial Average
and 29.71% for the Standard & Poor's 500 Index.**
In managing the Fund, we intend to meet frequently with the management of
companies where we already have an investment or are considering one. We are
greatly assisted in gathering information about growth company candidates by a
strong Dreyfus staff of research analysts and economists.
With their help, we look forward to serving your investment needs.
Sincerely,
Michael L. Schonberg
Portfolio Manager
October 11, 1995 New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
**Source: Lipper Analytical Services, Inc. Unlike the Fund, the Standard &
Poor's 500 Composite Stock Price Index and the Dow Jones Industrial Average
are unmanaged indices of stock market performance.
<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.
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
PREMIER CAPITAL GROWTH FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
Premier Capital Growth Fund completed its latest fiscal half-year on March
31, 1996. We are pleased to provide you with this report on the investment
results for that six-month period. In addition to information on the activities
and results of the Fund, we also include an assessment of the U.S. economy and a
look at the market for equities in general.
ECONOMIC REVIEW
In April, the U.S. economy embarked on its sixth expansion year for this
business cycle. However, the previous year was one of slow economic expansion
with the picture remaining sluggish in the past six months. This kept inflation
moderate, but it also began to erode corporate profitability. The combination of
slow economic growth and low inflation helped pull interest rates down sharply
in 1995. While short-term interest rates remained quite low until very recently,
long-term rates have risen substantially since January. Higher long-term rates
reflect a shift in the market's view about the direction of the economy.
Long-term rates that rise above short-term rates indicate a steep yield curve,
which is favorable for sustained economic growth. Hence, we believe that this
business cycle could last still longer.
Although the economy surged 3.6% in the third quarter of 1995, it then
slowed to only 0.5% in the fourth quarter, and remains below trend in early
1996. Sequential events have made the economy volatile in the last six months:
the Boeing and GM strikes, the Federal shutdown and the severe winter weather.
These shocks created caution in key economic sectors. Since the third quarter,
real consumer spending has increased only 1.9%. Capital spending slowed from its
previously strong pace. And weak overseas economies may now be curbing exports.
On the plus side, job growth has been steady, boosting real disposable income by
3.6% - almost double the rise in consumer spending. New orders for capital goods
are robust. Housing construction and sales are at high levels. The uncertainty
of demand nevertheless kept producers cautious, leaving inventories quite lean
in many economic sectors. Low inventories relative to demand provide a force for
sustained economic growth and could spur the economy to somewhat faster growth
in coming months.
Consumer price inflation held near its 3% trend in the last six months. But
evidence of pricing power is already emerging: Lean inventories mean that
retailers needn't discount as much; tight housing markets have boosted housing
prices in some regions; consumer spending strength has bolstered prices at
hotels, airlines and cruise ships; high crude oil prices are forcing gasoline
prices upwards; and there is early evidence of rising real wages. The market has
only recently begun to focus on the potential for rising price inflation that
could result from an acceleration in economic growth. Reported higher inflation
could justify a Federal Reserve Board policy switch towards tightening.
Corporate profits fared well in the low inflation, slow growth environment
of 1995. Operating profits on S&P 500 companies rose an estimated 17% above 1994
levels, helped by the weak dollar and more corporate restructuring. However,
slower economic growth at home and declining growth abroad began to take their
toll on profits toward year-end. Current market expectations are that profits
will grow only 4.2% in 1996, tempered by a slow economy and by the ending of
this cycle's phase of corporate restructuring. Key determinants of this year's
ultimate profit growth will be whether the U.S. economy can grow faster than the
2% expected by the market, how soon foreign economies recover and whether
domestic companies will be able to raise prices.
Interest rates fell considerably in 1995, but have moved upwards since
January. Short-term rates have risen marginally, from 4.76% to 5.00%, as
expectations for further easing by the Federal Reserve are now disappearing.
Long-term bond yields have risen more substantially, from a low of 5.96% to near
6.90%. There are two key reasons for higher long-term rates. First, the economy
is proving fundamentally strong enough to survive the shocks of recent months.
And second, hopes for a balanced budget agreement this year are dampened, making
this a contentious political issue not likely to be resolved until election
time.
We believe that the steeper yield curve that has developed in recent
months bodes well for sustained economic growth. In addition, low inventories
could spur a period of faster economic growth in coming months. This raises a
key concern whether faster economic growth would ignite inflation this time
around.
MARKET OVERVIEW
The past six months have witnessed one of the strongest rises in average
stock prices in many years. This was based on the combination of low interest
rates, which continued for most of the period; a very moderate rate of
inflation; and strong corporate profits.
To be sure, the rising tide of stock prices did not lift all the boats.
Heavily capitalized blue chip companies represented in the Dow Jones Industrial
Average rose more than the general market, as measured by the Standard & Poor's
500 Composite Stock Price Index. However, this was also a good period for small
capitalization stocks that appear in the Russell 2000 Index.
It would seem that many investors, disappointed with the drop in yields on
fixed-income securities, are taking money out of bond funds and money market
assets to purchase common stocks, either directly or through mutual funds. This
trend is confirmed by the impressive growth of equity mutual fund assets. One
major factor has been the growth of 401(k) and other retirement plans that give
employees the right to choose their own investment vehicles. But quite apart
from retirement plans, individual investors and large institutions have also
been seeking out equities on their own.
As the latest fiscal period for your Fund closed, the rush into equities
was given pause by signs that the pace of economic activity was speeding up,
bringing with it the threat of higher interest rates. To what extent this
will cool down the equity market remains to be seen.
PORTFOLIO FOCUS
For the six months under review, Premier Capital Growth Fund, Class A shares
returned 2.57%. Class B, C and R shares, available only since January 3, 1996,
returned 2.90%, 2.90% and 3.17%, respectively, for the three months ended March
31, 1996.*
During the same period, October 1995 through March 1996, the Dow Jones
Industrial Average had a total return of 18.04% and the Standard & Poor's 500
Composite Stock Price Index returned 11.70%.** For the last three months, the
Dow Jones returned 9.80% and the S&P 500 was up 5.37%.
There were two principal reasons why the Fund underperformed the major stock
market benchmarks in the last three and six months. The first reason was that
the Fund was underweighted, compared to broad market indexes, in the energy
sector, a particularly strong performer in recent months. The second factor was
selling pressure that affected a few specific stocks in the Fund's portfolio,
especially in the health care and technology areas. However, we have every
confidence that these pressures are temporary. We believe the stocks affected
should resume their long-term growth patterns soon.
It may be relevant to report that, despite recent market volatility, the
Fund is fully invested. We are still convinced that portfolio exposure in the
U.S. should continue to focus on stocks that we expect will show continued
earnings growth in 1996-97; companies with new products and production growth;
and smaller capitalization companies expected to show an aggressive growth
pattern.
In the first group (earnings) we would place computer networking and data
storage companies; office equipment; consumer growth situations; insurance;
communications and entertainment; and specialty chemicals.
In the second group (new products and production) are our selections in
pharmaceutical and biotechnology companies and certain oil and gas stocks.
The third group (aggressive growth small caps) consists of financial
services, small cap pharmaceuticals and biotechnology, auto parts companies,
selected medical services and telecommunications stocks.
In the current economic environment, we consider that near-term and 1997
earnings growth expectations are the key to absolute stock market performance.
We continue to identify attractively valued strong growth situations across many
industry sectors and among large, medium and small capitalization stocks.
Sincerely,
[Michael L. Schonberg signature logo]
Michael L. Schonberg
Portfolio Manager
April 16, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
The figures quoted do not reflect the maximum front-end load in the case of
Class A shares or the contingent deferred sales charge in the case of Class B
and Class C shares.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. Unlike the
Fund, which can utilize a broad range of investment techniques, both the Dow
Jones Industrial Average and the Standard & Poor's 500 Composite Stock Price
Index are widely accepted unmanaged indexes of stock market performance.
