Dreyfus
Premier Aggressive
Growth Fund
ANNUAL REPORT September 30, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments Year 2000 Issues (Unaudited)
and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
16 Financial Highlights
20 Notes to Financial Statements
26 Report of Independent Auditors
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier Aggressive Growth Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier Aggressive
Growth Fund, covering the 12-month period from October 1, 1998 through September
30, 1999. Inside, you' ll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, Paul LaRocco.
The past year has been rewarding for many equity investors, particularly for
those who own stocks with high earnings growth rates. When the reporting period
began, most sectors of the U.S. stock market had just completed a sharp
correction caused primarily by concerns regarding the spread of the global
financial crisis in overseas markets. Soon after the start of 1999, however,
those fears abated. In fact, the U.S. economy remained strong, characterized by
low inflation and high levels of consumer spending. These conditions supported
continued strength in the stock market through the spring.
In the summer of 1999, however, the Federal Reserve Board raised short-term
interest rates twice in an effort to forestall inflationary pressures in a
fast-growing economy. Because higher interest rates tend to increase the cost of
capital and make fixed-income securities more competitive relative to equities,
most sectors of the stock market declined through the end of the 12-month
reporting period. However, many technology stocks and other high-growth market
sectors were exceptions to this trend, recovering strongly after brief declines
during the summer.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier Aggressive Growth Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 15, 1999
DISCUSSION OF FUND PERFORMANCE
Paul LaRocco, Portfolio Manager
How did Dreyfus Premier Aggressive Growth Fund perform relative to its
benchmark?
For the 12-month period ended September 30, 1999, the fund produced a total
return of 24.86% for Class A shares, 23.68% for Class B shares, 23.94% for Class
C shares, and 24.72% for Class R shares.(1) This compares to a total return of
27.79% for the Standard & Poor's 500 Composite Stock Price Index ("S&P 500"),
19.07% for the Russell 2000 Index, and 19.45% for the Russell Midcap Index.(2)
The primary reason for the fund's underperformance relative to the S&P 500 was
our emphasis on mid- and small-cap stocks during a period in which large-cap
stocks led the market. However, the fund did outperform the mid- and small-cap
indices for the reporting period. The fund's total returns were produced with a
fair bit of volatility within each quarter. The fund's positive total returns
were generated in the first and third fiscal quarters, while the second and
fourth quarters witnessed negative total returns.
Also impacting performance was the fact that over the past year the fund has
completed a transition from its emphasis on the lower end of the small-cap
spectrum to a broader focus on both small- and mid-cap growth companies. While
we believe this broader focus will better position the fund over the long term,
the restructuring period dampened our overall performance.
What is the fund's investment approach?
The fund seeks capital appreciation by investing in the stocks of growth
companies of any size. In choosing stocks, the fund uses a "bottom-up" approach
that emphasizes individual stock selection over economic and industry trends. In
particular, the fund looks for companies with strong management, innovative
products and services, superior industry positions and the potential for strong
earnings growth rates. Further, the fund's investments in small- and mid-cap
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
companies carry additional risks because their earnings are less predictable,
their share prices more volatile and their securities less liquid than those of
larger companies.
While the fund looks for companies with the potential for strong earnings growth
rates, some of the fund's investments currently may be experiencing losses.
What other factors influenced the fund's performance?
At the beginning of the 12-month reporting period, the portfolio reported robust
gains, primarily due to the strength of the U.S. stock market in light of the
problems experienced by many overseas markets. In the fund's second fiscal
quarter, however, market sentiment reverted back to its previous stance,
demonstrating its preference for large-cap growth companies. As a result, our
performance suffered. However, in April, market sentiment began to shift away
its long-perceived preference for domestic large-cap growth stocks to include a
broader group of companies, including small- and mid-cap names. In this
environment, many of the stocks in our portfolio provided significant gains
By the fund's fourth fiscal quarter, fears of continued interest rate hikes by
the Federal Reserve led to declines in the U.S. market as well as the fund.
What is the fund's current strategy?
The fund was overweight in the technology sector, which proved to be beneficial.
In particular, two of our electronics manufacturing holdings, Jabil Circuit and
Sanmina, were profitable. Both of these companies benefited from the outsourcing
of manufacturing activities by the large global telecommunications equipment
makers. In addition, our holdings in SDL, a semiconductor manufacturer, and
Citrix Systems, a software maker, helped boost performance.
We were also pleased with many of our specialty retail holdings, particularly
Williams-Sonoma, a company that markets high-end cookware and household items.
The stock has performed well, primarily
because of the company's decision to expand its services to include sales over
the Internet. American Eagle Outfitters, a clothing outfitter that specializes
in teen fashions, has also performed well during the period, driven by spending
from this fast-growing age group.
On the other hand, a few of our healthcare services companies reported negative
returns, including Renal Care Group and Total Renal Care Holdings, as well as
several generic pharmaceutical companies. This sluggish performance is primarily
attributed to ongoing concerns over Medicare reimbursement issues and rising
cost pressures. In addition, two of the fund's financial stocks suffered during
the period, including FINOVA Group, a nationwide commercial lending company, and
Associates First Capital, a commercial and consumer finance company. We believe
a rising interest-rate environment, coupled with more modest consumer borrowing
patterns, caused these stocks to hold back performance.
Thank you for your continued investment in Dreyfus Premier Aggressive Growth
Fund.
October 15, 1999
(1) 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. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) 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 OF SMALL-CAP STOCK PERFORMANCE. THE RUSSELL MIDCAP INDEX IS A
WIDELY ACCEPTED, UNMANAGED INDEX OF MEDIUM-CAP STOCK MARKET PERFORMANCE.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Premier
Aggressive Growth Fund Class A shares and the Standard & Poor's 500 Composite
Stock Price Index
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
*SOURCE: LIPPER ANALYTICAL SERVICES, INC.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN CLASS A SHARES OF DREYFUS
PREMIER AGGRESSIVE GROWTH FUND ON 6/23/69 (INCEPTION DATE) TO A $10,000
INVESTMENT MADE IN THE STANDARD AND POOR'S 500 COMPOSITE STOCK PRICE INDEX ON
THAT DATE. FOR COMPARATIVE PURPOSES, THE VALUE OF THE INDEX ON 6/30/69 IS USED
AS THE BEGINNING VALUE ON 6/23/69. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
ARE REINVESTED PERFORMANCE FOR CLASS B, CLASS C AND CLASS R SHARES WILL VARY
FROM THE PERFORMANCE OF CLASS A SHARES SHOWN ABOVE DUE TO DIFFERENCES IN CHARGES
AND EXPENSES.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM
INITIAL SALES CHARGE ON CLASS A SHARES AND ALL OTHER APPLICABLE FEES AND
EXPENSES. THE STANDARD AND POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A WIDELY
ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET PERFORMANCE, WHICH DOES NOT TAKE
INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING TO
FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED
IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS
REPORT.
Standard & Poor's 500 Composite Stock Price Index*
Dreyfus Premier Aggressive Growth Fund (Class A shares)
Average Annual Total Returns AS OF 9/30/99
<TABLE>
Inception From
Date 1 Year 5 Years 10 Years Inception
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (5.75%) 6/23/69 17.63% (8.88)% (0.49)% 7.68%
WITHOUT SALES CHARGE 6/23/69 24.86% (7.79)% 0.11% 7.89%
CLASS B SHARES
WITH REDEMPTION* 1/3/96 19.68% -- -- (14.09)%
WITHOUT REDEMPTION 1/3/96 23.68% -- -- (13.39)%
CLASS C SHARES
WITH REDEMPTION** 1/3/96 22.94% -- -- (13.17)%
WITHOUT REDEMPTION 1/3/96 23.94% -- -- (13.17)%
CLASS R SHARES 1/3/96 24.72% -- -- (12.70)%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
</TABLE>
* 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.
