DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholders:
September 30, 1998 marked the end of the latest fiscal year for the Dreyfus
Premier Growth and Income Fund. The past 12 months have been a very challenging
investment environment with many cross-currents buffeting world economies and
financial markets. Total returns for the various share classes during the fiscal
year ended September 30, 1998 are shown in the following table:
Total Return*
___________________________________________
Class A . . . . . . . . . . . . . . . . -7.00
Class B . . . . . . . . . . . . . . . . -7.69
Class C . . . . . . . . . . . . . . . . -7.63
Class R . . . . . . . . . . . . . . . . -6.89
Large capitalization stocks, as measured by the Standard & Poor' s 500
Composite Stock Price Index, returned in total 9.08%, while small-cap stocks
returned a negative 19.02%, as measured by the Russell 2000 Index.** Although
the Fund's results could be characterized as somewhat disappointing, as we will
discuss, they are not surprising given current market circumstances and the
Fund's history and evolution.
ECONOMIC REVIEW
So far in 1998, the main regions of the world have had very different economic
fundamentals. The U.S. entered the year with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board (the "Fed") to contemplate a rise in interest rates
early in the year. The U.S. economy cooled enough that the Fed decided to stand
pat for a number of months before cutting the Federal Funds rate in September
and October. Evidence of economic cooling continued to accumulate and worries
about the world economy intensified. World economic weakness then shifted
expectations towards monetary easing. After many years of subpar economic
growth, continental Europe moved into a better economic expansion. Unlike the
U.S., Europe has substantial excess capacity of productive plant and labor. In
Asia, weak economies were pervasive as a result of the Asian financial crisis.
The Latin American economies weakened as the financial stresses spread
throughout that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The fall
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in income after inflation, a strong labor
market and past increases in the prices of assets they owned.
The negative effect of Asian weakness was directed towards the industrial
sector more than the consumer sector. Corporate profits weakened, especially in
sectors sensitive to Asia such as world-traded commodities (oil, metals and
paper) and exports. One result of the industrial weakness was to cool off a U.S.
economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for
commodity-exporting countries throughout the world. The effect on Europe and the
U.S. has been to lower expectations of profit growth and drive down bond yields
Market sentiment now anticipates further monetary easing in the U.S. and other
industrial countries as the evidence of a weaker world economy has accumulated.
There appears to be a shift in the priorities of key policymakers from fighting
potential inflation to restimulating future world economic growth.
MARKET OVERVIEW
The 12 months ended September 30, 1998 encompassed some very different market
phases, with stock market strength during much of the period followed by a sharp
decline towards the end of the period. Over the 12 months, the total return on
the S& P 500 was 9.08% . Returns on mid-cap and small-cap stock indices were
weaker, with a negative total return on small-cap indices.
Three key trends influenced stock market behavior during the fiscal year.
First, the Federal Reserve kept the Federal Funds rate flat at 5.5% for most of
the fiscal year, before 25 basis-point cuts in both September and October.
Sentiment changed from expectations of a possible Fed Funds rate increase to
widespread expectations of lower interest rates, especially after the Fed easing
in late September. Second, weakness in the economies of emerging countries
contributed to declining commodity prices and a drop in long-term Treasury bond
yields to multidecade lows. Third, expectations for corporate profits dropped,
first in the sectors sensitive to Asian developments such as oil, basic
materials and exports and then for a broader list of stocks.
The trigger for the sharp decline in stocks at the end of the period appeared
to be the Russian default in the summer of 1998. This resulted in deepening
concerns about weaker economic growth and corporate profits. There was also a
global margin call on risky assets held by hedge funds and financial
institutions. This raised the cost of debt financing for many corporations and
many emerging countries. Expectations for economic activity in emerging
countries in Asia and Latin America shifted down sharply while expectations for
U.S. corporate profits weakened somewhat. Despite the fall in Treasury bond
yields, financial stocks led the summer sell-off due to concerns about financial
contagion from emerging countries and potential loan losses by financial
institutions.
The erosion of expectations about corporate profit growth over the last year
contributed to an outperformance by a small group of super-cap growth stocks
until late in the fiscal year. Investors had more confidence in the prospect for
strong persistent earnings growth for this small group of stocks than for the
broad market. Value stocks, which often have greater cyclical sensitivity to
earnings fluctuations, lagged behind these super-growth stocks. In addition,
many of the financial stocks which fall into the value category fell sharply
following the Russian default.