<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.
PREMIER CAPITAL GROWTH FUND
FINANCIAL HIGHLIGHTS
<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 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).
DREYFUS STRATEGIC GROWTH, L.P.
LETTER TO SHAREHOLDERS
Dear Shareholder:
The following letter to investors in Dreyfus Strategic Growth, L.P. (now
called Premier Strategic Growth Fund) is signed by Michael L. Schonberg, who is
now the Fund's Portfolio Manager.
It is a pleasure to introduce Mike Schonberg, who has been managing the Fund
since August, 1995, when he joined the Dreyfus investment management team.
Mike's previous experience includes managing growth-oriented portfolios at
DuPont Pension Fund and UBS Asset Management, New York, where he served as chief
investment officer and vice chairman of its Investment Policy Committee. He has
also held posts as portfolio manager for Cambridge Capital Corporation and
Alliance Capital Management Corp. Most recently he was associated with Omega
Advisors as a general partner. He is a graduate of the Massachusetts Institute
of Technology.
Sincerely,
[Stephen Canter signature logo]
Stephen Canter
Chief Investment Officer
The Dreyfus Corporation
January 12, 1996 New York, N.Y.
Dear Shareholder:
As of December 31, 1995, your Fund reorganized from a Delaware limited
partnership to a Massachusetts business trust. Effective January 1, 1996, the
Fund's name was changed from Dreyfus Strategic Growth, L.P. to Premier Strategic
Growth Fund. The investment objective and management policies of the Fund remain
unchanged. However, for the 1996 tax year, there will no longer be the need to
issue Schedule K-1s to Fund investors. Instead, Fund income will be reported in
a manner similar to most other funds - via Form 1099 - which will result in
simpler filing procedures.
As we mentioned, the Fund's investment objective and management policies
have not changed. Last August, however, we introduced a new investment approach.
As shown later in this letter, in the section entitled "Portfolio Focus," this
transition required about two months' time. Hence this approach had a minimal
effect on the Fund's performance for the year ended December 31, 1995.
The Fund's approach bases stock selection on a forecast of future (12 to 18
months') relative earnings growth, by company. This stems from our belief that
relative stock performance is strongly correlated to relative earnings
performance. Final construction of the portfolio rests on analysis of the
fundamentals of companies that interest us. The top-down earnings forecasts
supplement the analysis of business fundamentals.
Our selection approach leads to a growth-style portfolio which holds a core
of companies that we believe have above-average long-term growth potential. When
appropriate, we supplement this with large cyclical positions when we see signs
of a strong recovery in cyclical earnings. The portfolio normally will hold
large, medium and small capitalization stocks. Small cap selections will be
included when sufficient trading liquidity exists.
We will sell stocks short in a bearish market environment or in anticipation
of a fundamental problem that could seriously affect earnings of a particular
company.
The Fund will use foreign stocks on occasion as an extension of a strong
domestic concept, as an opportunity to participate in a cyclical regional
earnings recovery, and as an alternative to U.S. stocks when American shares
are relatively unattractive compared to foreign markets. Index futures and
options are available to the Fund to hedge market risk. However, such
instruments will be used sparingly.
ECONOMIC ENVIRONMENT
Global economic growth appears to be slowing due to the long lagged effect
of the dynamic interest rate rise in 1994. U.S. economic growth is weak, as the
consumer sector is hampered by slow employment and income growth while the
industrial sector continues to make necessary inventory adjustments. Current
monetary and fiscal trends portend more below-average growth in early 1996, with
1997 poised for a more sustained economic and earnings growth phase if the
liquidity background improves further. European economic growth is slowing and
Japan remains in need of a major economic stimulus program to accelerate growth
in 1996.
MARKET OVERVIEW
As we see it, the financial markets have a continued positive background as
increased monetary liquidity and lower interest rates develop in the current
slow growth, low inflation environment. However, the risk of selected 1996
earnings disappointments has increased. This requires very careful selection of
industry exposure and company focus.
The areas where we look for continued solid earnings growth are computer
networking, telecommunications, certain semiconductors, consumer growth stocks,
finance and industrial technology. Sectors that we favor because of new products
and technology include biotechnology, select electronic technology breakthroughs
and health care services.
PORTFOLIO FOCUS
When the transition between the Fund's portfolio managers took place last
summer the portfolio was mainly in cash, with less than 40% in equities. During
this period, significant short positions and foreign holdings were liquidated.
In August and September, new American equity positions were identified and
purchased. Currently, it is our intention to remain as fully invested as
possible; however, this may change based on market conditions.
The Fund completed its fiscal year December 31, 1995. For the 12-month
period, its total return was -4.57%, based upon net asset value per share,* well
below the return of 37.53% for the Standard & Poor's 500.** We attribute the
negative return to the fact that the Fund was basically uninvested during the
first seven months of the year when hedge positions were factored in. It was in
transition for the next two months, and became fully invested late in the year
when some key sectors such as health technology performed poorly. Since the
start of 1996, however, our selections by and large have performed well.
Currently, the portfolio emphasizes health care stocks, select technology
issues and, to a lesser degree, financial stocks. As our analysis of the
economic outlook indicates, the portfolio is underweighted in industrial
cyclical issues and utilities as well as in consumer cyclicals.
As shown in the Statement of Investments, on a later page in this report, we
favor such biotechnology stocks as Oncor, Biogen and Teva Pharmaceutical. On the
basis of breakthroughs in technology, we have selected such issues as Cree
Research, Continental Circuits, Fuisz Technology and Chromatics Color Science.
In health care services we have taken positions in Complete
Management, OncorMed, HemaCare and ThermoLase.
Selections such as these may not be conventional. The capacity for growth of
these and other stocks in the portfolio will become clear as the newly
reorganized portfolio matures.
Your investment in the Fund is very much appreciated. We will continue our
best efforts to bring you rewarding returns.
Sincerely,
Michael L. Schonberg
Portfolio Manager
January 12, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and when applicable, capital gain distributions. The
Standard & Poor's 500 Index is a widely accepted unmanaged index of U.S.