The Fund
STATEMENT OF INVESTMENTS September 30, 1999
(STATEMENT OF INVESTMENTS
CONTINUED)
<TABLE>
COMMON STOCKS--82.4% Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE--1.2%
L-3 Communications Holdings 42,150 (a) 1,591,162
APPAREL--1.4%
Pacific Sunwear of California 65,675 (a) 1,840,952
BIOTECHNOLOGY--1.9%
Gilead Sciences 30,550 (a) 1,960,928
Trimeris 36,425 (a) 607,842
2,568,770
BUSINESS SERVICES--8.3%
Affiliated Computer Services, Cl. A 45,600 (a) 1,852,500
Concord EFS 119,475 (a) 2,464,172
Digex 24,475 579,752
MSC Industrial Direct, Cl. A 152,950 (a) 1,405,228
National Information Consortium 43,375 1,070,820
Navigant Consulting 31,275 (a) 1,450,378
USWeb 66,225 (a) 2,272,345
11,095,195
COMPUTER EQUIPMENT--.8%
Newbridge Networks 39,625 (a) 1,032,727
COMPUTER SOFTWARE/SERVICES--11.0%
Citrix Systems 40,500 (a) 2,508,469
Compuware 83,475 (a) 2,175,567
Convergys 79,000 (a) 1,565,187
Electronics for Imaging 14,400 (a) 740,250
Entrust Technologies 44,175 (a) 991,177
Exodus Communications 7,925 (a) 571,095
Peregrine Systems 49,375 (a) 2,012,031
Siebel Systems 14,675 (a) 977,722
Sykes Enterprises 68,400 (a) 1,688,625
Verio 30,525 (a) 946,275
VerticalNet 16,925 (a) 626,225
14,802,623
CONSUMER SERVICES--.5%
Sotheby's Holdings, Cl. A 28,850 744,691
DISTRIBUTION--.9%
Patterson Dental 24,025 (a) 1,190,739
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
ELECTRONICS--3.2%
Celestica 30,775 (a) 1,519,516
Jabil Circuit 37,000 (a) 1,831,500
Sanmina 12,975 (a) 1,003,941
4,354,957
ENVIRONMENTAL SERVICES--1.8%
Republic Services, Cl. A 221,325 (a) 2,406,909
FINANCIAL SERVICES--1.9%
Metris Cos. 88,400 2,602,275
FOOD & BEVERAGES--.8%
Keebler Foods 38,400 (a) 1,147,200
HEALTHCARE SERVICES--2.8%
ChiRex 86,604 (a) 2,235,466
Renal Care Group 67,850 (a) 1,486,339
3,721,805
INSURANCE--.6%
XL Capital, Cl. A 17,675 795,375
LEISURE & ENTERTAINMENT--5.6%
Fairfield Communities 109,950 (a) 1,202,578
Harrah's Entertainment 75,225 (a) 2,087,494
Park Place Entertainment 53,900 (a) 673,750
Royal Caribbean Cruises 36,275 1,632,375
Station Casinos 44,375 (a) 1,031,719
Sunterra 79,250 (a) 941,094
7,569,010
MANUFACTURING--2.8%
Astec Industries 30,650 (a) 739,431
Tyco International 14,850 1,533,262
Zomax 58,800 (a) 1,521,450
3,794,143
MEDICAL SUPPLIES & EQUIPMENT--1.1%
Sybron International 54,000 (a) 1,451,250
OIL & GAS--2.1%
Hanover Compressor 31,700 (a) 1,008,456
Weatherford International 57,375 (a) 1,836,000
2,844,456
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
OIL SERVICES--3.4%
BJ Services 63,550 (a) 2,021,684
Baker Hughes 45,275 1,312,975
Nabors Industries 47,775 (a) 1,194,375
4,529,034
PHARMACEUTICALS--1.0%
Alpharma, Cl. A 36,575 1,291,555
PUBLISHING & BROADCASTING--.8%
EchoStar Communications 11,750 (a) 1,067,047
RESTAURANTS--2.3%
Outback Steakhouse 50,075 (a) 1,275,348
Papa John's International 45,100 (a) 1,860,375
3,135,723
RETAIL--9.4%
American Eagle Outfitters 30,750 (a) 1,489,453
Cheap Tickets 10,825 350,459
Dollar Tree Stores 38,250 (a) 1,527,609
Fastenal 28,200 (a) 1,328,925
Intellicell (Warrants) 102,500 (a) -
Michaels Stores 49,625 (a) 1,463,938
TJX Companies 40,825 1,145,651
Tandy 14,700 759,806
United Rentals 47,375 (a) 1,030,406
Williams-Sonoma 45,600 (a) 2,214,450
Yankee Candle 68,975 1,332,080
12,642,777
SEMICONDUCTORS & EQUIPMENT--9.0%
ASM Lithography Holding 10,300 (a) 690,744
American Xtal Technology 23,750 (a) 507,656
Atmel 24,375 (a) 824,180
Brooks Automation 65,525 (a) 1,150,783
Flextronics International 28,025 (a) 1,630,705
JDS Uniphase 17,350 (a) 1,974,647
Lam Research 27,825 (a) 1,697,325
Maxim Integrated Products 10,850 (a) 684,567
Novellus Systems 9,725 (a) 655,830
SDL 12,875 (a) 982,523
COMMON STOCKS (CONTINUED) Shares Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & EQUIPMENT (CONTINUED)
Teradyne 36,450 (a) 1,284,863
12,083,823
TELECOMMUNICATION EQUIPMENT--2.6%
ANTEC 31,675 (a) 1,682,734
CIENA 48,225 (a) 1,760,212
3,442,946
TELECOMMUNICATION SERVICES--3.4%
Allegiance Telecom 17,700 (a) 931,463
McLeodUSA, Cl. A 35,300 (a) 1,502,456
Time Warner Telecom, Cl. A 22,500 469,688
WinStar Communications 42,025 (a) 1,641,602
4,545,209
UTILITIES--1.8%
Montana Power 37,000 1,126,188
Potomac Electric Power 49,875 1,268,695
2,394,883
TOTAL COMMON STOCKS
(cost $98,490,011) 110,687,236
- ---------------------------------------------------------------------------------------------------------------------------------
Principal
CONVERTIBLE NOTES--.6% Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS;
Sanmina, Sub. Notes,
4.25%, 2004
(cost $709,000) 709,000 (b) 792,308
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--7.4%
- ---------------------------------------------------------------------------------------------------------------------------------
AGENCY DISCOUNT NOTES;
Federal Home Loan Banks,
5.17%, 10/1/99
(cost $9,875,000) 9,875,000 9,875,000
TOTAL INVESTMENTS (cost $109,074,011) 90.4% 121,354,544
CASH AND RECEIVABLES (NET) 9.6% 12,937,908
NET ASSETS 100.0% 134,292,452
</TABLE>
(A) NON-INCOME PRODUCING.
(B) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT SEPTEMBER 30, 1999, THIS SECURITY
AMOUNTED TO $792,308 OR APPROXIMATELY .6% OF NET ASSETS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 109,074,011 121,354,544
Cash 13,539,243
Receivable for investment securities sold 910,117
Dividends and interest receivable 21,103
Prepaid expenses 13,811
135,838,818
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 115,288
Due to Distributor 27,369
Payable for investment securities purchased 1,215,331
Payable for shares of Common Stock redeemed 77,888
Accrued expenses 110,490
1,546,366
- --------------------------------------------------------------------------------
NET ASSETS ($) 134,292,452
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 223,706,597
Accumulated net realized gain (loss) on investments (101,694,678)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 12,280,533
- --------------------------------------------------------------------------------
NET ASSETS ($) 134,292,452
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 134,026,667 166,432 78,604 20,749
Shares Outstanding 14,990,518 19,189 8,988 2,324
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 8.94 8.67 8.75 8.93
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended September 30, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 470,511
Cash dividends (net of $2,046 foreign taxes withheld at source) 195,720
TOTAL INCOME 666,231
EXPENSES:
Management fee--Note 3(a) 978,698
Shareholder servicing costs--Note 3(c) 638,503
Professional fees 66,944
Prospectus and shareholders' reports 50,824
Directors' fees and expenses--Note 3(d) 44,027
Registration fees 35,763
Custodian fees--Note 3(c) 26,023
Distribution fees--Note 3(b) 1,515
Interest expense--Note 2 711
Miscellaneous 433
TOTAL EXPENSES 1,843,441
INVESTMENT (LOSS) (1,177,210)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments:
Unaffiliated issuers (36,466,357)
Affiliated issuers--Note 1(d) (6,390,118)
NET REALIZED GAIN (LOSS) (42,856,475)
Net unrealized appreciation (depreciation) on investments:
Unaffiliated issuers 74,778,192
Affiliated issuers--Note 1(d) (319,303)
NET UNREALIZED APPRECIATION (DEPRECIATION) 74,458,889
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 31,602,414
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 30,425,204
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended September 30,
---------------------------------
1999 1998
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (1,177,210) (2,638,304)
Net realized gain (loss) on investments (42,856,475) (54,972,290)
Net unrealized appreciation (depreciation)
on investments 74,458,889 (124,315,957)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 30,425,204 (181,926,551)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares 430,006,751 340,176,835
Class B shares 248,030 89,530
Class C shares 70,596 29,895
Class R shares 12,535 7,812
Cost of shares redeemed:
Class A shares (447,139,797) (443,227,993)
Class B shares (216,349) (133,256)
Class C shares (17,414) --
Class R shares (2,299) (3,988)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (17,037,947) (103,061,165)
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,387,257 (284,987,716)
- --------------------------------------------------------------------------------
NET ASSETS ($)
Beginning of Period 120,905,195 405,892,911
END OF PERIOD 134,292,452 120,905,195
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended September 30,
--------------------------------
1999 1998
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A
Shares sold 50,297,987 28,800,679
Shares redeemed (52,184,629) (37,362,516)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,886,642) (8,561,837)
- --------------------------------------------------------------------------------
CLASS B
Shares sold 32,602 6,745
Shares redeemed (26,803) (10,904)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 5,799 (4,159)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 8,244 2,699
Shares redeemed (2,080) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 6,164 2,699
- --------------------------------------------------------------------------------
CLASS R
Shares sold 1,352 618
Shares redeemed (282) (322)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,070 296
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Year Ended September 30,
--------------------------------------------
CLASS A SHARES 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 7.16 15.94 14.81 16.31 15.35
Investment Operations:
Investment income (loss)--net (.08)( a) (.12)( a) (.33) (.12) .40
Net realized and unrealized gain (loss)
on investments 1.86 (8.66) 1.46 .01 1.23
Total from Investment Operations 1.78 (8.78) 1.13 (.11) 1.63
Distributions:
Dividends from investment income--net -- -- -- (.28) (.44)
Dividends from net realized gain
on investments -- -- -- (1.11) (.23)
Total Distributions -- -- -- (1.39) (.67)
Net asset value, end of period 8.94 7.16 15.94 14.81 16.31
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) 24.86 (55.08) 7.63 (.71) 11.21
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets 1.41 1.24 1.20 1.11 1.03
Ratio of interest expense, loan commitment
fees and dividends on securities sold short
to average net assets .00(c) .19 .47 .39 .08
Ratio of net investment income (loss)
to average net assets (.90) (1.04) 1.44 (.66) 2.55
Portfolio Turnover Rate 165.12 106.58 76.28 131.43 298.60
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 134,027 120,782 405,599 480,638 572,077
</TABLE>
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) EXCLUSIVE OF SALES CHARGE.