The fiscal year ended September 1998 was characterized by very different
performances of the various market sectors. The largest cap growth stocks did
best, followed by large-cap stocks in general with mid-cap and small-cap stocks
lagging behind. For example, the total return for the fiscal year on the Russell
1000 Index, with a heavy large-cap representation, was 7.36%, with the Russell
1000 Growth Index returning 11.11%, while the Russell 1000 Value Index returned
3.59% . The return on the Russell Midcap Index was -6.01%, while the small-cap
Russell 2000 Index return was -19.02%.**
PORTFOLIO FOCUS
EQUITY HOLDINGS
As I discussed in my last letter, the Fund was restructured to be primarily
focused on investments in mid- to large-capitalization companies with
above-average earnings growth prospects whose common stock is selling at
below-average price-earnings ratios. While my first priority was to reduce the
Fund' s exposure to stocks that did not meet my price-to-earnings discipline, we
maintained some of the Fund's bias to small and mid-cap stocks. This bias has
not served the Fund well in this investment climate as liquidity and large
capitalization were primary drivers of performance. During the first half of
1998 additional changes were made to the Fund, repositioning it away from small
and mid-cap stocks towards larger-cap companies, while the price-to-earnings
discipline was maintained. We believe that relative value rests with these
small- and mid-capitalization companies, but for now liquidity continues to
dominate. At some point, the extreme valuations that now exist between very
large capitalization, high price-to-earnings companies and the rest of the
equity market should narrow and we hope to capitalize on any such development.
However, on an ongoing basis, we currently anticipate that the Fund will have an
average capitalization favoring larger-weighted stocks than it has had
historically.
As the various discussions above have highlighted, the key investment drivers
have been liquidity and concerns about earnings growth. This has led to an
investment environment where performance was largely driven by capitalization,
with an emphasis on growth stocks. During the year, investments in Biogen,
Lexmark International Group, Cl. A, American Stores, Federal National Mortgage
Association, and Carnival, Cl. A, produced the largest positive contributions to
the Fund. On the other side of the ledger, issue selection and a small to
mid-cap bias hurt results. An assortment of stocks from various industries
(Wisconsin Central Transportation, Adaptec, Phycor, 3COM, and Georgia-Pacific)
registered the largest negative results.
In the current equity environment, favoring large capitalization growth
stocks, we believe that issue selection with a large capitalization bias should
be the key factor determining potential investment success. We have continued to
look for stocks with above-average long-term earnings growth potential that are
attractively priced relative to the broad market average. An example of a
recently purchased stock meeting our investment criteria is Tenet Healthcare.
Tenet Healthcare is the second largest investor-owned healthcare services
company in the U.S., owning or operating 131 acute care hospitals and related
healthcare facilities in 22 states. Purchased at a 20% price-to-earnings
discount to the S&P 500, based on 1999 projected earnings, the company currently
is expected to grow its earnings at 15% to 17% over each of the next two years
and 15% longer term, well above the market's projected growth.
We are encouraged by the Fund' s recent results. We are grateful for the
opportunity to invest your capital and will be working diligently on your behalf
to achieve satisfying long-term investment results.
Sincerely,
[Douglas D. Ramos, CFA signature logo]
Douglas D. Ramos, CFA
Portfolio Manager
October 27, 1998
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid,
and does not take into consideration the maximum initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC.--Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The Standard
& Poor' s 500 Composite Stock Price Index is a widely accepted, unmanaged index
of U.S. stock market performance. The Russell 2000 Index is a widely accepted,
unmanaged index composed of the 2,000 smallest companies in the Russell 3000
Index. The Russell 3000 Index is composed of 3,000 of the largest U.S. companies
by market capitalization. The Russell 1000 Index measures the performance of the
1,000 largest companies in the Russell 3000 index, which represents
approximately 89% of the total market capitalization of the Russell 3000 Index.
The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
The Russell Midcap Index consists of the bottom 800 securities in the Russell
1000 Index as ranked by total market capitalization and is a widely accepted
measure of medium-cap stock market performance. All indices are unmanaged and
include reinvested dividends.