stock market performance.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF INVESTMENTS DECEMBER 31, 1995
COMMON STOCKS-102.2% SHARES VALUE
_____________
<S> <C> <C>
COMMERCIAL SERVICES-8.6% Cinar Films, Cl. B (a) 90,000 $ 1,361,250
Learning Tree International............ 28,500 445,312
Metromedia International Group....... (a) 150,000 2,100,000
Quintel Entertainment........... 119,500 567,625
______
4,474,187
______
CONSUMER DURABLES-5.1% LoJack (a) 140,000 1,557,500
Spectrum HoloByte...................... 115,000 747,500
Sterling Vision...................... (a) 50,000 343,750
_________
2,648,750
_________
CONSUMER
NON-DURABLES-8.0% ThermoLase (a) 60,000 1,552,500
Vista 2000........................... (a) 265,000 2,616,875
______
4,169,375
______
ELECTRONIC
TECHNOLOGY-20.2% Advanced Photonix, Cl. A .(a) 430,000 1,182,500
Applied Materials.................... (a) 50,000 1,968,750
cisco Systems........................ (a) 25,000 1,865,625
Continental Circuits................. (a) 100,000 1,625,000
Cree Research........................ (a) 202,000 2,979,500
Storage Technology................... (a) 40,000 955,000
______
10,576,375
______
FINANCE-9.4% ACE 30,000 1,192,500
ASTA Funding........................... 196,000 833,000
National Auto Credit................. (a) 100,000 1,625,000
Reliance Group Holdings................ 100,000 862,500
Titan Holdings....................... (a) 30,000 431,250
______
4,944,250
______
HEALTH SERVICES-12.8% Complete Management 116,000 1,029,500
Core Industries...................... (a) 120,000 1,020,000
Northstar Health Services............ (a) 225,000 1,321,875
OncorMed............................. (a) 240,000 1,440,000
On-Gard Systems...................... (a) 125,000 906,250
Quantum Health Resources............. (a) 100,000 981,250
______
6,698,875
______
HEALTH TECHNOLOGY-22.2% Biogen (a) 20,000 1,230,000
Forest Laboratories.................. (a) 25,000 1,131,250
Fuisz Technologies..................... 117,000 1,784,250
Guidant.............................. (a) 12,906 545,279
HemaCare............................. (a) 300,000 1,125,000
Mentor................................. 60,000 1,380,000
Neuromedical Systems................... 26,000 523,250
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
_____________
HEALTH
TECHNOLOGY (CONTINUED) ONCOR (a) 400,000 $ 1,800,000
Teva Pharmaceutical Industries, A.D.R.. 45,000 2,086,875
______
11,605,904
______
PROCESS INDUSTRIES-1.8% Chromatics Color Science International (a) 220,000 962,500
______
PRODUCER
MANUFACTURING-6.7% Motorcar Parts & Accessories ..(a) 160,000 2,100,000
Raychem................................ 25,000 1,421,875
______
3,521,875
______
TECHNOLOGY SERVICES-2.2%. Elcom International 15,000 228,750
Mercury Interactive.................. (a) 50,000 912,500
______
1,141,250
______
UTILITIES-5.2% AMNEX (a) 600,000 2,700,000
______
TOTAL COMMON STOCKS
(cost $56,423,796)................ .... $53,443,341
======
PRINCIPAL
CONVERTIBLE SECURED NOTES-1.9% AMOUNT
_______
HEALTH SERVICES; Comprehensive Care,
12%, 6/1/1996
(cost $1,000,000).................. (b) $ 1,000,000 $ 1,000,000
======
TOTAL INVESTMENTS (cost $57,423,796) .............................. 104.1% $54,443,341
===== ======
LIABILITIES, LESS CASH AND RECEIVABLES (4.1%) $ (2,157,521)
===== ======
NET ASSETS.................................................................. 100.0% $52,285,820
===== ======
</TABLE>
<TABLE>
<CAPTION>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security restricted as to public resale. Investment in restricted
security, with an aggregate value of $1,000,000, represents approximately
1.9% of net assets;
<S> <C> <C> <C> <C>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
______ _____ ________ _______
Comprehensive Care....................... 11/30/95 $100 1.9% cost
*The valuation of this security has been determined in good faith under
the direction of the Managing General Partners.
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $57,423,796)-see statement...................................... $54,443,341
Cash.................................................................... 1,386,528
Receivable for investment securities sold............................... 5,339,992
Dividends and interest receivable....................................... 28,339
Prepaid expenses........................................................ 5,428
______
61,203,628
LIABILITIES:
Due to The Dreyfus Corporation and subsidiaries......................... $ 44,868
Due to Distributor...................................................... 1,013
Bank loans payable-Note 2............................................... 7,020,000
Payable for investment securities purchased............................. 1,706,902
Loan commitment fees and interest payable............................... 42,909
Payable for shares of Partnership Interest redeemed..................... 4,409
Accrued expenses........................................................ 97,707 8,917,808
_____ ______
NET ASSETS ................................................................ $52,285,820
======
REPRESENTED BY:
Paid-in capital......................................................... $18,735,145
Accumulated undistributed investment income-net......................... 15,339,253
Accumulated undistributed net realized gain on investments
and foreign currency transactions..................................... 21,191,877
Accumulated net unrealized (depreciation) on investments-Note 4(b)...... (2,980,455)
______
NET ASSETS at value applicable to 1,391,605 outstanding shares of
Partnership Interest, equivalent to $37.57 per share
(unlimited number of Limited Partners).................................. $52,285,820
======
See notes to financial statements.
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995
INVESTMENT INCOME:
INCOME:
Interest.............................................................. $ 2,258,333
Cash dividends (net of $2,980 foreign taxes withheld at source)....... 273,562
_____-
TOTAL INCOME...................................................... $ 2,531,895
EXPENSES:
Management fee-Note 3(a).............................................. 565,274
Investor servicing costs-Note 3(b).................................... 343,150
Interest expense-Note 2............................................... 158,454
Legal fees............................................................ 88,458
Auditing fees......................................................... 56,998
Registration fees..................................................... 42,398
Managing General Partners' fees and expenses-Note 3(c)................ 38,574
Loan commitment fees-Note 2........................................... 31,684
Custodian fees........................................................ 28,969
Prospectus and investors' reports-Note 3(b)........................... 18,281
Dividends on securities sold short.................................... 13,600
Miscellaneous......................................................... 2,600
_____-
TOTAL EXPENSES.................................................... 1,388,440
_____-
INVESTMENT INCOME-NET............................................. 1,143,455
_____-
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments-Note 4(a):
Long transactions (including options transactions
and foreign currency transactions)................................ $ 6,923,776
Short sale transactions............................................... (1,414,083)
Net realized (loss) on forward currency exchange contracts-Note 4(a);
Short transactions.................................................... (88,843)
Net realized gain (loss) on financial futures-Note 4(a):
Long transactions..................................................... 73,099
Short transactions.................................................... (8,025,060)
__________
NET REALIZED (LOSS)............................................... (2,531,111)
Net unrealized (depreciation) on investments (including options
transactions), foreign currency transactions and securities sold
short [including ($86,591) net unrealized (depreciation)
on financial futures]................................................. (1,774,747)
__________
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (4,305,858)
__________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(3,162,403)
======
See notes to financial statements.
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
________________________________
1994 1995
______ ______
OPERATIONS:
Investment income-net................................................... $ 1,612,811 $ 1,143,455
Net realized gain (loss) on investments................................. 1,612,943 (2,531,111)
Net unrealized (depreciation) on investments for the year............... (3,309,863) (1,774,747)
______ ______
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ (84,109) (3,162,403)
______ ______
PARTNERSHIP INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................... 72,386,547 4,051,009
Cost of shares redeemed................................................. (18,806,148) (47,496,495)
______ ______
INCREASE (DECREASE) IN NET ASSETS FROM
PARTNERSHIP INTEREST TRANSACTIONS................................. 53,580,399 (43,445,486)
______ ______
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... 53,496,290 (46,607,889)
NET ASSETS:
Beginning of year....................................................... 45,397,419 98,893,709
______ ______
End of year (including undistributed investment income-net:
$14,195,798 in 1994 and $15,339,253 in 1995).......................... $ 98,893,709 $ 52,285,820
====== ======
SHARES SHARES
______ ______
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 1,799,462 104,015
Shares redeemed......................................................... (475,280) (1,224,539)
______ ______
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... 1,324,182 (1,120,524)
====== ======
See notes to financial statements.
</TABLE>
DREYFUS STRATEGIC GROWTH, L.P.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated
May 1, 1996.
See notes to financial statements.
DREYFUS STRATEGIC GROWTH, L.P.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act") as
a non-diversified open-end management investment company. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. Premier Mutual
Fund Services, Inc. (the "Distributor") acts as the Fund's distributor. 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.
As of December 31, 1995, Dreyfus Partnership Management Inc., a wholly-owned
subsidiary of the Manager, held 18,788 shares. The Manager is a direct
subsidiary of Mellon Bank, N.A.
Effective on January 1, 1996, the Fund was reorganized as a Massachusetts
business trust under the name Premier Strategic Growth Fund. Effective January
2, 1996 the Fund will offer four classes of shares-Class A, Class B, Class C and
Class R. The currently existing class of shares will be designated as Class A.
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 on redemptions 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 Managing General Partners. 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.
DREYFUS STRATEGIC GROWTH, L.P.