(C) AMOUNT REPRESENT LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
Year Ended September 30,
-----------------------------------------
CLASS B SHARES 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 7.01 15.74 14.73 14.84
Investment Operations:
Investment (loss)--net (.15)( b) (.22)( b) (.22) (.10)
Net realized and unrealized gain (loss)
on investments 1.81 (8.51) 1.23 (.01)
Total from Investment Operations 1.66 (8.73) 1.01 (.11)
Net asset value, end of period 8.67 7.01 15.74 14.73
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 23.68 (55.46) 6.86 (.74)(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets 2.31 2.09 1.95 1.47(d)
Ratio of interest expense and
loan committment fees
to average net assets .00(e) .19 .43 .49(d)
Ratio of net investment (loss)
to average net assets (1.81) (1.89) (2.22) (1.40)(d)
Portfolio Turnover Rate 165.12 106.58 76.28 131.43
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 166 94 276 13
(A) FROM JANUARY 3, 1996 (COMMENCEMENT OF INITIAL OFFERING) TO SEPTEMBER 30,
1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
(E) AMOUNT REPRESENT LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Year Ended September 30,
-----------------------------------------
CLASS C SHARES 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 7.06 15.76 14.83 14.84
Investment Operations:
Investment (loss)--net (b) (.15) (.18) (.37) (.24)
Net realized and unrealized gain (loss)
on investments 1.84 (8.52) 1.30 .23
Total from Investment Operations 1.69 (8.70) .93 (.01)
Net asset value, end of period 8.75 7.06 15.76 14.83
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) 23.94 (55.20) 6.27 (.07)(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets 2.25 2.39 1.99 1.42(d)
Ratio of interest expense and
loan commitment fees
to average net assets .00(e) .07 .53 .47(d)
Ratio of net investment (loss)
to average net assets (1.70) (1.90) (2.37) (1.32)(d)
Portfolio Turnover Rate 165.12 106.58 76.28 131.43
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 79 20 2 1
(A) FROM JANUARY 3, 1996 (COMMENCEMENT OF INITIAL OFFERING) TO SEPTEMBER 30,
1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
(E) AMOUNT REPRESENT LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended September 30,
-----------------------------------------
CLASS R SHARES 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 7.16 16.02 14.84 14.84
Investment Operations:
Investment (loss)--net (.10)(b) (.15)(b) (.10) (.02)
Net realized and unrealized gain (loss)
on investments 1.87 (8.71) 1.28 .02
Total from Investment Operations 1.77 (8.86) 1.18 --
Net asset value, end of period 8.93 7.16 16.02 14.84
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 24.72 (55.31) 7.95 --
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets 1.70 1.57 .76 .73(c)
Ratio of interest expense and loan commitment
to average net assets .00(d) .16 .30 .35(c)
Ratio of net investment (loss)
to average net assets (1.16) (1.30) (.90) (.56)(c)
Portfolio Turnover Rate 165.12 106.58 76.28 131.43
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 21 9 15 5
(A) FROM JANUARY 3, 1996 (COMMENCEMENT OF INITIAL OFFERING) TO SEPTEMBER 30, 1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
(D) AMOUNT REPRESENT LESS THAN .01%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Aggressive Growth Fund (the "fund") is a separate diversified
series of Dreyfus Premier Equity Fund' s, 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 capital growth. 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 series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series 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 and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the fund received net
earnings credits of $330 during the period ended September 30, 1999 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
The Fund
NOTES TO FINANCIAL STATEMENTS (continued)
(d) Affiliated issuers: Issuers in which the fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act. The
following summarizes affiliated issuers during the period ended September 30,
1999:
<TABLE>
Shares
---------------------------------------------------------------
Market
Name of Beginning Purchases Sales/ End of Dividend Value
issuer of Period Increases Decreases Period Income 9/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CCA Cos. 673,325 ------ 673,325 ------ ------ ------
HemaCare 530,500 ------ 530,500 ------ ------ ------
ONCOR 1,907,825 ------ 1,907,825 ------ ------ ------
OnGard
Systems 570,000 ------ 570,000 ------ ------ ------
STELAX
Industries 2,229,950 ----- 2,229,950 ------ ------ ------
</TABLE>
(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain, if any, 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, it is the policy of the fund not to distribute such gain.
(f) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $88,629,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 1999. The
amount is calculated based on Federal income tax regulations which may differ
from financial reporting in
accordance with generally accepted accounting principles. If not applied,
$2,409,000 of the carryover expires in fiscal 2004 and $86,220,000 expires in
fiscal 2007.
During the period ended September 30, 1999, the fund reclassified $1,177,210
from accumulated investment loss to paid-in capital. Net assets were not
affected by this reclassification.
NOTE 2--Bank Lines of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings.
The average daily amount of borrowings outstanding during the period ended
September 30, 1999 was approximately $15,300, with a related weighted average
annualized interest rate of 4.63%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .75 of 1% of the value of the
fund' s average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses allocable to Class A,
exclusive of taxes, interest on borrowings (which, in the view of Stroock &
Stroock & Lavan LLP, counsel to the fund, also includes loan commitment fees and
dividends on securities sold short), brokerage commissions and extraordinary
expenses, exceed 11_2% of the average value of Class A net assets, the fund may
deduct from payments to be made to the Manager, or the Manager will bear such
excess expense. No expense reimbursement was required for the period ended
September 30, 1999 pursuant to the Agreement.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$7,737 during the period ended September 30, 1999 from commissions earned on
sales of fund shares.
The Fund
NOTES TO FINANCIAL STATEMENTS (continued)
(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. During the period ended September 30,
1999, Class B and Class C shares were charged $1,124 and $391, 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, 1999, Class A, Class B and Class C
shares were charged $325,695, $375 and $130, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended September 30, 1999, the fund was charged $241,764 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, 1999, the fund was
charged $26,023 pursuant to the custody agreement.
(d) Each director who is not an "affiliated person" as defined in the Act
receives from the Company an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The following summarizes the aggregate amount of purchases and sales of
investment securities, excluding short-term securities, during the period ended
September 30, 1999:
Purchases ($) Sales ($)
- --------------------------------------------------------------------------------
Unaffiliated 200,047,999 237,235,880
Affiliated -- 269,289
TOTAL 200,047,999 237,505,169
At September 30, 1999, accumulated net unrealized appreciation on investments
was $12,280,533, consisting of $17,646,150 gross unrealized appreciation and
$5,365,617 gross unrealized depreciation.
At September 30, 1999, 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).
The Fund
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Premier Aggressive Growth Fund
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier Aggressive Growth Fund (one of
the series constituting Dreyfus Premier Equity Funds, Inc.) as of September 30,
1999, 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, 1999 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 Aggressive Growth Fund at September 30, 1999, 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 4, 1999
NOTES
For More Information
Dreyfus Premier Aggressive Growth Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 009AR999
Dreyfus
Premier Growth and Income Fund
ANNUAL REPORT September 30, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments Year 2000 Issues (Unaudited)
and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
21 Notes to Financial Statements
28 Report of Independent Auditors
29 Important Tax Information
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Growth and Income Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier Growth and
Income Fund, covering the 12-month period from October 1, 1998 through September
30, 1999. Inside, you' ll find valuable information about how the fund was
managed during the reporting period, including a discussion with the fund's
portfolio manager, Douglas Ramos, CFA.
The past 12 months have been highly volatile for stocks and bonds, which began
the reporting period in the wake of a sharp correction caused primarily by the
spread of the global financial crisis in overseas markets. The Federal Reserve
Board responded to the crisis last fall by reducing short-term interest rates.
Its strategy apparently was effective, and the U.S. economy remained strong
through the remainder of the reporting period.
Because inflation is more likely to rise in a strong economy, the bond market
generally declined during the first nine months of 1999. To forestall a rise of
inflation, the Federal Reserve Board raised short-term interest rates twice
during the summer of 1999, effectively reversing most of last fall' s
interest-rate cuts.
Despite weakness in the U.S. stock market toward the end of the reporting
period, these economic conditions generally supported stock prices throughout
the year. Technology stocks and other stocks with high growth rates provided the
highest overall returns, while value-oriented stocks generally lagged the market
averages.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier Growth and Income Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 15, 1999
DISCUSSION OF FUND PERFORMANCE
Douglas Ramos, CFA, Portfolio Manager
How did Dreyfus Premier Growth and Income Fund perform relative to its
benchmark?
For the 12-month period ended September 30, 1999, Dreyfus Premier Growth and
Income Fund produced the following total returns: Class A shares, 21.22%; Class
B shares, 20.26% ; Class C shares, 20.29%; and Class R shares, 21.34%.(1) This
compares with returns provided by the fund's benchmark, the Standard & Poor's
500 Composite Stock Price Index ("S&P 500 Index"), which produced a total return
of 27.79% for the same period.(2)
The fund' s 12-month total returns were produced with considerable volatility
within each quarter. Much like the general direction of the S&P 500 itself, the
fund's positive total returns were generated in the first three fiscal quarters,
while the fourth fiscal quarter witnessed negative total returns.
What is the fund's investment approach?
The fund invests primarily in low- and moderately priced stocks with market
capitalizations of $1 billion or more at the time of purchase. We use
fundamental analysis to create a broadly diversified, value-tilted portfolio
with a weighted average P/E ratio less than that of the S&P 500, and a long-term
projected earnings growth greater than that of the S&P 500.
We gauge a stock's relative value primarily by looking at its price in relation
to the company's business prospects and intrinsic worth, as measured by a wide
range of financial and business data. By examining each company's fundamentals,
together with economic and industry trends, we typically look for companies with
strong positions in their industries that have the potential for something
positive to happen.
What other factors influenced the fund's performance?
Many of the factors that held back the fund's performance during most of fiscal
year 1998 reversed themselves during this fiscal year, contributing to the
fund's overall returns. Responding to the financial crisis of last
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
fall, the Federal Reserve Board lowered interest rates and injected liquidity
into the financial system, bringing about a recovery in equity prices in October
and contributing to the fund' s positive returns for the first quarter.
Additionally, in April market sentiment began to shift away from domestic
large-cap growth stocks to include a broader group of companies, including
small- and mid-cap names. In this environment, many of the stocks in our
portfolio provided significant gains. However, by August, the market began to
narrow again, returning to the favored large-cap growth names, particularly
technology names, that have driven the S&P 500 Index for the past several years.
While the U.S. economy has continued to exhibit strong growth, many overseas
economies began to show signs of improvement from last year's economic troubles.
As these economies began to stabilize, export sales began to improve, which in
turn created many favorable investment opportunities for many large- and mid-cap
stocks, some of which were part of the portfolio.
What is the fund's current strategy?
We have continued to focus on the technology sector, a strategy that has proven
beneficial for the fund. In fact, the technology area represents the single
largest positive contributor to fund performance for the 12-month period.
Examples of winners in this area include International Business Machines,
Lexmark International Group, Cl. A, Sun Microsystems and Texas Instruments. The
fund also profited from its security selection strategy, especially in the
financial services sector where we enjoyed strong performance from companies
such as Citigroup, Chase Manhattan, Federal Home Loan Mortgage ("Freddie Mac")
and BankBoston. The third largest contributor to positive performance came from
the fund' s consumer cyclicals sector, where Carnival, General Motors and
retailers Dayton Hudson and May Department Stores drove performance.
On the other hand, the stocks of food retailers Kroger and Albertson's
disappointed during the period, primarily due to competitive concerns within the
industry. Lyondell Chemical, one of the fund's basic materials holdings, also
held back performance as did Texas Utilities and Duke Energy, two of our
utilities holdings.
During the second half of the reporting period, we took our cue from the
changing economic environment by allocating some assets away from financial and
consumer-based companies into basic industrial sectors. Specifically, we reduced
our holdings in Morgan Stanley, Dean Witter, Ford Motor and Dayton Hudson. In
their place, we added to our positions companies such as International Paper and
Dow Chemical. All of these moves were beneficial for the fund.
During the period, we began to adjust our investment strategy in an effort to
give the fund added flexibility. We broadened our stock selection strategy to
include companies that we consider moderately valued relative to the benchmark.
In the past, our investment discipline often led us to avoid moderately valued
stocks with excellent growth potential, or to sell a stock relatively early in
its growth cycle, causing the fund to miss out on subsequent appreciation. We
believe our broader valuation criteria can better position the fund to meet its
goals of providing investors with long-term capital growth, current income and
growth of income consistent with reasonable investment risk. We generally strive
to remain close to fully invested.
October 15, 1999
(1) 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. HAD THESE
CHANGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) 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 Fund
FUND PERFORMANCE
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 and the Standard & Poor's 500 Composite Stock Price Index
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
*SOURCE: LIPPER ANALYTICAL SERVICES, INC.