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND SEPTEMBER 30, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER GROWTH
AND INCOME FUND CLASS A SHARES, CLASS B SHARES, CLASS C SHARES AND CLASS R
SHARES WITH THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX AND THE
WILSHIRE LARGE COMPANY VALUE INDEX
Dollars
$17,385
Standard & Poor's 500 Composite
Stock Price Index*
$16,889
Dreyfus Premier Growth & Income Fund (Class R Shares)
$16,309
Dreyfus Premier Growth & Income Fund (Class C Shares)
$16,011
Dreyfus Premier Growth & Income Fund (Class B Shares)
$15,711
Dreyfus Premier Growth & Income Fund (Class A Shares)
$15,292
Wilshire Large Company
Value Index**
* Source: Lipper Analytical Services, Inc.
** Source: Wilshire Associates, Inc.
Average Annual Total Returns
- -----------------------------------------------------------------------------
Class A Shares Class B Shares
_______________________________________________________ _________________________________________________________
<S> <C> <C> <C> <C> <C>
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 9/30/98 Sales Charge Sales Charge (5.75%) Period Ended 9/30/98 Redemption Redemption*
___________________ ____________ ________________ ________________ __________ _________________
1 Year (7.00)% (12.36)% 1 Year (7.69)% (10.99)%
From Inception (12/29/95) 20.33 17.79 From Inception (12/29/95) 19.39 18.59
Class C Shares Class R Shares
_______________________________________________________ _________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 9/30/98 No Redemption Redemption** Period Ended 9/30/98
___________________ ____________ __________________ ________________
1 Year (7.63)% (8.46)% 1 Year (6.89)%
From Inception (12/29/95) 19.39 19.39 From Inception (12/29/95) 20.91
- ------------------------
Past performance is not predictive of future performance.
</TABLE>
The above graph compares a $10,000 investment made in each of the Class A, Class
B, Class C and Class R shares of Dreyfus Premier Growth and Income Fund on
12/29/95 (Inception Date) to a $10,000 investment made on that date in the
Standard & Poor' s 500 Composite Stock Price Index as well as to the Wilshire
Large Company Value Index which are described below. All dividends and capital
gain distributions are reinvested.
The Fund' s performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares, the maximum contingent deferred sales
charge on Class B and Class C shares and all other applicable fees and expenses
on all classes. The Standard & Poor' s 500 Composite Stock Price Index is a
widely accepted, unmanaged index of overall stock market performance. The
Wilshire Large Company Value Index is constructed by using a blend of
price-to-book and forecast price-to-earnings ratios. The largest 750 stocks in
the Wilshire 5000 are ranked based on a style score that is 75%
price-to-earnings ratio and 25% forecast P/E. The universe is divided so that
companies that represent half of the total capitalization fall into growth and
the remainder are placed into value. The Indices do not take into account
charges, fees and other expenses. Further information relating to Fund
performance, including expense reimbursements, if applicable, is contained in
the Financial Highlights section of the Prospectus and elsewhere in this report
*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTSSEPTEMBER 30, 1998
Common Stocks--91.1% Shares Value
- ------------------------------------------------------- ____________ ____________
<S> <C> <C> <C>
Consumer Durables--5.9% Eastman Kodak . . . . . . . . . . . . . . . . . . . . 19,000 $ 1,468,938
Ford Motor . . . . . . . . . . . . . . . . . . . . . . 15,000 704,062
General Motors . . . . . . . . . . . . . . . . . . . . 24,000 1,312,500
Leggett & Platt . . . . . . . . . . . . . . . . . . . 102,000 2,116,500
____________
5,602,000
____________
Consumer Non-Durables--6.4% ConAgra . . . . . . . . . . . . . . . . . . . . . . . 62,000 1,670,125
Kimberly-Clark . . . . . . . . . . . . . . . . . . . . 49,000 1,984,500
Philip Morris Cos. . . . . . . . . . . . . . . . . . . 51,900 2,390,644
____________
6,045,269
____________
Consumer Services--.4% Cendant . . . . . . . . . . . . . . . . . . . . . . . 17,000(a) 197,625
Times Mirror, Cl. A . . . . . . . . . . . . . . . . . 3,700 196,562
____________
394,187
____________
Electronic Technology--11.0% Boeing . . . . . . . . . . . . . . . . . . . . . . . . 20,000 686,250
COMPAQ Computer . . . . . . . . . . . . . . . . . . . 33,000 1,043,625
International Business Machines . . . . . . . . . . . 12,000 1,536,000
Lexmark International Group, Cl. A . . . . . . . . . . 24,300(a) 1,684,294
Lockheed Martin . . . . . . . . . . . . . . . . . . . 5,000 504,062
Perkin-Elmer . . . . . . . . . . . . . . . . . . . . . 30,600 2,101,838
Raytheon, Cl. B . . . . . . . . . . . . . . . . . . . 13,100 706,581