NOTES TO FINANCIAL STATEMENTS (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) DISTRIBUTIONS TO INVESTORS: Distributions from investment income-net
and distributions from net realized capital gains may be allocated and paid
annually after the end of the year in which earned.
(E) INCOME TAXES: As a partnership, the Fund itself will not be subject to
Federal, State and City income taxes. Instead, each investor will be allocated,
and subject to tax on, his distributive share of the Fund's income. Therefore,
no income tax provision is required.
NOTE 2-BANK LINE OF CREDIT:
In accordance with an agreement with a bank, the Fund may borrow up to
$25 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
.125 of 1% on the total line of credit. Interest on borrowings is charged at
rates which are related to Federal Funds rates in effect from time to time.
Outstanding borrowings on December 31, 1995 under the line of credit,
amounted to $7.02 million, at an annualized interest rate of 6.53%.
The average daily amount of short-term debt outstanding during the year
ended December 31, 1995 was approximately $2,313,000, with a related weighted
average annualized interest rate of 6.85%. The maximum amount borrowed at any
time during the year ended December 31, 1995 was $13.5 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, brokerage, interest on borrowings
(which, in the view of Stroock & Stroock & Lavan, counsel to the Fund, also
contemplates loan commitment fees and 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 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 11\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 December 31, 1995.
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 $4,944 for the period from December 1, 1995
through December 31, 1995.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $14,322 during the year ended December 31, 1995 from commissions earned
on sales of Fund shares.
DREYFUS STRATEGIC GROWTH, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) Effective August 1, 1995, the Fund adopted a Shareholder Services Plan,
pursuant to which it pays the Distributor for the provision of certain services
to Fund shareholders a fee at the annual rate of .25 of 1% of the value of the
Fund's average daily net assets. 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 August 1,
1995 through December 31, 1995, the Fund was charged $63,227 pursuant to the
Shareholder Services Plan.
Prior to August 1, 1995, the Service Plan (the "Plan") pursuant to Rule
12b-1 under the Act, provided for the Fund to (a) reimburse the Distributor for
payments to third parties for distributing the Fund's shares and servicing
shareholder accounts ("Servicing") and (b) pay the Manager, Dreyfus Service
Corporation or any affiliate (collectively "Dreyfus") for advertising and
marketing relating to the Fund and Servicing, at an annual rate of .25 of 1% of
the value of the Fund's average daily net assets. Each of the Distributor and
Dreyfus may have paid Service Agents (a securities dealer, financial institution
or other industry professional) a fee in respect of the Fund's shares owned by
shareholders with whom the Service Agent had a Servicing relationship or for
whom the Servicing Agent was the dealer or holder of record. Each of the
Distributor and Dreyfus determined the amounts, if any, to be paid to Service
Agents under the Plan and the basis on which such payments are made. The Plan
also separately provided for the Fund to bear the costs of preparing, printing
and distributing certain of the Fund's prospectuses and statements of additional
information and costs associated with implementing and operating the Plan, not
to exceed the greater of $100,00 0 or .005 of 1% of the Fund's average daily net
assets for any full year. During the period January 1, 1995 through July 31,
1995, the Fund was charged $130,779 pursuant to the Plan.
(C) Each Managing General Partner who is not an "affiliated person" as
defined in the Act receives from the Fund an annual fee of $2,500 and an
attendance fee of $250 per meeting. The Chairman of the Board receives an
additional 25% of such compensation.
NOTE 4-SECURITIES TRANSACTIONS:
(A) The following summarizes 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 December 31, 1995:
<TABLE>
<CAPTION>
PURCHASES SALES
________ ________
<S> <C> <C>
Long transactions................................................ $143,998,640 $115,921,817
Short sale transactions.......................................... 20,597,804 6,436,494
________ ________
TOTAL........................................................... $164,596,144 $122,358,311
======== ========
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at current market value. The
Fund would incur a loss if the price of the security increases between the date
of the short sale and the date on which the Fund replaces the borrowed security.
The Fund would realize a gain if the price of the security declines between
those dates. Until the Fund replaces the borrowed security, the Fund will
maintain daily, a segregated account with a broker and custodian, of cash and/or
U.S. Government securities sufficient to cover its short position. At December
31, 1995, there were no securities sold short outstanding.
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.
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the Fund to
"mark to market" on a daily basis, which reflects the change in the market
value of the contract at the close of each day's trading. Accordingly,
variation margin payments are received or made to reflect daily unrealized
gains or losses. When the contracts are closed, the Fund recognizes a
realized gain or loss. These investments require initial margin deposits with
a custodian, which consist of cash or cash equivalents, up to approximately
10% of the contract amount. The amount of these deposits is determined by the
exchange or Board of Trade on which the contract is traded and is subject to
change. At December 31, 1995, there were no financial futures contracts
outstanding.
(B) At December 31, 1995, accumulated net unrealized depreciation on
investments was $2,980,455, consisting of $5,039,618 gross unrealized
appreciation and $8,020,073 gross unrealized depreciation.
At December 31, 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).
DREYFUS STRATEGIC GROWTH, L.P.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
INVESTORS AND MANAGING GENERAL PARTNERS
DREYFUS STRATEGIC GROWTH, L.P.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Strategic Growth, L.P., including the statement of investments, as of
December 31, 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
December 31, 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
Dreyfus Strategic Growth, L.P. at December 31, 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
February 12, 1996
Semi-Annual Report
Premier Stategic
Growth Fund
June 30, 1996
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Letter to Shareholders
Dear Shareholder:
We are pleased to report that for the six-month fiscal period ended June 30,
1996, total returns for the Premier Strategic Growth Fund were17.86% for the
Fund's Class A shares,18.13% for Class B, 18.13% for Class C and 18.66% for
Class R shares.* These results compare with a total return of 10.09% for the
Standard & Poor's 500 Composite Stock Price Index over the same time period.**
In the following sections of this letter, we will discuss the current
economic and securities market environment, and then report on the composition
of the portfolio and the sectors that are now being emphasized.
THE ECONOMY
The U.S. economy is rebounding in 1996 following its midcycle growth
slowdown of last year. Yet overall corporate profit growth is slowing this year.
Although inflation remains low, faster economic growth has reignited fears of
higher inflation in the future. This has pushed bond yields higher and built
expectations for a Federal Reserve Board tightening in coming months. This is
the sixth year of expansion for this business cycle, which we believe will prove
a long one.
Economic growth has accelerated since year-end. The first quarter's 2.2%
real growth in Gross Domestic Product included a rebound in demand which
depleted inventories. Even stronger second quarter growth is apparent, led by
manufacturers' attempts to rebuild inventories. In addition, steady job creation
continues to support growth in consumer incomes and spending. As yet, there are
few indications of economic cooling. Some previously strong capital goods
sectors may now be slowing, but overall economic growth is broadening to more
industries. Despite better economic performance this year than last, profit
growth may have peaked last year.
Non-oil price inflation has remained minimal this year, although surging oil
prices boosted overall inflation temporarily this spring. Nevertheless, signs of
a faster economic pace have renewed fears of higher inflation in the future,
especially coming from upward pressure on wages. Thus, bond yields have risen
substantially this year. Short-term market rates are also higher on expectations
for Federal Reserve tightening in coming months. So far, long-term rates have
risen much more than short-term rates, forcing the "yield curve" to steepen. A
steep yield curve is usually supportive of sustained growth in the real economy.
As we look forward, the question arises whether the higher interest rates
already in place and those in prospect will effectively cool the economy. At
present, however, any advance signs of an eventual cooling off in the economy
are hard to discern. The preoccupation at present is with the economy's
impressive strength, and the problems that it could create.