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 $10,000 INVESTMENT MADE ON THAT DATE IN THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ALL DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS ARE REINVESTED.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM
INITIAL SALES CHARGE ON CLASS A SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES
CHARGE ON CLASS B AND CLASS C SHARES, AND ALL OTHER APPLICABLE FEES AND EXPENSES
ON ALL CLASSES. THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A
WIDELY ACCEPTED, UNMANAGED INDEX OF OVERALL STOCK MARKET PERFORMANCE. THE INDEX
DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION
RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE,
IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE
IN THIS REPORT.
Average Annual Total Returns AS OF 9/30/99
<TABLE>
Inception From
Date 1 Year Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (5.75%) 12/29/95 14.26% 18.69%
WITHOUT SALES CHARGE 12/29/95 21.22% 20.57%
CLASS B SHARES
WITH REDEMPTION(*) 12/29/95 16.26% 19.13%
WITHOUT REDEMPTION 12/29/95 20.26% 19.62%
CLASS C SHARES
WITH REDEMPTION(**) 12/29/95 19.29% 19.63%
WITHOUT REDEMPTION 12/29/95 20.29% 19.63%
CLASS R SHARES 12/29/95 21.34% 21.03%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
(*) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 4% AND
IS REDUCED TO 0% AFTER SIX YEARS.
(**) THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS C SHARES IS 1% FOR
SHARES REDEEMED WITHIN ONE YEAR OF THE DATE OF PURCHASE.
The Fund
STATEMENT OF INVESTMENTS CONTINUED)
STATEMENT OF INVESTMENTS
September 30, 1999
<TABLE>
COMMON STOCKS--99.5% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL SERVICES-1.5%
McGraw-Hill Cos. 11,200 541,800
Outdoor Systems 7,000 (a) 250,250
Valassis Communications 13,500 (a) 593,156
1,385,206
CONSUMER DURABLES-2.1%
Black & Decker 14,300 653,331
Ford Motor 9,700 486,819
General Motors 3,000 188,813
Leggett & Platt 24,800 488,250
Newell Rubbermaid 5,300 151,381
1,968,594
CONSUMER NON-DURABLES-4.3%
Anheuser-Busch Cos. 7,000 490,437
Clorox 11,000 420,750
Heinz (H.J.) 9,000 387,000
Kimberly-Clark 11,000 577,500
PepsiCo 44,500 1,346,125
Philip Morris Cos. 20,900 714,519
3,936,331
CONSUMER SERVICES-7.0%
Adelphia Communications, Cl. A 800 (a) 47,050
American Tower, Cl. A 23,600 461,675
CBS 14,000 (a) 647,500
Carnival 25,200 1,096,200
Cendant 86,800 (a) 1,540,700
Gannett 14,000 968,625
McDonald's 25,000 1,075,000
Time Warner 10,200 619,650
6,456,400
ELECTRONIC TECHNOLOGY-15.4%
Apple Computer 3,400 (a) 215,263
Applied Materials 8,000 (a) 623,000
Cabletron Systems 15,500 (a) 243,156
Compaq Computer 13,000 298,188
Computer Sciences 13,600 (a) 956,250
Ericsson (LM) Telephone, Cl. B, A.D.R. 27,000 843,750
General Dynamics 6,000 374,625
Hewlett-Packard 8,300 763,600
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY (CONTINUED)
Intel 27,100 2,013,869
International Business Machines 16,000 1,942,000
LSI Logic 5,000 (a) 257,500
Lexmark International Group, Cl. A 11,100 (a) 893,550
Motorola 9,000 792,000
NCR 11,000 (a) 363,687
National Semiconductor 9,000 (a) 274,500
Nortel Networks 16,000 816,000
Sun Microsystems 3,000 (a) 279,000
Teradyne 15,000 (a) 528,750
Texas Instruments 9,000 740,250
United Technologies 15,000 889,687
14,108,625
ENERGY MINERALS-5.9%
Burlington Resources 4,000 147,000
Conoco, Cl. A 19,000 527,250
Exxon 12,500 949,219
Mobil 5,000 503,750
Royal Dutch Petroleum, A.D.R. 30,000 1,771,875
Texaco 16,600 1,047,875
USX-Marathon Group 15,000 438,750
5,385,719
FINANCE-15.1%
American Express 3,800 511,575
American General 6,300 398,081
American International Group 13,651 1,186,806
Associates First Capital, Cl. A 16,000 576,000
Bank One 9,000 313,313
BankAmerica 22,200 1,236,262
BankBoston 11,000 477,125
CIGNA 8,600 668,650
Chase Manhattan 16,000 1,206,000
Citigroup 38,050 1,674,200
Federal Home Loan Mortgage 12,400 644,800
Federal National Mortgage Association 22,800 1,429,275
Fleet Financial Group 16,000 586,000
Household International 8,400 337,050
Morgan (J.P.) 4,000 457,000
</TABLE>
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
FINANCE (CONTINUED)
Morgan Stanley, Dean Witter 10,300 918,631
Wells Fargo 24,000 951,000
XL Capital, Cl. A 6,000 270,000
13,841,768
HEALTH SERVICES-2.7%
Columbia / HCA Healthcare 63,400 1,343,288
Wellpoint Health Networks 20,300 (a) 1,157,100
2,500,388
HEALTH TECHNOLOGY-6.0%
Bristol-Myers-Squibb 15,000 1,012,500
Johnson & Johnson 12,000 1,102,500
Lilly (Eli) 21,500 1,376,000
Merck & Co. 17,500 1,134,219
Pharmacia & Upjohn 13,400 664,975
Warner-Lambert 4,000 265,500
5,555,694
INDUSTRIAL SERVICES-1.8%
Baker Hughes 19,600 568,400
Schlumberger 17,000 1,059,312
1,627,712
NON-ENERGY MINERALS-.4%
Alcoa 4,000 248,250
Weyerhaeuser 2,100 121,012
369,262
PROCESS INDUSTRIES-1.9%
Dow Chemical 4,000 454,500
duPont (E.I.) deNemours 5,000 304,375
International Paper 10,000 480,625
Rohm & Haas 13,900 502,138
1,741,638
PRODUCER MANUFACTURING-11.0%
AlliedSignal 20,000 1,198,750
Emerson Electric 8,000 505,500
General Electric 29,400 3,485,737
Honeywell 9,000 1,001,813
Ingersoll-Rand 6,000 329,625
Masco 30,300 939,300
Tyco International 20,000 2,065,000
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
PRODUCER MANUFACTURING (CONTINUED)
Xerox 14,000 587,125
10,112,850
RETAIL TRADE-5.9%
Albertson's 10,939 432,774
Dayton Hudson 24,000 1,441,500
Federated Department Stores 10,300 (a) 449,981
Kroger 28,000 (a) 617,750
Lowe's 10,600 516,750
May Department Stores 16,950 617,616
Safeway 9,800 (a) 373,013
TJX Cos. 34,500 968,156
5,417,540
TECHNOLOGY SERVICES-6.1%
BMC Software 7,100 (a) 508,094
Computer Associates International 26,000 1,592,500
Compuware 22,800 (a) 594,225
Electronic Data Systems 20,000 1,058,750
Network Associates 17,000 (a) 325,125
Oracle 18,000 (a) 819,000
Synopsys 12,300 (a) 690,722
5,588,416
TRANSPORTATION-.4%
AMR 6,000 (a) 327,000
UTILITIES-12.0%
AT&T 29,500 1,283,250
Bell Atlantic 20,000 1,346,250
Coastal 29,500 1,207,656
El Paso Energy Corp 5,700 226,931
Enron 12,000 495,000
GTE 24,000 1,845,000
MCI WorldCom 22,600 (a) 1,624,375
Niagara Mohawk 7,000 (a) 108,063
SBC Communications 30,000 1,531,875
Sprint (FON Group) 20,800 1,128,400
Texas Utilities 7,000 261,187
11,057,987
TOTAL COMMON STOCKS
(cost $80,880,353) 91,381,130
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
SHORT-TERM INVESTMENTS--.2% Amount ($) Value ($)
- --------------------------------------------------------------------------------
U.S. TREASURY BILLS:
4.54%,12/16/1999
(cost $215,913) 218,000 215,892
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $81,096,266) 99.7% 91,597,022
CASH AND RECEIVABLES (NET) .3% 233,754
NET ASSETS 100.0% 91,830,776
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 81,096,266 91,597,022
Cash 48,924
Receivable for investment securities sold 1,998,388
Dividends receivable 107,928
Receivable for shares of Common Stock subscribed 10,494
Prepaid expenses 10,333
93,773,089
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 79,322
Due to Distributor 57,877
Payable for investment securities purchased 1,671,001
Payable for shares of Common Stock redeemed 96,562
Accrued expenses 37,551
1,942,313
- --------------------------------------------------------------------------------
NET ASSETS ($) 91,830,776
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 73,878,003
Accumulated net realized gain (loss) on investments 7,452,017
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4(b) 10,500,756
- --------------------------------------------------------------------------------
NET ASSETS ($) 91,830,776
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C Class R
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 31,481,886 56,832,821 3,214,530 301,539
Shares Outstanding 1,496,508 2,749,057 155,257 14,216
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 21.04 20.67 20.70 21.21
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Year Ended September 30, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $9,655 foreign taxes withheld at source) 1,447,636
Interest 155,595
TOTAL INCOME 1,603,231
EXPENSES:
Management fee--Note 3(a) 750,112
Distribution fees--Note 3(b) 495,526
Shareholder servicing costs--Note 3(c) 389,884
Professional fees 50,896
Registration fees 42,736
Directors' fees and expenses--Note 3(d) 30,823
Custodian fees--Note 3(c) 19,533
Prospectus and shareholders' reports 16,525
Interest expense--Note 2 737
Loan commitment fees--Note 2 486
Miscellaneous 6,298
TOTAL EXPENSES 1,803,556
INVESTMENT (LOSS) (200,325)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments:
Long transactions 7,316,907
Short sale transactions (1,767)
Net realized gain (loss) on financial futures 1,136,845
Net realized gain (loss) on forward currency exchange contracts 38,112
NET REALIZED GAIN (LOSS) 8,490,097
Net unrealized appreciation (depreciation) on investments 10,564,611
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 19,054,708
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 18,854,383
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended September 30,
-----------------------------------
1999 1998
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss)--net (200,325) (17,100)
Net realized gain (loss) on investments 8,490,097 1,604,173
Net unrealized appreciation (depreciation)
on investments 10,564,611 (9,184,986)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 18,854,383 (7,597,913)
- ----------------------------------------------------- --------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (3,173) (103,354)
Class R shares (136) (1,288)
Net realized gain on investments:
Class A shares (62,028) (4,256,479)
Class B shares (118,673) (7,237,792)
Class C shares (6,549) (521,235)
Class R shares (492) (27,101)
TOTAL DIVIDENDS (191,051) (12,147,249)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares 4,691,782 5,975,661
Class B shares 5,471,141 11,287,995
Class C shares 838,908 948,288
Class R shares 86,739 53,341
Dividends reinvested:
Class A shares 59,473 4,018,653
Class B shares 105,597 6,501,854
Class C shares 4,503 326,647
Class R shares 627 28,399
Cost of shares redeemed:
Class A shares (11,473,975) (13,783,908)
Class B shares (19,454,642) (15,779,224)
Class C shares (1,961,486) (2,140,721)
Class R shares (103,735) (27,614)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (21,735,068) (2,590,629)
TOTAL INCREASE (DECREASE) IN NET ASSETS (3,071,736) (22,335,791)
- --------------------------------------------------------------------------------
NET ASSETS ($)
Beginning of Period 94,902,512 117,238,303
END OF PERIOD 91,830,776 94,902,512
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Year Ended September 30,
-----------------------------------
1999 1998
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A
Shares sold 223,976 309,070
Shares issued for dividends reinvested 3,022 218,373
Shares redeemed (560,213) (717,728)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (333,215) (190,285)
- --------------------------------------------------------------------------------
CLASS B
Shares sold 267,228 577,515
Shares issued for dividends reinvested 5,438 355,874
Shares redeemed (957,634) (824,107)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (684,968) 109,282
- --------------------------------------------------------------------------------
CLASS C
Shares sold 40,647 49,565
Shares issued for dividends reinvested 231 17,869
Shares redeemed (98,456) (110,512)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (57,578) (43,078)
- --------------------------------------------------------------------------------
CLASS R
Shares sold 3,998 2,717
Shares issued for dividends reinvested 31 1,531
Shares redeemed (4,953) (1,383)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (924) 2,865
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions.These
figures have been derived from the fund's financial statements.