Sun Microsystems . . . . . . . . . . . . . . . . . . . 10,000(a) 498,125
Sundstrand . . . . . . . . . . . . . . . . . . . . . . 14,000 649,250
United Technologies . . . . . . . . . . . . . . . . . 14,000 1,070,125
____________
10,480,150
____________
Energy Minerals--4.7% Mobil . . . . . . . . . . . . . . . . . . . . . . . . 24,000 1,822,500
Texaco . . . . . . . . . . . . . . . . . . . . . . . . 38,000 2,382,125
USX-Marathon Group . . . . . . . . . . . . . . . . . . 7,000 248,062
____________
4,452,687
____________
Finance--18.9% ACE . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 240,000
BankBoston . . . . . . . . . . . . . . . . . . . . . . 35,000 1,155,000
Chase Manhattan . . . . . . . . . . . . . . . . . . . 16,000 692,000
Chubb . . . . . . . . . . . . . . . . . . . . . . . . 30,500 1,921,500
EXEL, Cl. A . . . . . . . . . . . . . . . . . . . . . 4,000 252,000
Everest Reinsurance Holdings . . . . . . . . . . . . . 38,000 1,417,875
Federal Home Loan Mortgage . . . . . . . . . . . . . . 47,000 2,323,563
Federal National Mortgage Association . . . . . . . . 36,000 2,313,000
First Union . . . . . . . . . . . . . . . . . . . . . 31,500 1,612,406
Fleet Financial Group . . . . . . . . . . . . . . . . 29,000 2,129,687
Norwest . . . . . . . . . . . . . . . . . . . . . . . 56,000 2,005,500
SunAmerica . . . . . . . . . . . . . . . . . . . . . . 1,800 109,800
Torchmark . . . . . . . . . . . . . . . . . . . . . . 14,000 503,125
Washington Mutual . . . . . . . . . . . . . . . . . . 36,500 1,231,875
____________
17,907,331
____________
</TABLE>
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)SEPTEMBER 30, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ____________ ____________
<S> <C> <C>
Health Services--7.6% Aetna . . . . . . . . . . . . . . . . . . . . . . . . 35,000 $ 2,432,500
Beverly Enterprises . . . . . . . . . . . . . . . . . 90,000 (a) 720,000
Columbia HCA/Healthcare . . . . . . . . . . . . . . . 52,000 1,043,250
Tenet Healthcare . . . . . . . . . . . . . . . . . . . 71,000 (a) 2,041,250
Wellpoint Health Networks . . . . . . . . . . . . . . 18,000 (a) 1,009,125
____________
7,246,125
____________
Health Technology--3.9% Biogen . . . . . . . . . . . . . . . . . . . . . . . . 37,700 (a) 2,481,131
Pharmacia & Upjohn . . . . . . . . . . . . . . . . . . 23,800 1,194,463
____________
3,675,594
____________
Industrial Services--1.6% Waste Management . . . . . . . . . . . . . . . . . . . 31,400 1,509,163
____________
Non-Energy Minerals--.3% Aluminum Co. of America . . . . . . . . . . . . . . . 4,000 284,000
____________
Process Industries--1.0% duPont (E.I.) de Nemours . . . . . . . . . . . . . . . 17,000 954,125
____________
Producer Manufacturing--5.3% AlliedSignal . . . . . . . . . . . . . . . . . . . . . 27,000 955,125
Honeywell . . . . . . . . . . . . . . . . . . . . . . 7,600 486,875
Masco . . . . . . . . . . . . . . . . . . . . . . . . 78,400 1,930,600
Xerox . . . . . . . . . . . . . . . . . . . . . . . . 20,000 1,695,000
____________
5,067,600
____________
Retail Trade--5.7% American Stores . . . . . . . . . . . . . . . . . . . 89,000 2,864,687
Federated Department Stores . . . . . . . . . . . . . 24,000 (a) 873,000
May Department Stores . . . . . . . . . . . . . . . . 32,000 1,648,000
____________
5,385,687
____________
Transportation--3.1% Burlington Northern Santa Fe . . . . . . . . . . . . . 33,000 1,056,000
Union Pacific . . . . . . . . . . . . . . . . . . . . 20,200 861,025
Wisconsin Central Transportation . . . . . . . . . . 72,000 (a) 1,008,000
____________
2,925,025
____________
Utilities--15.3% AT&T . . . . . . . . . . . . . . . . . . . . . . . . . 18,000 1,051,875
Bell Atlantic . . . . . . . . . . . . . . . . . . . . 45,000 2,179,688
Coastal . . . . . . . . . . . . . . . . . . . . . . . 76,000 2,565,000
Duke Energy . . . . . . . . . . . . . . . . . . . . . 24,000 1,588,500
GTE . . . . . . . . . . . . . . . . . . . . . . . . . 36,000 1,980,000
SBC Communications . . . . . . . . . . . . . . . . . . 50,000 2,221,875
Texas Utilities . . . . . . . . . . . . . . . . . . . 63,000 2,933,437
____________
14,520,375
____________
TOTAL COMMON STOCKS
(cost $86,516,459) . . . . . . . . . . . . . . . . $86,449,318
____________
____________
</TABLE>
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)SEPTEMBER 30, 1998
Common Stocks (continued) Shares Value
- ------------------------------------------------------- ____________ ____________
<S> <C> <C>
U.S. Treasury Bills: 4.65%, 10/15/1998 . . . . . . . . . . . . . . . . . . $ 50,000 $ 49,916
4.91%, 11/12/1998 . . . . . . . . . . . . . . . . . . 136,000 135,362
4.86%, 11/19/1998 . . . . . . . . . . . . . . . . . . 322,000 320,242
4.90%, 11/27/1998 . . . . . . . . . . . . . . . . . . 567,000 563,343
4.55%, 12/17/1998 . . . . . . . . . . . . . . . . . . 710,000 703,667
4.45%, 12/24/1998 . . . . . . . . . . . . . . . . . . 2,833,000 2,805,152