MARKET OVERVIEW
The broad trend of the stock market was strongly upward during the six
months under review, reaching a peak in May. However, there were many
crosscurrents at work. Not all stock groups benefitted equally. The blue chips
in the Dow Jones Industrial Average enjoyed solid advances for the six months,
as did the broader market as represented by the Nasdaq Composite Index and the
Standard & Poor's 500. However, as spring turned into summer, technology stocks
began to lag and small capitalization stocks were unable to maintain the very
fast growth pace of earlier months.
From time to time, unexpected signs of economic strength, particularly
employment and unemployment numbers, jolted the equity markets with the specter
of renewed inflation. Especially in the latter part of the half-year, concern
over inflation and higher interest rates restrained market performance in a
number of industry categories.
Profits, always a major element in stock performance, continued strong for a
good part of the period. However, fear of rising labor costs and intensified
competition at home and abroad have cast some shadows over the profit outlook.
This has been balanced, however, by the very large sum of money that continues
to be invested in equity mutual funds, much of it from people planning for their
retirement.
PORTFOLIO FOCUS
The portfolio has been managed in the belief that interest rates will remain
in a narrow trading range and may decline somewhat if economic momentum slows
later this summer. With a portfolio of stocks showing strong fundamental revenue
and earnings growth, we remain fully invested based on our positive investment
outlook.
The sectors in which the portfolio is overweighted, compared to the S&P 500
Index weightings, are health care, technology and consumer growth stocks. The
portfolio is underweighted in finance, utilities and energy. Foreign holdings
remain at a very small weighting.
As shown in the Statement of Investments, on a later page in this report,
our major areas of concentration are as follows: medical technology (Fuisz
Technologies, ONCOR, Chromatics Color Science International, MacroChem,
Cytoclonal Pharmaceutics), new consumer products (Ultrafem), auto parts
(Motorcar Parts & Accessories), entertainment (Casino Data Systems, Quintel
Entertainment, Metromedia International, Cinar Films), telephone industry
restructuring (Amnex), medical services (Complete Management, Core, HemaCare,
Pharmaceutical Product Development), electronic network technology (Cisco
Systems, Mercury Interactive) and niche technology (Voice Control Systems,
Advanced Photonix, Personal Computer Products).
As stated in our previous report six months ago, selections such as these
may not be conventional. However, we believe that these and other stocks in the
portfolio, chosen after careful research, have capacity for further growth.
It is a pleasure and an honor to serve your investment needs.
Sincerely,
(logo signature)
Michael L. Schonberg
Portfolio Manager
July 10, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
These figures do not reflect the maximum sales load for Class A shares or the
contingent deferred sales charge for Class B and Class C shares. The inception
date for Class B, C and R shares was January 3, 1996.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. Unlike the
Fund, which can utilize a broad range of investment techniques, the Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index of
U.S. stock market performance composed of only equity securities.
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Investments June 30, 1996 (Unaudited)
Common Stocks-122.9% Shares Value
------------- ------------
<S> <C> <C>
Commercial Services-5.1% Katz Digital Technologies....................... 80,000 $ 460,000
Quintel Entertainment........................... 205,600 2,158,800
------------
2,618,800
------------
Consumer
Non-Durables-7.9% Ultrafem........................................ 200,000 3,950,000
Vista 2000...................................(a) 240,000 134,880
------------
4,084,880
------------
Consumer Services-14.0% Alma International...........................(a) 200,000 600,000
Casino Data Systems..........................(a) 135,000 2,041,875
Checkfree....................................... 40,000 795,000
Cinar Films, Cl. B...........................(a) 90,000 1,957,500
Metromedia International Group...............(a) 70,000 857,500
Wiztec Solutions................................ 90,000 945,000
------------
7,196,875
------------
Electronic
Technology-16.4% Advanced Photonix, Cl. A.....................(a) 450,000 1,715,625
cisco Systems................................(a) 30,000 1,698,750
Cree Research................................(a) 80,000 1,200,000
Personal Computer Products...................(a) 1,275,000 2,908,594
Voice Control Systems........................(a) 100,000 912,500
------------
8,435,469
------------
Finance-2.8% ASTA Funding.................................... 196,000 1,421,000
------------
Health Services-21.6% Complete Management............................. 227,000 2,922,625
Comprehensive Care.........................(a,b) 132,560 845,070
Core.........................................(a) 165,000 2,402,813
Heartport....................................... 14,000 423,500
HemaCare.....................................(a) 425,000 1,593,750
Northstar Health Services....................(a) 225,000 450,000
OncorMed.....................................(a) 275,000 1,925,000
Ongard Systems...............................(a) 125,000 593,750
------------
11,156,508
------------
Health Technology-24.3% Avigen.......................................... 85,000 595,000
Cytoclonal Pharmaceutics........................ 50,000 206,250
Cytoclonal Pharmaceutics, Cl. D (Warrants)...... 200,000 137,500
Cytogen......................................(a) 983 8,908
EuroMed......................................... 45,000 281,250
Fuisz Technologies.............................. 180,000 3,420,000
MacroChem....................................(a) 212,500 1,062,500
NeoPharm........................................ 150,000 1,875,000
NeoPharm (Warrants)............................. 55,000 309,375
Oncor........................................(a) 430,000 2,365,000
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Investments (continued) June 30, 1996 (Unaudited)
Common Stocks (continued) Shares Value
------------- -------------
Health Technology
(continued) Teva Pharmaceutical Industries, A.D.R........... 35,000 $ 1,325,625
VIMRx Pharmaceuticals........................(a) 200,000 937,500
------------
12,523,908
------------
Industrial Services-1.7% Commodore Applied Technologies.................. 130,000 723,125
Commodore Applied Technologies (Warrants)....... 100,000 175,000
------------
898,125
------------
Process Industries-4.9% Chromatics Color Science International.......(a) 240,000 1,725,000
Ocal............................................ 150,000 825,000
------------
2,550,000
------------
Producer
Manufacturing-8.2% Motorcar Parts & Accessories.................(a) 155,000 2,441,250
Raychem......................................... 25,000 1,796,875
------------
4,238,125
------------
Technology Services-11.8% Mercury Interactive..........................(a) 160,000 2,200,000
Microware Systems............................... 100,000 1,800,000
Romac International............................. 15,000 382,500
Systems of Excellence........................(a) 400,000 1,262,500
Verilink........................................ 16,900 430,950
------------
6,075,950
------------
Utilities-4.2% AMNEX........................................(a) 600,000 2,175,000
------------
TOTAL INVESTMENTS (cost $58,488,798)................................................ 122.9% $ 63,374,640
======= ============
LIABILITIES, LESS CASH AND RECEIVABLES.............................................. (22.9%) $(11,801,531)
======= ============
NET ASSETS.......................................................................... 100.0% $ 51,573,109
======= ============
</TABLE>
<TABLE>
<CAPTION>
Notes to Statement of Investments:
(a) Non-income producing.