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
Year Ended September 30,
------------------------------------------
CLASS A SHARES 1999 1998 1997 1996(a)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 17.39 20.94 18.45 12.50
Investment Operations:
Investment income--net .06(b) .10 .24 .10
Net realized and unrealized gain (loss)
on investments 3.63 (1.44) 3.39 5.94
Total from Investment Operations 3.69 (1.34) 3.63 6.04
Distributions:
Dividends from investment income-net (.00)(c) (.05) (.25) (.09)
Dividends from net realized gain on investments (.04) (2.16) (.89) --
Total Distributions (.04) (2.21) (1.14) (.09)
Net asset value, end of period 21.04 17.39 20.94 18.45
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (D) 21.22 (7.00) 20.90 48.24(e)
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.31 1.25 1.24 .94(e)
Ratio of net investment income (loss)
to average net assets .29 .47 1.27 .92(e)
Decrease reflected in above expense ratios
due to undertaking by the Manager -- .01 .11 .30(e)
Portfolio Turnover Rate 102.85 133.00 265.33 205.64(e)
- --------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 31,482 31,824 42,309 30,330
(A) FROM DECEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) AMOUNT REPRESENTS LESS THAN $.01.
(D) EXCLUSIVE OF SALES CHARGE.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Year Ended September 30,
-----------------------------------------
CLASS B SHARES 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.22 20.85 18.37 12.50
Investment Operations:
Investment income (loss)--net (.09)(b) (.06) .10 .03
Net realized and unrealized gain (loss)
on investments 3.58 (1.41) 3.38 5.87
Total from Investment Operations 3.49 (1.47) 3.48 5.90
Distributions:
Dividends from investment income--net -- -- (.11) (.03)
Dividends from net realized gain on investments (.04) (2.16) (.89) --
Total Distributions (.04) (2.16) (1.00) (.03)
Net asset value, end of period 20.67 17.22 20.85 18.37
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 20.26 (7.69) 20.08 47.14(d)
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 2.06 2.00 2.00 1.52(d)
Ratio of net investment income (loss)
to average net assets (.45) (.28) .50 .34(d)
Decrease reflected in above expense ratios
due to undertaking by the Manager -- .01 .11 .30(d)
Portfolio Turnover Rate 102.85 133.00 265.33 205.64(d)
- ------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 56,833 59,144 69,330 37,534
(A) FROM DECEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended September 30,
-----------------------------------------
CLASS C SHARES 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.24 20.87 18.40 12.50
Investment Operations:
Investment income (loss)--net (.08)(b) (.06) .09 .03
Net realized and unrealized gain (loss)
on investments 3.58 (1.41) 3.38 5.88
Total from Investment Operations 3.50 (1.47) 3.47 5.91
Distributions:
Dividends from investment income--net -- -- (.11) (.01)
Dividends from net realized gain on investments (.04) (2.16) (.89) --
Total Distributions (.04) (2.16) (1.00) (.01)
Net asset value, end of period 20.70 17.24 20.87 18.40
- -----------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (C) 20.29 (7.63) 19.89 47.27(d)
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 2.04 1.96 2.00 1.52(d)
Ratio of net investment income (loss)
to average net assets (.43) (.25) .52 .30(d)
Decrease reflected in above expense ratios
due to undertaking by the Manager -- .01 .11 .30(d)
Portfolio Turnover Rate 102.85 133.00 265.33 205.64(d)
- -----------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 3,215 3,670 5,340 2,642
(A) FROM DECEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Year Ended September 30,
------------------------------------------
CLASS R SHARES 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.52 21.11 18.42 12.50
Investment Operations:
Investment income--net .09(b) .07 .20 .43
Net realized and unrealized gain (loss)
on investments 3.65 (1.40) 3.67 5.61
Total from Investment Operations 3.74 (1.33 3.87 6.04
Distributions:
Dividends from investment income--net (.01) (.10) (.29) (.12)
Dividends from net realized gain on investments (.04) (2.16) (.89) --
Total Distributions (.05) (2.26) (1.18) (.12)
Net asset value, end of period 21.21 17.52 21.11 18.42
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 21.34 (6.89) 22.25 48.38(c)
- ------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.17 1.15 .99 .79(c)
Ratio of net investment income
to average net assets .41 .57 1.50 1.01(c)
Decrease reflected in above expense ratios
due to undertaking by the Manager -- .01 .12 .30(c)
Portfolio Turnover Rate 102.85 133.00 265.33 205.64(c)
- -----------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 302 265 259 174
(A) FROM DECEMBER 29, 1995 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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"), which is a wholly-owned subsidiary
of Mellon Financial Corporation.
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 series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series 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.
The Fund
NOTES TO FINANCIAL STATEMENTS) (CONTINUED)
(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.
(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, 1999, the fund reclassed $24,199 from
paid-in capital and $179,435 from accumulated net realized gain (loss) on
investments to accumulated undistributed investment income-net. 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.
The average daily amount of borrowings outstanding during the period ended
September 30, 1999 was approximately $13,150, with a related weighted average
annualized interest rate of 5.60%.
The Fund
NOTES TO FINANCIAL STATEMENTS) (CONTINUED)
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.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$1,659 during the period ended September 30, 1999 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. During the period ended September 30,
1999, Class B and Class C shares were charged $469,228, and $26,298,
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, 1999, Class A, Class B and Class C
shares were charged $84,131, $156,409 and $8,766, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended September 30, 1999, the fund was charged $93,519 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, 1999, the fund was
charged $19,533 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.
(E) During the period ended September 30, 1999, the fund incurred total
brokerage commissions of $231,142, of which $4,240, was paid to Dreyfus
Brokerage Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
(A) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, financial futures and forward currency exchange contracts, during
the period ended September 30, 1999:
Purchases ($) Sales ($)
- --------------------------------------------------------------------------------
Long transactions 98,406,309 111,354,993
Short sale transactions 173,413 171,646
TOTAL 98,579,722 111,526,639
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 permissible
liquid assets sufficient to cover its short position. At September 30, 1999,
there were no securities sold short outstanding.
The Fund
NOTES TO FINANCIAL STATEMENTS) (CONTINUED)
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, 1999, there were no open forward currency exchange
contracts.
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. Typically, 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 September 30, 1999, there were no
financial futures contracts outstanding.
(B) At September 30, 1999, accumulated net unrealized appreciation on
investments was $10,500,756, consisting of $14,333,833 gross unrealized
appreciation and $3,833,077 gross unrealized depreciation.
At September 30, 1999, 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).
The Fund
REPORT OF 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,
1999, 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, 1999 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, 1999, the results of its
operations for the year ended, the changes in its net assets for each of its 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 4, 1999
IMPORTANT TAX INFORMATION (Unaudited)
For Federal tax purposes the fund hereby designates $.008 per share as a
long-term capital gain distribution of $.036 per share paid December 11, 1998
and also designates $.012 per share as a long-term capital gain distribution
paid on March 31, 1999.
The fund hereby designates 99.37% of the ordinary dividends paid during the
fiscal year ended September 30, 1999 as qualifying for the corporate dividends
received deduction. Shareholders will receive notification in January 2000 of
the percentage applicable to the preparation of their 1999 income tax returns.
The Fund
For More Information
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
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 320AR999
Dreyfus
Premier Emerging Markets Fund
ANNUAL REPORT September 30, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments Year 2000 Issues (Unaudited)
and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
16 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier Emerging
Markets Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier Emerging
Markets Fund, covering the 12-month period from October 1, 1998 through
September 30, 1999. Inside, you'll find valuable information about how the fund
was managed during the reporting period, including a discussion with the fund's
portfolio manager, Daniel Beneat.
When the reporting period began, much of the world was in the midst of a global
currency and credit crisis. In response, many of the world's central banks
lowered key short-term interest rates last fall to stimulate economic growth.
This strategy appears to have been effective. Soon after 1999 began, evidence
emerged that less restrictive monetary policies had helped prevent further
economic deterioration in Japan and the emerging markets of Asia, Latin America
and Eastern Europe.