4.20%, 1/7/1999 . . . . . . . . . . . . . . . . . . . 709,000 700,761
____________
TOTAL SHORT-TERM INVESTMENTS
(cost $5,275,157) . . . . . . . . . . . . . . . . $ 5,278,443
____________
TOTAL INVESTMENTS (cost $91,791,616) . . . . . . . . . . . . . . . . . . . . . . . . . . . 96.7% $91,727,761
_______ ____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3% $ 3,174,751
_______ ____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $94,902,512
_______ ____________
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1998
Cost Value
____________ ____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $91,791,616 $91,727,761
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 3,320
Receivable for investment securities sold . . . . . . . . 4,081,049
Dividends receivable . . . . . . . . . . . . . . . . . . 185,174
Receivable for shares of Common Stock subscribed . . . . 31,046
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 17,973
____________
96,046,323
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 75,046
Due to Distributor . . . . . . . . . . . . . . . . . . . 58,556
Payable for investment securities purchased . . . . . . . 837,085
Payable for shares of Common Stock redeemed . . . . . . . 133,055
Accrued expenses . . . . . . . . . . . . . . . . . . . . 40,069
____________
1,143,811
____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $94,902,512
____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $95,637,270
Accumulated net realized gain (loss) on investments,
foreign currency transactions and securities sold short . (670,903)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b) . . . . . . . . . . . . . . . (63,855)
____________
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $94,902,512
</TABLE>
<TABLE>
____________
NET ASSET VALUE PER SHARE
--------------------
Class A Class B Class C Class R
_____________ _____________ _____________ _____________
<S> <C> <C> <C> <C>
Net Assets . . . . . . . . . . . . . . . . . . . . . . $31,824,198 $59,143,506 $3,669,547 $265,261
Shares Outstanding . . . . . . . . . . . . . . . . . . 1,829,723 3,434,025 212,835 15,140
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . $17.39 $17.22 $17.24 $17.52
_______ _______ _______ _______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME: Cash dividends (net of $5,785 foreign taxes
withheld at source) . . . . . . . . . . . . . $ 1,893,442
Interest . . . . . . . . . . . . . . . . . . . . 92,578
____________
Total Income . . . . . . . . . . . . . $ 1,986,020
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . 865,004
Distribution fees--Note 3(b) . . . . . . . . . . 562,473
Shareholder servicing costs--Note 3(c) . . . . . 454,928
Registration fees . . . . . . . . . . . . . . . . 55,153
Professional fees . . . . . . . . . . . . . . . . 26,665
Directors' fees and expenses--Note 3(d) . . . . . 21,236
Prospectus and shareholders' reports . . . . . . 19,121
Custodian fees--Note 3(c) . . . . . . . . . . . . 8,067
Loan commitment fees--Note 2 . . . . . . . . . . 725
Miscellaneous . . . . . . . . . . . . . . . . . . 4,830
____________
Total Expenses . . . . . . . . . . . . 2,018,202
Less--reduction in management fee due to
undertaking--Note 3(a) . . . . . . . . . . . . (15,082)
____________
Net Expenses . . . . . . . . . . . . . 2,003,120
____________
INVESTMENT (LOSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,100)
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and
foreign currency transactions:
Long transactions . . . . . . . . . . . . $ 1,463,588
Short sale transactions . . . . . . . . . 12,540
Net realized gain (loss) on forward currency
exchange contracts . . . . . . . . . . . . . . 128,045
____________
Net Realized Gain (Loss) . . . . . . . 1,604,173
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . (9,184,986)
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . (7,580,813)
____________
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . $ (7,597,913)
____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
September 30, 1998 September 30, 1997
__________________ ___________________
<S> <C> <C>
OPERATIONS:
Investment income (loss)--net . . . . . . . . . . . . . . . . . . . . . . . . $ (17,100) $ 786,252
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . 1,604,173 12,333,304
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . (9,184,986) 6,103,441
______________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . (7,597,913) 19,222,997
______________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (103,354) (489,113)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (312,112)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (28,180)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,288) (3,378)
Net realized gain on investments:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,256,479) (1,625,160)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,237,792) (2,153,920)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (521,235) (196,847)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,101) (11,381)