(b) Security restricted as to public resale. Investment in restricted
security, with an aggregate value of $845,070, represents approximately
1.6% of net assets;
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation*
------ ------------ --------- --------------- ---------------
<S> <C> <C> <C> <C>
Comprehensive Care............. 11/30/95 $7.54 1.6% 15% discount
to market value
*The valuation of this security has been determined in good faith under
the direction of the Board of Trustees.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $58,488,798)-see statement...................................... $63,374,640
Cash.................................................................... 251,588
Receivable for investment securities sold............................... 937,000
Receivable for shares of Beneficial Interest subscribed................. 52,252
Dividends and interest receivable....................................... 810
Prepaid expenses........................................................ 14,255
-----------
64,630,545
LIABILITIES:
Due to The Dreyfus Corporation and affiliates........................... $ 50,799
Due to Distributor...................................................... 1,521
Bank loans payable-Note 2............................................... 11,855,000
Payable for investment securities purchased............................. 905,285
Loan commitment fees and interest payable............................... 140,576
Payable for shares of Beneficial Interest redeemed...................... 12,449
Accrued expenses........................................................ 91,806 13,057,436
----------- -----------
NET ASSETS.................................................................. $51,573,109
===========
REPRESENTED BY:
Paid-in capital......................................................... $45,922,769
Accumulated investment (loss)-net....................................... (683,845)
Accumulated undistributed net realized gain on investments.............. 1,448,343
Accumulated net unrealized appreciation on investments-Note 4........... 4,885,842
-----------
NET ASSETS at value......................................................... $51,573,109
===========
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 1,154,150
===========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 10,086
===========
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 27
===========
Class R Shares
(unlimited number of $.001 par value shares authorized)............... 420
===========
NET ASSET VALUE per share:
Class A Shares
($51,108,353 / 1,154,150 shares)...................................... $44.28
=======
Class B Shares
($444,975 / 10,086 shares)............................................ $44.12
=======
Class C Shares
($1,181.29 / 26.774 shares)........................................... $44.12
=======
Class R Shares
($18,600 / 419.710 shares)............................................ $44.32
=======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Operations six months ended June 30, 1996 (Unaudited)
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest.............................................................. $ 52,826
Cash dividends (net of $1,319 foreign taxes withheld at source)....... 23,002
------------
Total Income.................................................... $ 75,828
Expenses:
Management fee-Note 3(a).............................................. 201,672
Interest expense-Note 2............................................... 331,373
Shareholder servicing costs-Note 3(c)................................. 114,564
Professional fees..................................................... 54,550
Trustees' fees and expenses-Note 3(d)................................. 17,043
Loan commitment fees-Note 2........................................... 15,799
Prospectus and shareholders' reports.................................. 10,935
Registration fees..................................................... 5,609
Custodian fees-Note 3(c).............................................. 5,372
Distribution fees-Note 3(b)........................................... 313
Miscellaneous......................................................... 2,443
------------
Total Expenses.................................................. 759,673
------------
INVESTMENT (LOSS)-NET........................................... (683,845)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 4................................. $1,448,344
Net unrealized appreciation on investments.............................. 7,866,297
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 9,314,641
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $8,630,796
===========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Cash Flows six months ended June 30, 1996 (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Dividends received...................................................... $ 39,015
Interest received....................................................... 2,822
Interest, loan commitment fees and dividends on securities sold short paid (249,505)
Operating expenses paid................................................. (225,244)
Paid to The Dreyfus Corporation......................................... (195,546) $ (628,458)
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of portfolio securities....................................... (37,097,346)
Proceeds from sales of portfolio securities............................. 41,143,583 4,046,237
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Fund shares sold.......................................... 1,953,857
Payments for Fund shares redeemed....................................... (11,341,576)
Net repayment of bank loans............................................. 4,835,000 (4,552,719)
----------- -----------
Decrease in cash...................................................... (1,134,940)
Cash at beginning of period........................................... 1,386,528
-----------
Cash at end of period................................................. $ 251,588
============
RECONCILIATION OF NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS TO NET CASH USED BY OPERATING ACTIVITIES:
Net Increase in Net Assets Resulting From Operations.................... $ 8,630,796
Adjustments to reconcile net decrease in net assets resulting from operations
to net cash used by operating activities:
Decrease in interest receivable................................... 11,516
Decrease in dividends receivable.................................. 16,013
Increase in interest, loan commitment fees and dividends on securities
sold short payable.............................................. 97,667
Decrease in accrued operating expenses............................ (5,901)
Increase in prepaid expenses...................................... (8,827)
Increase in due to The Dreyfus Corporation........................ 6,439
Net interest sold on investments.................................. (61,520)
Net realized gain on investments.................................. (1,448,344)
Net unrealized appreciation on investments........................ (7,866,297)
-----------
Net Cash Used by Operating Activities....................................... $ (628,458)
=============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Statement of Changes in Net Assets
Year Ended Six Months Ended
December 31, June 30, 1996
1995 (Unaudited)
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income (loss)_net............................................ $ 1,143,455 $ (683,845)
Net realized gain (loss) on investments................................. (2,531,111) 1,448,344
Net unrealized appreciation (depreciation) on investments for the period (1,774,747) 7,866,297
------------ ------------
Net Increase (Decrease) In Net Assets Resulting From Operations... (3,162,403) 8,630,796
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 4,051,009 1,489,432
Class B shares........................................................ ___ 496,209
Class C shares........................................................ ___ 1,000
Class R shares........................................................ ___ 19,468
Cost of shares redeemed:
Class A shares........................................................ (47,496,495) (11,348,269)
Class B shares........................................................ ___ (1,347)
------------ ------------
(Decrease) In Net Assets From Beneficial Interest Transactions.... (43,445,486) (9,343,507)
------------ ------------
Total (Decrease) In Net Assets.................................. (46,607,889) (712,711)
NET ASSETS:
Beginning of period..................................................... 98,893,709 52,285,820
------------ ------------
End of period [including undistributed investment income-net;
$15,339,253 in 1995 and investment (loss)-net; ($683,845) in 1996].... $ 52,285,820 $ 51,573,109
============= ============
</TABLE>
<TABLE>
<CAPTION>
Shares
--------------------------------------------------------------------------------
Class A Class B Class C Class R
----------------------------- ---------------- ---------------- -----------------
Year Ended Six Months Ended Six Months Ended Six Months Ended Six Months Ended
December 31, June 30, 1996 June 30, 1996 June 30, 1996 June 30, 1996
1995 (Unaudited) (Unaudited)* (Unaudited)* (Unaudited)*
---------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE
TRANSACTIONS:
Shares sold........ 104,015 31,958 10,114 27 420
Shares redeemed.... (1,224,539) (269,413) (28) ___ ___
---------- ------------- ------------- ----------- ------------
Net Increase
(Decrease) In
Shares
Outstanding.. (1,120,524) (237,455) 10,086 27 420
=========== ======== ======== ========== =========
* From January 2, 1996 (commencement of initial offering) to June 30, 1996.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest 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 Shares
-----------------------------------------------------------------------
Year Ended December 31, Six Months Ended
-------------------------------------------------- June 30, 1996
PER SHARE DATA: 1991 1992 1993 1994 1995 (Unaudited)
------ ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $27.27 $36.19 $30.63 $38.22 $39.37 $37.57
------ ------ ------ ------- ------ ------
Investment Operations:
Investment income (loss)_net.......... 2.07 1.38 2.21 .87(1) 5.37 (.55)(1)
Net realized and unrealized gain (loss)
on investments...................... 6.85 (6.94) 5.38 .28 (7.17) 7.26
------ ------ ------ ------- ------ ------
Total from Investment Operations.... 8.92 (5.56) 7.59 1.15 (1.80) 6.71
------ ------ ------ ------- ------ ------
Net asset value, end of period........ $36.19 $30.63 $38.22 $39.37 $37.57 $44.28
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)................ 32.71% (15.36%) 24.78% 3.01% (4.57%) 17.86%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average
net assets.......................... 1.50%(4) 1.50%(4) 1.59%(4) 1.46% 1.57% .76%(3)
Ratio of interest expense, loan commitment
fees and dividends on securities sold short
to average net assets............... .08% .22% .03% .16% .27% .64%(3)
Ratio of net investment income (loss) to
average net assets.................. 1.48% .83% .79% 2.17% 1.52% (1.26%)(3)
Decrease reflected in above expense ratios due
to undertaking by the Manager....... -- -- .06% -- -- --
Average commission rate paid(5)....... -- -- -- -- -- $.0548
Portfolio Turnover Rate............... 95.49% 209.38% 301.07% 269.41% 298.93% 56.61%(3)
Net Assets, end of period (000's Omitted) $61,063 $44,765 $45,397 $98,894 $52,286 $51,108
(1) Based on an average of shares outstanding at each month end.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Net of expenses reimbursed.