These economic conditions produced particularly good results for emerging market
stocks. Stocks in Southeast Asia began to recover in 1999, showing their first
signs of real strength in over a year. Latin America provided good results after
concerns about Brazil' s currency devaluation abated. Even selected markets in
Eastern Europe performed well, despite ongoing financial problems in Russia.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier Emerging Markets Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 15, 1999
DISCUSSION OF FUND PERFORMANCE
Daniel Beneat, Portfolio Manager
How did Dreyfus Premier Emerging Markets Fund perform relative to its benchmark
For the 12-month period ended September 30, 1999, Dreyfus Premier Emerging
Markets Fund produced the following total returns: Class A shares, 63.71%; Class
B shares, 62.29% ; Class C shares, 62.59%; and Class R shares, 64.01%.(1) This
compares with the 56.55% total return provided by the Morgan Stanley Capital
International Emerging Markets Free Index (MSCI/EMF) for the same period.(2)
For the 3-month period ended September 30, 1999, Dreyfus Premier Emerging
Markets Fund produced the following total returns: Class A shares, -1.59%; Class
B shares, -1.85% ; Class C shares, -1.77%; and Class R shares, -1.59%.(1) This
compares with the -5.15% total return provided by the Morgan Stanley Capital
International Emerging Markets Free Index (MSCI/EMF) for the same 3-month
period.(2)
We attribute the fund's 12-month total returns to the strong recovery that took
place in emerging markets over the past year, as well as the success of our
individual stock selection strategy within those markets. It is important to
note that such total returns were produced with considerable volatility within
each quarter. The fund' s positive total returns were generated in the first,
second and third fiscal quarters, while the fourth fiscal quarter witnessed
negative total returns. This short-term performance demonstrates that investing
in this segment of the market can be volatile and that it can be important for
investors to maintain a long-term perspective.
What is the fund's investment approach?
The fund seeks to achieve long-term capital growth by investing in the stocks of
companies organized, or with a majority of their assets or businesses, in
emerging market countries. Normally, the fund will not invest more than 25% of
its total assets in the securities of companies in any single emerging market
country.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
When selecting stocks for the fund, we use a macroeconomic, "top-down" country
allocation approach. We strive to identify and forecast key trends in global
economic variables, such as gross domestic product, inflation and interest
rates; investment themes, such as the impact of new technologies and the
globalization of industries and brands; relative values of equity securities,
bonds and cash; and long-term trends in currency movements.
In addition, we use a "bottom-up" approach to company and sector analysis which
focuses on companies that exhibit strong growth and are reasonably valued. The
" bottom-up" approach evaluates growth factors for each company such as revenue
prospects, operating cash flow, ability to achieve consistent earnings and
management's ability to achieve higher operating margins.
What other factors influenced the fund's performance?
Emerging market countries have experienced a remarkable turnaround over the past
year. In many cases, the countries that performed the worst last year were the
strongest this year. This was most evident in South Korea and Singapore and, to
a lesser degree, in Thailand and Indonesia. Stocks in other emerging market
countries also performed well, including those in Greece, Brazil and Mexico.
In Asia, we have begun to see signs of economic improvement. This is
particularly true in Japan, whose economy was spurred by government spending
aimed at stimulating the domestic economy. With currencies in many Southeast
Asian countries still down almost 50% from their highs last year, many investors
have determined that this region has once again become a competitive producer of
goods. As investment capital flowed into Southeast Asia as a result, the stocks
of many companies have exhibited strong returns.
Europe has also exhibited signs of economic growth during the past year.
However, it's important to remember that the European economy was not nearly as
depressed as Asia's economy at this time last year, and therefore did not have
as much ground to regain. Low inflation has resulted in unchanged interest rates
in Europe over the past 12 months, with the exception of the U.K.
What is the fund's current strategy?
Over the past year, we have focused primarily on the Pacific Basin region --
particularly in South Korea and Singapore -- because we believed the
region presented many compelling investment opportunities in the wake of last
year' s financial crisis. As a result, we received strong returns from our
investments in Trigem Computer and Korea Data Systems, two South Korean
technology companies that benefited from the high growth rate of lower priced
personal computers. In Singapore, our holdings in City Development, a property
management company, and DBS Group, a large development bank, generated positive
returns.
In Latin America, we maintained a slight overweight to Brazil at the beginning
of the period. By March, however, when performance became flat, we began paring
back our investments. We also enjoyed successes from our investments in the
United Kingdom, most notably from Antofagasta Holdings, a diversified company
with interests in mining, railroad transportation and forestry.
On the other hand, the fund's large exposure to Hungary, a country whose stocks
disappointed throughout most of the period, hurt performance. In addition, we
trimmed our exposure to Greece because we believed the valuations of many of
these companies were too high. As it turned out, the Greek stock market
performed exceptionally well this year, and our limited exposure there hurt
performance.
We are pleased with the returns that we have seen in emerging market countries
this past year. We currently plan to maintain our strategy of diversifying the
portfolio across numerous countries and sectors in an effort to seek long-term
capital growth for our shareholders.
October 15, 1999
(1) 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. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
INCOME DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MORGAN
STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE INDEX (MSCI/EMF), WHICH IS
THE PROPERTY OF MORGAN STANLEY & CO., INCORPORATED, IS A MARKET
CAPITALIZATION-WEIGHTED INDEX COMPOSED OF COMPANIES REPRESENTATIVE OF THE MARKET
STRUCTURE OF 26 EMERGING MARKET COUNTRIES IN EUROPE, LATIN AMERICA AND THE
PACIFIC BASIN, AND INCLUDES GROSS DIVIDENDS REINVESTED. THE MSCI/EMF INDEX
EXCLUDES CLOSED MARKETS AND THOSE SHARES IN OTHERWISE FREE MARKETS WHICH ARE NOT
PURCHASABLE BY FOREIGNERS.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Premier Emerging
Markets Fund Class A shares, Class B shares, Class C shares and Class R shares
and the Morgan Stanley Capital International Emerging Markets Free Index
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
*SOURCE: LIPPER ANALYTICAL SERVICES, INC.
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 EMERGING MARKETS FUND ON
3/31/98 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE MORGAN STANLEY
CAPITAL INTERNATIONAL EMERGING MARKETS FREE INDEX ON THAT DATE. ALL DIVIDENDS
AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM
INITIAL SALES CHARGE ON CLASS A SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES
CHARGE ON CLASS B AND CLASS C SHARES AND ALL OTHER APPLICABLE FEES AND EXPENSES
ON ALL CLASSES. THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE
INDEX, WHICH IS THE PROPERTY OF MORGAN STANLEY & CO. INCORPORATED, IS A MARKET
CAPITALIZATION WEIGHTED INDEX COMPOSED OF COMPANIES REPRESENTATIVE OF THE MARKET
STRUCTURE OF 26 EMERGING MARKET COUNTRIES IN EUROPE, LATIN AMERICA, AND THE
PACIFIC BASIN. THE MSCI/EMF INDEX EXCLUDES CLOSED MARKETS AND THOSE SHARES IN
OTHERWISE FREE MARKETS WHICH ARE NOT PURCHASABLE BY FOREIGNERS. THE INDEX DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES AND INCLUDES GROSS
DIVIDENDS REINVESTED. 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.
Average Annual Total Returns AS OF 9/30/99
<TABLE>
Inception From
Date 1 Year Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (5.75%) 3/31/98 54.33% (7.21)%
WITHOUT SALES CHARGE 3/31/98 63.71% (3.48)%
CLASS B SHARES
WITH REDEMPTION(*) 3/31/98 58.59% (6.86)%
WITHOUT REDEMPTION 3/31/98 62.29% (4.31)%
CLASS C SHARES
WITH REDEMPTION(**) 3/31/98 61.59% (4.19)%
WITHOUT REDEMPTION 3/31/98 62.59% (4.19)%
CLASS R SHARES
3/31/98 64.01% (3.28)%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
* 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.
The Fund
(STATEMENT OF INVESTMENTS
September 30, 1999
STATEMENT OF INVESTMENTS CONTINUED)
COMMON STOCKS--97.0% Shares Value ($)
- --------------------------------------------------------------------------------
BRAZIL--6.7%
Aracruz Celulose, ADS 2,000 41,750
Companhia Paranaense Energia 'B', ADS 5,000 32,812
Companhia Siderurgica Nacional, ADS 1,000 25,750
Petroleo Brasileiro 200 23,389
Tele Centro Sul Participacoes, ADS 500 27,750
Tele Norte Leste Participacoes, ADS 2,000 31,000
182,451
CHILE--2.4%
Linea Aerea Nacional Chile, ADS 2,200 17,325
Quinenco, ADS 2,500 25,313
Santa Isabel, ADS 3,000 (a) 22,875
65,513
CZECH REPUBLIC--1.3%
Ceske Radiokomunikace, GDR 1,000 (a) 36,250
GREECE--2.1%
Hellenic Telecommunications Organization 1,000 23,374
National Bank of Greece 220 17,641
Stet Hellas Telecommunications, ADS 800 (a) 15,100
56,115
HONG KONG--7.4%
APT Satellite, ADS 5,000 (a) 23,125
Cathay Pacific Airways 11,000 19,825
Cheung Kong, ADS 4,000 33,342
Henderson Land Development 6,000 27,729
JCG 70,000 41,001
New World Development 12,000 26,339
Sun Hung Kai Properties 4,000 30,510
201,871
HUNGARY--2.9%
MOL Magyar Olaj-es Gazipari, GDR 1,500 31,875
Magyar Tavkozlesi, ADS 1,750 47,688
79,563
INDIA--2.4%
India Fund 5,000 (a) 64,375
INDONESIA--2.7%
P. T. Gudang Garam 5,000 10,138
P. T. Hanjaya Mandala Sampoerna 8,000 (a) 14,224
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
INDONESIA (CONTINUED)
P. T. Semen Gresik 15,000 24,007
P. T. Telekomunikasi, ADS 3,500 24,281
72,650
ISRAEL--2.0%
Bank Hapoalim 6,700 16,487
Bank Leumi Le-Israel 9,500 16,539
Koor Industries, ADS 1,300 22,669
55,695
MEXICO--12.0%
Alfa 12,200 51,501
Cemex, Cl. CPO 10,000 48,031
Corporacion Interamericana de Entretenimiento 12,898 (a) 30,975
Grupo Financiero Banamex Accival 12,000 (a) 21,543
Grupo Radio Centro, ADS 4,000 (a) 16,500
Grupo Televisa, GDR 1,000 (a) 39,938
Fomento Economico Mexicano, ADS 1,500 46,969
Telefonos de Mexico, Cl. L, ADS 1,000 71,250
326,707
PHILIPPINES--1.3%
Equitable Banking 4,600 9,560
Manila Electric 7,500 21,638
Metropolitan Bank & Trust 700 5,134
36,332
POLAND--1.4%
Elektrim Spolka Akcyjna 1,800 (a) 16,682
KGHM Polska Miedz, GDR 1,800 21,690
38,372
PORTUGAL--.8%
Portugal Telecom, ADS 560 23,135
SINGAPORE--6.0%
DBS Group 4,000 44,732
Elec & Eltek International 5,000 19,400
Fraser & Neave 5,000 16,333
NatSteel 18,000 31,783
Neptune Orient Lines 20,000 (a) 24,014
Overseas Union Bank 6,000 26,663
162,925
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
SOUTH AFRICA--9.8%
Anglovaal Mining 4,000 (a) 33,319
De Beers Consol Mines, ADS 2,000 54,000
Profurn 75,691 56,745
Sappi 3,200 31,187
Sasol, ADS 7,000 54,250
Teljoy 40,000 35,985
265,486
SOUTH KOREA--15.4%
Hanil Cement Manufacturing 1,000 20,140
Hanwha Chemical 2,500 (a) 22,606
Hite Brewery 1,164 (a) 38,561
Housing & Commercial Bank, GDR 1,500 28,688
Korea Data System 1,850 29,198
Korea Electric Power, ADS 2,500 40,156
Korea Telecom, ADS 2,000 (a) 74,000
Pohang Iron & Steel, ADS 2,400 75,150
Samsung Electronics 350 56,679
Trigem Computer 500 34,320
419,498
TAIWAN--10.3%
Bank Sinopac 24,976 13,294
China Steel, GDR 2,500 49,625
Evergreen Marine, GDR 2,700 (a) 37,462
Far Eastern Textile 35,310 50,157