______________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,147,249) (4,820,091)
______________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,975,661 20,228,297
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,287,995 35,546,757
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 948,288 4,748,666
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,341 161,295
Dividends reinvested:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,018,653 1,937,255
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,501,854 2,129,131
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326,647 128,219
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,399 14,759
Cost of shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,783,908) (15,559,198)
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,779,224) (14,190,548)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,140,721) (2,874,632)
Class R shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,614) (114,833)
______________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . (2,590,629) 32,155,168
______________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . (22,335,791) 46,558,074
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,238,303 70,680,229
______________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 94,902,512 $117,238,303
______________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
______________________________________
Year Ended Year Ended
September 30, 1998 September 30, 1997
__________________ ___________________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309,070 1,096,093
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . 218,373 108,196
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (717,728) (828,597)
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . (190,285) 375,692
__________ __________
Class B
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577,515 1,921,817
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . 355,874 120,246
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (824,107) (760,602)
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . 109,282 1,281,461
__________ __________
Class C
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,565 256,807
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . 17,869 7,233
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (110,512) (151,697)
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . (43,078) 112,343
__________ __________
Class R
________
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,717 8,448
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . . 1,531 824
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,383) (6,434)
__________ __________
Net Increase (Decrease) in Shares Outstanding . . . . 2,865 2,838
__________ __________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Class A Class B
________________________________ _______________________________
Year Ended September 30, Year Ended September 30,
________________________________ _______________________________
PER SHARE DATA: 1998 1997 1996(1) 1998 1997 1996(1)
________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . $20.94 $18.45 $12.50 $20.85 $18.37 $12.50
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . .10 .24 .10 (.06) .10 .03
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . (1.44) 3.39 5.94 (1.41) 3.38 5.87
_______ _______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . (1.34) 3.63 6.04 (1.47) 3.48 5.90
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . (.05) (.25) (.09) -- (.11) (.03)
Dividends from net realized gain
on investments . . . . . . . . . . . . . (2.16) (.89) -- (2.16) (.89) --
_______ _______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . (2.21) (1.14) (.09) (2.16) (1.00) (.03)
_______ _______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . $17.39 $20.94 $18.45 $17.22 $20.85 $18.37
_______ _______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN(2) . . . . . . . . . . . . (7.00%) 20.90% 48.24%(3) (7.69%) 20.08% 47.14%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . 1.25% 1.24% .94%(3) 2.00% 2.00% 1.52%(3)
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . . .47% 1.27% .92%(3) (.28%) .50% .34%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . .01% .11% .30%(3) .01% .11% .30%(3)
Portfolio Turnover Rate . . . . . . . . . . . . 133.00% 265.33% 205.64%(3) 133.00% 265.33% (205.64%(3))
Net Assets, end of period (000's Omitted) . . . $31,824 $42,309 $30,330 $59,144 $69,330 $37,534
- --------------
(1) From December 29, 1995 (commencement of operations) to September 30, 1996.