(5) For fiscal years beginning January 1, 1996, the Fund is required
to disclose its average commission rate paid per share for purchases
and sales of investment securities.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest 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
------------------- ------------------- -------------------
Six Months Ended Six Months Ended Six Months Ended
June 30, 1996 June 30, 1996 June 30, 1996
(Unaudited)(1) (Unaudited)(1) (Unaudited)(1)
------------------- ------------------- -------------------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............... $37.35 $37.35 $37.35
------ ------ ------
Investment Operations:
Investment (loss)-net.............................. (.63)(2) (.71)(2) (.66)(2)
Net realized and unrealized gain on investments.... 7.40 7.48 7.63
------ ------ ------
Total from Investment Operations................. 6.77 6.77 6.97
------ ------ ------
Net asset value, end of period..................... $44.12 $44.12 $44.32
====== ====== ======
TOTAL INVESTMENT RETURN(3)(4).......................... 18.13% 18.13% 18.66%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets(4) 1.13% 1.13% .62%
Ratio of interest expense and loan commitment fees
to average net assets(4)......................... .73% .63% .69%
Ratio of net investment (loss) to average net assets(4) (1.79%) (1.60%) (1.21%)
Portfolio Turnover Rate(4)......................... 56.61% 56.61% 56.61%
Average commission rate paid(5).................... $.0548 $.0548 $.0548
Net Assets, end of period (000's Omitted).......... $445 $1 $19
(1) From January 2, 1996 (commencement of initial offering) to June 30, 1996.
(2) Based on an average of shares outstanding at each month end.
(3) Exclusive of sales load.
(4) Not annualized.
(5) For fiscal years beginning January 1, 1996, the Fund is required to
disclose its average commission rate paid per share for purchases and
sales of investment securities.
See independent accountants' review report and notes to financial statements.
</TABLE>
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1-Significant Accounting Policies:
Premier Strategic Growth Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end management
investment company. The Fund's investment objective is to maximize 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").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor
of the Fund's shares.
On December 15, 1995, the Fund's Trustees approved a change of the Fund's
name, effective January 1, 1996, from "Dreyfus Strategic Growth, L.P." to
"Premier Strategic Growth Fund". Effective on January 1, 1996, the Fund was
reorganized as a Massachusetts business trust under the name Premier Strategic
Growth Fund. Effective January 2, 1996, the Fund offers four classes of
shares_Class A, Class B, Class C and Class R. The existing class of shares were
designated as Class A. 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 on redemptions 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 Trustees. 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 Strategic Growth
Fund (formerly Dreyfus Strategic Growth, L.P.)
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.
Prior to January 1, 1996 the Fund was a limited partnership and was not
required to distribute net investment income or realized capital gains to avoid
Federal income and excise taxes. Prior years' net investment income and realized
gains and losses had been allocated to shareholders and not paid, in accordance
with the limited partnership structure. This resulted in a difference between
financial reporting purposes versus Federal income tax purposes, with respect to
the treatment of such allocated net investment income and realized gains and
losses. The Fund has therefore reclassified $21,191,878 from accumulated net
realized gain on investments and $15,339,253 from accumulated undistributed
investment income-net to paid-in-capital. This amount represented the cumulative
effect of such differences. Results of operations and net assets were not
effected by this reclassification.
(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
interest 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 Line of Credit:
The Fund may borrow up to $25 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 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 line of credit utilized for leveraging. Outstanding borrowings under
both arrangements on June 30, 1996 amounted to $11.86 million.
The average daily amount of borrowings outstanding under both arrangements
during the six months ended June 30, 1996 was approximately $10,368,000, with a
related weighted average annualized interest rate of 6.43%. The maximum amount
borrowed at any time during the six months ended June 30, 1996 was $13.9
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, brokerage, interest on borrowings (which, in the
view of Stroock & Stroock & Lavan, counsel to the Fund, also contemplates loan
commitment fees and dividends and interest accrued on securities sold short),
and extraordinary expenses, exceed the expense limitation.
Premier Strategic Growth Fund
(formerly Dreyfus Strategic Growth, L.P.)
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 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.
There was no expense reimbursement for the six months ended June 30, 1996.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $14,138 during the six months ended June 30, 1996 from commissions
earned on sales of Fund shares.
(b) Effective January 2, 1996, the Fund adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the Plan, 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 six months ended June 30, 1996, $309
and $4 were charged to the Class B and Class C shares, respectively, by the
Distributor pursuant to the Plan.
(c) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A, Class B and Class C shares for provision of certain services. 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 (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 six months ended June 30, 1996, $67,111, $103 and $1
were charged to the Class A, Class B and Class C shares, respectively, 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 $26,889 during the six months ended June 30, 1996.
Effective May 10, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. For the period from May 10,
1996 to June 30, 1996 $1,950 was paid to Mellon pursuant to the custody
agreement.
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250 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 six months ended June 30, 1996,
amounted to $36,295,729 and $36,670,175, respectively.
At June 30, 1996, accumulated net unrealized appreciation on investments
was $4,885,842, consisting of $13,568,060 gross unrealized appreciation and
$8,682,218 gross unrealized depreciation.
At June 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 EQUITY FUNDS, INC.
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
The response to this item is incorporated by reference to Item 27 of Part C
of Post-Effective Amendment No. 61 to the Registrant's Registration Statement on
Form N-1A, filed on June 27, 1996.
ITEM 16. Exhibits - All references are to Post-Effective
Amendment No. 59 to the Registrant's Registration
Statement on Form N-1A, filed on December 29, 1995
(File No. 2-30806) (the "Registration Statement")
unless otherwise noted.
(1)(a) Registrant's Articles of Amendment and
Restatement are incorporated by reference to Exhibit
(1)(a) to the Registration Statement.
(1)(b) Registrant's Articles Supplementary are
incorporated by reference to Exhibit (1)(b) to
the Registration Statement.
(2) Registrant's Bylaws, as amended, are incorporated
by reference to Exhibit (2) to the Registration
Statement.
(3) Not Applicable.
1(4) Form of Agreement and Plan of Reorganization.
(5) Not Applicable.
(6) Registrant's Management Agreement is incorporated
by reference to Exhibit (5) to the Registration
Statement.
(7) Registrant's Distribution Agreement is
incorporated by reference to Exhibit (6) to the
Registration Statement.
(8) Not Applicable.
(9) Registrant's Custody Agreement is incorporated by
reference to Exhibit (8)(b) of Post-Effective
Amendment No. 61 to the Registration Statement on
Form N-1A, filed on June 27, 1996.
(10) Registrant's Shareholder Services Plan is
incorporated by reference to Exhibit (9) to the
Registration Statement.
(11) Opinion and consent of Stroock & Stroock & Lavan
regarding legality of issuance of shares and
other matters is incorporated by reference to
Exhibit (10) to the Registration Statement.
(12) Opinion and consent of Stroock & Stroock & Lavan
regarding tax matters.
(13) Not Applicable.
(14) Consent of Independent Auditors.
(15) Not Applicable.
- --------
1 Filed herewith as Exhibit A to the Prospectus/Proxy
Statement.
2(16) Powers of Attorney.
(17) Form of Proxy.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this registration statement by
any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c) of the Securities Act of 1933, as
amended, the reoffering prospectus will contain the
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of
the applicable form.
(2) The undersigned registrant agrees that every prospectus that
is filed under paragraph (1) above will be filed as a part of
an amendment to the registration statement and will not be
used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933, as
amended, each post-effective amendment shall be deemed to be a
new registration statement for the securities offered therein,
and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of them.