Pacific Electrical Wire & Cable 21,000 (a) 10,252
Siliconware Precision Industries, GDR 4,305 (a) 44,880
Taiwan Semiconductor Manufacturing, ADS 2,500 (a) 73,750
279,420
THAILAND--3.5%
Samart 80,000 (a) 30,307
Thai Rung Union Car 50,000 (a) 64,157
94,464
TURKEY--3.7%
Akbank, GDR 10,000 30,250
Haci Omer Sabanci, GDR 6,000 39,750
Migros Turk 70,000 30,367
100,367
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
UNITED KINGDOM--2.9%
Antofagasta Holdings 12,000 78,425
TOTAL COMMON STOCKS
(cost $2,490,326) 2,639,614
- --------------------------------------------------------------------------------
PREFERRED STOCKS--1.7%
- --------------------------------------------------------------------------------
BRAZIL:
Banco do Estado de Sao Paulo 400 9,362
Caemi Mineracao e Metalurgica 1,000 36,902
TOTAL PREFERRED STOCKS
(cost $56,294) 46,264
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $2,546,620) 98.7% 2,685,878
CASH AND RECEIVABLES (NET) 1.3% 35,432
NET ASSETS 100.0% 2,721,310
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 2,546,620 2,685,878
Cash 121,217
Cash denominated in foreign currencies 1,513 1,545
Receivable for investment securities sold 149,385
Receivable for shares of Common Stock subscribed 72,227
Dividends receivable 3,029
Prepaid expenses 505
Due from The Dreyfus Corporation 7,442
3,041,228
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to Distributor 1,078
Payable for investment securities purchased 294,865
Accrued expenses 23,975
319,918
- --------------------------------------------------------------------------------
NET ASSETS ($) 2,721,310
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 2,756,027
Accumulated investment (loss) (5,218)
Accumulated net realized gain (loss) on investments and
foreign currency transactions (167,857)
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 138,358
- --------------------------------------------------------------------------------
NET ASSETS ($) 2,721,310
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C Class R
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 1,621,855 577,670 388,748 133,037
Shares Outstanding 138,020 49,611 33,293 11,301
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.75 11.64 11.68 11.77
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended September 30, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $3,955 foreign taxes withheld at source) 32,390
Interest 3,720
TOTAL INCOME 36,110
EXPENSES:
Management fee--Note 3(a) 24,189
Registration fees 60,938
Legal fees 41,331
Custodian fees 21,736
Audit fees 20,583
Prospectus and shareholders' reports 8,231
Shareholder servicing costs--Note 3(c) 5,563
Distribution fees--Note 3(b) 3,732
Directors' fees and expenses--Note 3(d) 828
Loan commitment fees--Note 2 3
Miscellaneous 1,354
TOTAL EXPENSES 188,488
Less- expense reimbursement due to undertaking--Note 3(a) (141,766)
NET EXPENSES 46,722
INVESTMENT (IOSS) (10,612)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments and foreign currency transactions
510,762
Net unrealized appreciation (depreciation) on investments and foreign
currency transactions 318,405
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 829,167
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 818,555
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
Year Ended September 30,
-----------------------------------
1999 1998 (a)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS ($):
Investment income (loss)-net (10,612) 4,760
Net realized gain (loss) on investments 510,762 (678,619)
Net unrealized appreciation (depreciation) on investments 318,405 (180,047)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 818,555 (853,906)
- ----------------------------------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (8,004) --
Class B shares (883) --
Class C shares (464) --
Class R shares (1,296) --
TOTAL DIVIDENDS (10,647) --
- -----------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 719,143 1,420,000
Class B shares 1,317,475 207,994
Class C shares 263,874 200,000
Class R shares 1,000 200,000
Dividends reinvested:
Class A shares 8,004 --
Class B shares 883 --
Class C shares 464 --
Class R shares 1,296 --
Cost of shares redeemed:
Class A shares (471,947) --
Class B shares (979,889) --
Class C shares (60,989) --
Class R shares (60,000) --
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 739,314 2,027,994
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,547,222 1,174,088
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 1,174,088 --
END OF PERIOD 2,721,310 1,174,088
Undistributed investment income (loss)-net (5,218) 4,760
</TABLE>
(A) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended September 30,
----------------------------------
1999 1998 (a)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A
Shares sold 62,781 113,621
Shares issued for dividends reinvested 1,016 --
Shares redeemed (39,398) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 24,399 113,621
- --------------------------------------------------------------------------------
CLASS B
Shares sold 114,896 16,700
Shares issued for dividends reinvested 112 --
Shares redeemed (82,097) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 32,911 16,700
- --------------------------------------------------------------------------------
CLASS C
Shares sold 22,322 16,000
Shares issued for dividends reinvested 59 --
Shares redeemed (5,088) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 17,293 16,000
- --------------------------------------------------------------------------------
CLASS R
Shares sold 100 16,000
Shares issued for dividends reinvested 164 --
Shares redeemed (4,963) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (4,699) 16,000
(A) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
Year Ended September 30,
------------------------
CLASS A SHARES 1999 1998(a)
- -----------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 7.24 12.50
Investment Operations:
Investment income (loss)-net (.04)(b) .04
Net realized and unrealized gain (loss) on investments 4.62 (5.30)
Total from Investment Operations 4.58 (5.26)
Distributions:
Dividends from investment income-net (.07) --
Net asset value, end of period 11.75 7.24
- -----------------------------------------------------------------------------
TOTAL RETURN (%) (C) 63.71 (42.08)(d)
- -----------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 2.25 1.15(d)
Ratio of net investment income (loss) to average net assets (.37) .35(d)
Decrease reflected in above expense ratios
due to undertakings by the Manager 7.26 2.44(d)
Portfolio Turnover Rate 194.20 234.00(d)
- --------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,622 822
(A) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended September 30,
------------------------
CLASS B SHARES 1999 1998(a)
- --------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 7.21 12.50
Investment Operations:
Investment income (loss)-net (.12)(b) .00(c)
Net realized and unrealized gain (loss) on investments 4.59 (5.29)
Total from Investment Operations 4.47 (5.29)
Distributions:
Dividends from investment income-net (.04) --
Net asset value, end of period 11.64 7.21
- --------------------------------------------------------------------------------
TOTAL RETURN (%) (D) 62.29 (42.32)(e)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 3.00 1.54(e)
Ratio of net investment income (loss) to average net assets (1.10) (.04)(e)
Decrease reflected in above expense ratios
due to undertakings by the Manager 7.60 2.48(e)
Portfolio Turnover Rate 194.20 234.00(e)
- --------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 578 120
(A) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(D) EXCLUSIVE OF SALES CHARGE.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
Year Ended September 30,
------------------------
CLASS C SHARES 1999 1998(a)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 7.21 12.50
Investment Operations:
Investment income (loss)-net (.11)(b) .00(c)
Net realized and unrealized gain (loss) on investments 4.61 (5.29)
Total from Investment Operations 4.50 (5.29)
Distributions:
Dividends from investment income-net (.03) --
Net asset value, end of period 11.68 7.21
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (D) 62.59 (42.32)(e)
- --------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 3.00 1.53(e)
Ratio of net investment income (loss) to average net assets (1.21) (.03)(e)
Decrease reflected in above expense ratios
due to undertakings by the Manager 7.65 2.43(e)
Portfolio Turnover Rate 194.20 234.00(e)
- -------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 389 115
</TABLE>
(A) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(D) EXCLUSIVE OF SALES CHARGE.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
Year Ended September 30,
------------------------
CLASS R SHARES 1999 1998(a)
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 7.25 12.50
Investment Operations:
Investment income (loss)-net (.01)(b) .05
Net realized and unrealized gain (loss) on investments 4.61 (5.30)
Total from Investment Operations 4.60 (5.25)
Distributions:
Dividends from investment income-net (.08) --
Net asset value, end of period 11.77 7.25
- -------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 64.01 (42.00)(c)
- -------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 2.00 1.03(c)
Ratio of net investment income (loss) to average net assets (.08) .47(c)
Decrease reflected in above expense ratios
due to undertakings by the Manager 6.93 2.44(c)
Portfolio Turnover Rate 194.20 234.00(c)
- --------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 133 116
</TABLE>
(A) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Emerging Markets 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. The Dreyfus Corporation (the "Manager")
serves as the fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial
Corporation.
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.
As of September 30, 1999, MBC Investments Corp., an indirect subsidiary of
Mellon Financial Corporation, held the following shares:
Class A 78,118 Class C 11,057
Class B 11,069 Class R 11,201
The Company accounts separately for the assets, liabilities and operations of
each series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series 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 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.
The Fund
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. Under the terms of the custody agreement, the fund received net
earnings credits of $1,306 during the period ended September 30, 1999 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(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 of 1986, as amended (the "Code"). To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the fund not to distribute such gain.
(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.
The fund has an unused capital loss carryover of approximately $140,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to September 30, 1999. This
amount is calculated based on Federal income tax regulations which may differ
from financial reporting in accordance with generally accepted accounting
principles. If not applied, the carryover expires in fiscal 2007.
During the period ended September 30, 1999, the fund reclassed $11,281 from
accumulated investment loss to paid-in capital. 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, 1999, the fund did not borrow under the Facility.
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 1.25% of the value of the
fund' s average daily net assets and is payable monthly. The Manager has
undertaken from October 1, 1998 through September 30, 2000 to reduce the
management fee paid by or reimburse such excess expenses of the fund, to the
extent that the fund's aggregate expenses, excluding 12b-1 distribution fees,
shareholder service plan fees, taxes, brokerage, interest on borrowings, loan
commitment fees and extraordinary expenses exceed an annual rate of 2% of the
value of the fund' s average daily net assets. The expense reimbursement,
pursuant to the undertaking, amounted to $141,766, during the period ended
September 30, 1999.