(2) Exclusive of sales load.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
Class A Class B
________________________________ _______________________________
Year Ended September 30, Year Ended September 30,
________________________________ _______________________________
PER SHARE DATA: 1998 1997 1996(1) 1998 1997 1996(1)
________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . $20.87 $18.40 $12.50 $21.11 $18.42 $12.50
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income (loss)--net . . . . . . . . . (.06) .09 .03 .07 .20 .43
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . (1.41) 3.38 5.88 (1.40) 3.67 5.61
_______ _______ _______ _______ _______ _______
Total from Investment Operations . . . . . . . (1.47) 3.47 5.91 (1.33) 3.87 6.04
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . . . -- (.11) (.01) (.10) (.29) (.12)
Dividends from net realized gain
on investments . . . . . . . . . . . . . (2.16) (.89) -- (2.16) (.89) --
_______ _______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . . . (2.16) (1.00) (.01) (2.26) (1.18) (.12)
_______ _______ _______ _______ _______ _______
Net asset value, end of period . . . . . . . . $17.24 $20.87 $18.40 $17.52 $21.11 $18.42
_______ _______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . (7.63%)(2) 19.89%(2) 47.27%(2,3) (6.89%) 22.25% 48.38%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . 1.96% 2.00% 1.52%(3) 1.15% .99% .79%(3)
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . . (.25%) .52% .30%(3) .57% 1.50% 1.01%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . .01% .11% .30%(3) .01% .12% .30%(3)
Portfolio Turnover Rate . . . . . . . . . . . . 133.00% 265.33% 205.64%(3) 133.00% 265.33% (205.64%(3))
Net Assets, end of period (000's Omitted) . . . $3,670 $5,340 $2,642 $265 $259 $174
- --------------
(1) From December 29, 1995 (commencement of operations) to September 30, 1996.
(2) Exclusive of sales load.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Growth and Income Fund (the "Fund" ) is a separate
non-diversified series of Dreyfus Premier Equity Funds, Inc. (the "Company")
which is registered under the Investment Company Act of 1940, as amended (the
" Act" ) as an open-end management investment company and operates as a series
company currently offering four series, including the Fund. The Fund' s
investment objective is long-term capital growth, current income and growth of
income, consistent with reasonable investment risk. The Dreyfus Corporation (the
" 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") is the distributor of
the Fund' s shares. The Fund is authorized to issue 50 million shares of $1.00
par value Common Stock in each of the following classes of shares: 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 ("CDSC") imposed on Class B share redemptions
made within six years of purchase, Class C shares are subject to a CDSC imposed
on Class C shares redeemed 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 classes include the services offered to and the expenses
borne by each class and certain voting rights.
The Company accounts separately for the assets, liabilities and operations of
each fund. Expenses directly attributable to each fund are charged to that
fund' s operations; expenses which are applicable to all funds are allocated
among them on a pro rata basis.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities exchange
on which such securities are primarily traded or at the last sales price on the
national securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices, except for open
short positions, where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of 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 and the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains or losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(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. Under the terms of the custody agreement, the Fund receives net
earnings credits based on available cash balances left on deposit.
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net are declared and paid on a quarterly basis.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "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 Code, and to make distributions of taxable income sufficient to relieve it
from substantially all Federal income and excise taxes.
During the period ended September 30, 1998, the Fund reclassified $145,326
from accumulated investment (loss) to accumulated net realized gain (loss) on
investments. Net assets were not affected by this reclassification.
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility" ) primarily to be utilized for
temporary or emergency purposes, including the financing of redemptions. In
connection therewith, the Fund has agreed to pay commitment fees on its pro rata
portion of the Facility. Interest is charged to the Fund at rates based on
prevailing market rates in effect at the time of borrowings. During the period
ended September 30, 1998, the Fund did not borrow under the Facility.