- --------
2 Incorporated by reference to the signature page hereto.
SIGNATURES
As required by the Securities Act of 1933, this Registration
Statement has been signed on behalf of the Registrant, in the City of New York,
State of New York, on the 9th day of September, 1996.
PREMIER EQUITY FUNDS, INC.
(Registrant)
By:/S/MARIE E. CONNOLLY
Marie E. Connolly, President
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints Elizabeth Bachman his/her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities (until
revoked in writing) to sign any and all amendments to this Registration
Statement (including post-effective amendments and amendments thereto), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing ratifying and confirming all that said attorney-in-fact and
agent, or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
/S/MARIE E. CONNOLLY President and Treasurer September 9, 1996
- ----------------------
Marie E. Connolly (Principal Executive
Officer)
/S/JOHN F. TOWER, III Assistant Treasurer September 9, 1996
- ----------------------
John F. Tower, III (Principal Financial
and Accounting Officer)
/S/JOSEPH S. DIMARTINO Director September 9, 1996
- ----------------------
Joseph S. DiMartino
/S/DAVID P. FELDMAN Director September 9, 1996
- ------------------------
David P. Feldman
/S/JOHN M. FRASER, JR. Director September 9, 1996
- -------------------------
John M. Fraser, Jr.
/S/ROBERT R. GLAUBER Director September 9, 1996
- -------------------------
Robert R. Glauber
/S/JAMES F. HENRY Director September 9, 1996
- -------------------------
James F. Henry
/S/ROSALIND GERSTEN JACOBS Director September 9, 1996
- --------------------------
Rosalind Gersten Jacobs
/S/IRVING KRISTOL Director September 9, 1996
- -------------------------
Irving Kristol
/S/DR. PAUL A. MARKS Director September 9, 1996
- -------------------------
Dr. Paul A. Marks
/S/DR. MARTIN PERETZ Director September 9, 1996
- -------------------------
Dr. Martin Peretz
/S/BERT W. WASSERMAN Director September 9, 1996
- --------------------------
Bert W. Wasserman
INDEX OF EXHIBITS
(12) Opinion and consent of Stroock & Stroock & Lavan regarding tax matters.
(14) Consent of Ernst & Young LLP, Independent Auditors.
<PAGE>
EXHIBIT 12
___________, 1996
Premier Strategic Growth Fund
200 Park Avenue
New York, New York 10166
Premier Equity Funds, Inc.
200 Park Avenue
New York, New York 10166
Re: Registration Statement on Form N-14
(REGISTRATION NO. 333- )
Gentlemen:
You have requested our opinion as to certain Federal income tax consequences of
the reorganization contemplated by the Agreement and Plan of Reorganization,
substantially in the form included as Exhibit A to the Registration Statement on
Form N-14 of Premier Equity Funds, Inc. (Reg. No. 333-_______) (the
"Registration Statement"), between Premier Strategic Growth Fund (the "Acquired
Fund") and Premier Equity Funds, Inc. (the "Company"), on behalf of Premier
Aggressive Growth Fund (the "Acquiring Fund"). You have advised us that the
Acquired Fund and the Acquiring Fund each has qualified and will qualify as a
"regulated investment company" within the meaning of Subchapter M of Chapter 1
of the Internal Revenue Code of 1986, as amended (the "Code"), for each of its
taxable years ending on or before or including the Closing Date.
In rendering this opinion, we have examined the Agreement and Plan of
Reorganization, the Registration Statement, the Articles of Incorporation, as
amended, of the Company, the Agreement and Declaration of Trust of the Acquired
Fund, the Prospectus and Statement of Additional Information of the Acquiring
Fund and the Acquired Fund, incorporated by reference in the Registration
Statement, and such other documents as we have deemed necessary or relevant for
the purpose of this opinion. In issuing our opinion, we have relied upon the
representation of the Acquired Fund that its Agreement and Declaration of Trust
is the document pursuant to which it has operated to date and that it has
operated in accordance with all laws applicable to such entity and the
statements and representations made herein and in the Registration Statement. We
also have relied upon the representation of the Company that its Articles of
Incorporation, as amended, is the document pursuant to which it has operated to
date and will operate following the reorganization and that it has operated and
will operate following the reorganization in accordance with all laws applicable
to such entity and the statements and representations made herein and in the
Registration Statement. As to various questions of fact material to this
opinion, where relevant facts were not independently established by us, we have
relied upon statements of, and written information provided by, representatives
of the Company and the Acquired Fund. We also have examined such matters of law
as we have deemed necessary or appropriate for the purpose of this opinion. We
note that our opinion is based on our examination of such law, our review of the
documents described above, the statements and representations referred to above
and in the Registration Statement and the Agreement and Plan of Reorganization,
the provisions of the Code, the regulations, published rulings and announcements
thereunder, and the judicial interpretations thereof currently in effect. Any
change in applicable law or any of the facts and circumstances described in the
Registration Statement, or inaccuracy of any statements or representations on
which we have relied, may affect the continuing validity of our opinion.
Capitalized terms not defined herein have the respective meanings given such
terms in the Agreement and Plan of Reorganization.
Based on the foregoing, it is our opinion that for Federal income tax purposes:
(a) The transfer of all or substantially all of the Acquired Fund's
assets in exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of certain identified liabilities of the Acquired Fund will
constitute a "reorganization" within the meaning of Section 368(a)(1)(C) of the
Code;
(b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the Acquiring
Fund Shares and the assumption by the Acquiring Fund of certain identified
liabilities of the Acquired Fund;
(c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange for the
Acquiring Fund Shares and the assumption by the Acquiring Fund of certain
identified liabilities of the Acquired Fund or upon the distribution of the
Acquiring Fund Shares to Acquired Fund Shareholders in exchange for their shares
of the Acquired Fund;
(d) No gain or loss will be recognized by Acquired Fund Shareholders
upon the exchange of their Acquired Fund shares for the Acquiring Fund Shares;
(e) The aggregate tax basis for the Acquiring Fund Shares received by
an Acquired Fund Shareholder pursuant to the reorganization will be the same as
the aggregate tax basis of the Acquired Fund shares held by such shareholder
immediately prior to the reorganization, and the holding period of the Acquiring
Fund Shares to be received by the Acquired Fund Shareholder will include the
period during which the Acquired Fund shares exchanged therefor were held by
such shareholder (provided the Acquired Fund shares were held as capital assets
on the date of the reorganization); and
(f) The tax basis of the Acquired Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the Acquired
Fund immediately prior to the reorganization, and the holding period of the
assets of the Acquired Fund in the hands of the Acquiring Fund will include the
period during which those assets were held by the Acquired Fund.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the Prospectus/Proxy
Statement included in the Registration Statement, and to the filing of this
opinion as an exhibit to any Statement, and to the filing of this opinion as an
exhibit to any application made by or on behalf of the Acquiring Fund or any
distributor or dealer in connection with the registration and qualification of
the Acquiring Fund or the Acquiring Fund Shares under the securities laws of any
state or jurisdiction. In giving such permission, we do not admit hereby that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
STROOCK & STROOCK & LAVAN
<PAGE>
Exhibit 14
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Financial
Statements and Experts" in this Registration Statement (Form N-14) of Premier
Equity Funds. Inc.
We also consent to the use of our reports dated November 7, 1995 and
February 12, 1996 for Premier Capital Growth Fund, Inc. and Dreyfus Strategic
Growth, L.P. respectively, and to the references to our firm under the captions
"Condensed Financial Information" and "Custodian, Transfer and Dividend
Disbursing Agent, Counsel and Independent Auditors" included in the Registration
Statements of Premier Equity Funds, Inc. dated June 27, 1996, and Premier
Strategic Growth Fund dated May 1, 1996 which are incorporated by reference in
this Registration Statement.
ERNST & YOUNG LLP
New York, New York
September 6, 1996