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management 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 Manager had undertaken from October
1, 1997 through December 31, 1997 to reduce the management fee paid by the Fund,
to the extent that the Fund's aggregate expenses, excluding 12b-1 distribution
fees, taxes, brokerage, interest on borrowings (which, in the view of Stroock &
Stroock & Lavan LLP, counsel to the Fund, also contemplates commitment fees and
dividends and interest accrued on securities sold short) and extraordinary
expenses, exceeded an annual rate of 1.25% of the value of the Fund's average
daily net assets. The reduction in management fee, pursuant to the undertaking,
amounted to $15,082 during the period ended September 30, 1998.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $6,116 during the period ended September 30, 1998 from commissions
earned on sales of Fund shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .75 of 1% of the value of the average daily
net assets of Class B and Class C shares, respectively. During the period ended
September 30, 1998, Class B and Class C shares were charged $526,708 and
$35,765, respectively, pursuant to the Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares
pay the Distributor at the annual rate of .25 of 1% of the value of their
average daily net assets for the 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 period ended September 30, 1998, Class A, Class B and Class C
shares were charged $100,144, $175,569 and $11,922, respectively, pursuant to
the Shareholder Services Plan.
DREYFUS PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. During the period
ended September 30, 1998, the Fund was charged $102,775 pursuant to the transfer
agency agreement.
The Fund compensates Mellon under a custody agreement for providing custodial
services for the Fund. During the period ended September 30, 1998, the Fund was
charged $8,067 pursuant to the custody agreement.
(D) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term securities
and forward currency exchange contracts, during the period ended September 30,
1998:
<TABLE>
Purchases Sales
_______________ _______________
<S> <C> <C>
Long transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,069,784 $169,311,591
Short sale transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,475 114,015
_______________ _______________
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,171,259 $169,425,606
_______________ _______________
</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 permissable
liquid assets sufficient to cover its short position. At September 30, 1998,
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 gain on each open
contract. At September 30, 1998, there were no open forward currency exchange
contracts.
(B) At September 30, 1998, accumulated net unrealized depreciation on
investments was $63,855, consisting of $7,355,250 gross unrealized appreciation
and $7,419,105, gross unrealized depreciation.
At September 30, 1998, 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 PREMIER GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS PREMIER GROWTH AND INCOME FUND
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier Growth and Income
Fund (one of the Funds constituting Dreyfus Premier Equity Funds, Inc.) as of
September 30, 1998, 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 and financial highlights. Our procedures included verification by
examination of securities held by the custodian as of September 30, 1998 and
confirmation of securities not held by the custodian by correspondence with
others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Premier Growth and Income Fund at September 30, 1998, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with generally accepted accounting
principles.
New York, New York
November 11, 1998
DREYFUS PREMIER GROWTH AND INCOME FUND
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IMPORTANT TAX INFORMATION (UNAUDITED)
The Fund hereby designates 20.136% of the ordinary dividends paid during the
fiscal year ended September 30, 1998 as qualifying for the corporate dividends
received deduction. Shareholders will receive notification in January 1999 of
the percentage applicable to the preparation of their 1998 income tax returns.
DREYFUS PREMIER GROWTH
AND INCOME FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 320AR989
ANNUAL REPORT
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DREYFUS PREMIER
GROWTH AND INCOME
FUND
- -------------------------------------------------------------------------------
SEPTEMBER 30, 1998
(reg.tm)
[Lion "d" logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER GROWTH
AND INCOME FUND CLASS A SHARES, CLASS B
SHARES, CLASS C SHARES AND CLASS R SHARES WITH THE STANDARD & POOR'S 500
COMPOSITE STOCK PRICE INDEX AND THE WILSHIRE LARGE COMPANY VALUE INDEX
EXHIBIT A:
DREYFUS DREYFUS DREYFUS DREYFUS
STANDARD PREMIER PREMIER PREMIER PREMIER
& POOR'S GROWTH GROWTH GROWTH GROWTH
500 AND AND AND AND WILSHIRE
COMPOSITE INCOME INCOME INCOME INCOME LARGE
STOCK FUND FUND FUND FUND COMPANY
PERIOD PRICE (CLASS A (CLASS B (CLASS C (CLASS R VALUE
INDEX* SHARES) SHARES) SHARES) SHARES) INDEX
12/29/9 10,000 9,427 10,000 10,000 10,000 10,000
9/30/96 11,349 13,974 14,714 14,727 14,838 10,809
9/30/97 15,937 16,895 17,670 17,657 18,139 15,070
9/30/98 17,385 15,711 16,011 16,309 16,889 15,292
*Source: Lipper Analytical Services, Inc.