(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 their average daily
net assets. During the period ended September 30, 1999, Class B and Class shares
were charged $2,331 and $1,401, respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor a fee at the annual rate of .25 of 1% of the value of their
average daily net assets for the provision of certain ser
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
vices. 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,
1999, Class A, Class B and Class C shares were charged $3,210, $777 and $467,
respectively, pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended September 30, 1999, the fund was charged $534 pursuant to the transfer
agency 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.
(e) During the period ended September 30, 1999, the fund incurred total
brokerage commissions of $36,278, of which $140, was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended September 30, 1999, amounted to
$4,874,265 and $3,553,445, respectively.
At September 30, 1999, accumulated net unrealized appreciation on investments
was $139,258, consisting of $318,025 gross unrealized appreciation and $178,767
gross unrealized depreciation.
At September 30, 1999, 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).
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Premier Emerging Markets Fund
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Dreyfus Premier Emerging Markets Fund (one of
the series constituting Dreyfus Premier Equity Funds, Inc.) as of September 30,
1999, 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 confirmation of
securities owned as of September 30, 1999 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 Premier Emerging Markets Fund at September 30, 1999, 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 4, 1999
The Fund
For More Information
Dreyfus Premier Emerging Markets Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 329/678AR999
Dreyfus Premier
Market Neutral Fund
ANNUAL REPORT September 30, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments Year 2000 Issues (Unaudited)
and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
8 Statement of Investments
13 Statement of Securities Sold Short
18 Statement of Assets and Liabilities
19 Statement of Operations
20 Statement of Changes in Net Assets
22 Financial Highlights
26 Notes to Financial Statements
31 Report of Independent Auditors
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier Market Neutral Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Premier Market Neutral
Fund, covering the 12-month period from October 1, 1998 through September 30,
1999. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, John S. Cone.
Despite recent weakness in the U.S. stock market, the past year has been
rewarding for most equity investors overall. When the reporting period began,
most sectors of the U.S. stock market had just completed a sharp correction
caused primarily by concerns regarding the spread of the global financial crisis
in overseas markets. Soon after the start of 1999, however, those fears abated.
In fact, the U.S. economy remained strong, characterized by low inflation and
high levels of consumer spending. These conditions supported continued strength
in the stock market through the spring.
In the summer of 1999, however, the Federal Reserve Board raised short-term
interest rates twice in an effort to forestall inflationary pressures in a
fast-growing economy. Because higher interest rates tend to increase the cost of
capital and make fixed-income securities more competitive relative to equities,
most sectors of the stock market declined. By the end of the 12-month reporting
period, the Standard & Poor's 500 Composite Stock Price Index had fallen sharply
from its recent high, although it was still higher than its level one year
earlier.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Premier Market Neutral Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 15, 1999
DISCUSSION OF FUND PERFORMANCE
John S. Cone, Portfolio Manager
How did Dreyfus Premier Market Neutral Fund perform relative to its benchmark?
For the 12-month period ended September 30, 1999, the fund produced a total
return of -3.62% for Class A shares, -4.37% for Class B shares, -4.27% for Class
C shares, and -3.35% for Class R shares.(1) This compares with a 4.73% total
return provided by the Merrill Lynch 3-Month U.S. Treasury Bill Index for the
same period.(2)
We attribute the fund's underperformance during the period to the stock market's
long-held preference for a limited number of large-cap growth stocks whose
performance drove the returns of the S&P 500. While the fund did benefit from a
shift in market sentiment to value stocks from mid-April through July, growth
dominated at all other times during the reporting period, holding back our
overall performance.
What is the fund's investment approach?
The term "market neutral" refers to the fund's investment approach of looking to
maintain minimum exposure to general stock market risk in its pursuit of
long-term capital appreciation. To pursue this goal, the fund simultaneously
takes both "long" and "short" positions in equity securities. By "long" we mean
those investment positions that are bought with the anticipation that the
security will appreciate in value. On the other hand, "short" positions are
those securities that the fund does not own but sells in anticipation of a
decline in the market value of the security. To complete a short transaction,
the fund must borrow the security to make delivery to the buyer.
The strategy behind this two-prong approach is to initiate long positions that
we believe are undervalued and to sell short those stocks that we believe are
overvalued. In this way, we attempt to construct a portfolio that is expected to
have relatively small net exposure to overall stock market risk.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
The fund also attempts to maintain long and short positions that are in equal
dollar amount of securities in an attempt to balance out market-risk
characteristics of the portfolio, including relatively neutral allocations with
respect to industries. For example, if the fund is long 5% within an industry,
it will also tend to be short other securities within that same industry by 5%.
The idea is to buy those stocks that we believe are the best companies within
that particular industry, and sell short those that are considered the least
attractive. In doing so, we attempt to generate attractive returns for our
shareholders.
What other factors influenced the fund's performance?
This has been a difficult time for the fund in terms of being able to identify
attractive investment opportunities based on traditional measures of a company's
value. That' s because during much of the reporting period the stock market
demonstrated high levels of volatility. In such an environment, our traditional
risk/reward analyses understated the range of possible outcomes.
Dreyfus Premier Market Neutral Fund utilizes a series of models, based on
extended periods in the past. However, stock market volatility has been much
greater recently than it was during those past periods. Our models determine
risk/reward characteristics based on near-term earnings expectations, relative
value as determined by fundamental accounting measures, and future cash flow
expectations. Because high levels of volatility affected many of the stocks that
drove the stock market's performance during the past year, our models failed to
identify them as suitable investment candidates. As a result, the fund did not
share in the successes of many of these stocks.
What is the fund's current strategy?
Our emphasis on technology stocks proved beneficial over the past year. In
particular, our holdings in QUALCOMM, CompUSA and Storage Technology produced
positive returns for the fund. In addition, our investments in US Airways Group,
a transportation firm, con
tributed to overall performance. On the other hand, the fund's performance was
held back by its investments in Amazon.com, MGM Grand and Paging Network.
We believe we' ve created a portfolio that is designed to produce favorable
returns for shareholders by having a relatively small exposure to the overall
stock market risk under a variety of different market conditions. To that end,
we plan to remain true to our discipline and remain confident in the efficacy of
our investment models and rigorous stock selection process.
October 15, 1999
(1) 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. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) SOURCE: BLOOMBERG L.P. -- THE MERRILL LYNCH 3-MONTH U.S. TREASURY BILL
INDEX IS CALCULATED USING BILLS THAT MATURE CLOSEST TO, BUT NOT BEYOND, 91 DAYS
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Premier Market
Neutral Fund Class A shares, Class B shares, Class C shares and Class R shares
and the Merrill Lynch 3-Month U.S. Treasury Bill Index
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
*SOURCE: MERRILL LYNCH, PIERCE, FENNER AND SMITH INC.
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 MARKET NEUTRAL FUND ON
6/29/98(INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE MERRILL LYNCH
3-MONTH U.S. TREASURY BILL INDEX ON THAT DATE. FOR COMPARATIVE PURPOSES, THE
VALUE OF THE INDEX ON 6/30/98 IS USED AS THE BEGINNING VALUE ON 6/29/98. ALL
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT THE MAXIMUM
INITIAL SALES CHARGE ON CLASS A SHARES, THE MAXIMUM CONTINGENT DEFERRED SALES
CHARGE ON CLASS B AND CLASS C SHARES, AND ALL OTHER APPLICABLE FEES AND EXPENSES
ON ALL CLASSES. THE MERRILL LYNCH 3-MONTH U.S. TREASURY BILL INDEX IS CALCULATED
USING BILLS THAT MATURE CLOSEST TO, BUT NOT BEYOND, 91 DAYS. THE INDEX DOES NOT
TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION RELATING
TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS
CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN
THIS REPORT.
Average Annual Total Returns AS OF 9/30/99
<TABLE>
Inception From
Date 1 Year Inception
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES
WITH SALES CHARGE (5.75%) 6/29/98 (9.09)% (12.54)%
WITHOUT SALES CHARGE 6/29/98 (3.53)% (8.35)%
CLASS B SHARES
WITH REDEMPTION(*) 6/29/98 (8.02)% (11.87)%
WITHOUT REDEMPTION 6/29/98 (4.28)% (9.03)%
CLASS C SHARES
WITH REDEMPTION(**) 6/29/98 (5.21)% (8.91)%
WITHOUT REDEMPTION 6/29/98 (4.27)% (8.91)%
CLASS R SHARES 6/29/98 (3.26)% (8.08)%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
* THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS B SHARES IS 4% AND IS
REDUCED TO 0% AFTER SIX YEARS.
** THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE FOR CLASS C SHARES IS 1% FOR
SHARES REDEEMED WITHIN ONE YEAR OF THE DATE OF PURCHASE.
The Fund
STATEMENT OF INVESTMENTS
September 30, 1999
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS--89.0% Shares Value ($)
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES--6.8%
Donnelley (R.R.) & Sons 1,500 43,312
General Mills 400 32,450
Ikon Office Solutions 4,100 43,819
Ogden 5,400 54,000
Supervalu 6,100 133,056
306,637
CONSUMER DURABLES--2.7%
Carlisle Cos. 200 7,900
Centex 100 2,956
Hasbro 1,100 23,581
Shaw Industries 3,000 47,625
Whirlpool 600 39,187
121,249
CONSUMER NON-DURABLES--4.2%
IBP 6,400 158,000
International Flavors & Fragrances 500 17,250
Pepsi Bottling Group 900 15,356
190,606
CONSUMER SERVICES--9.7%
Brinker International 1,300 35,262
Comcast, Cl. A 800 31,900
Darden Restaurants 1,400 27,388
H&R Block 2,900 125,969
Harcourt General 700 29,138
Knight-Ridder 2,000 109,750
Mandalay Resort Group 200 3,950
Premier Parks 1,300(a) 37,700
Tricon Global Restaurants 500(a) 20,469
Wiley (John) & Sons, Cl. A 1,200 18,825
440,351
ELECTRONIC TECHNOLOGY--7.8%
Adaptec 2,700(a) 107,156
Comverse Technology 500(a) 47,156
Cordant Technologies 900 27,394
National Semiconductor 600(a) 18,300
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY (CONTINUED)
QUALCOMM 400 (a) 75,675
SCI Systems 300 (a) 13,331
Solectron 900 (a) 64,631
353,643
ENERGY--2.6%
Burlington Resources 400 14,700
Kerr-McGee 1,900 104,619
119,319
FINANCE--20.0%
AXA Financial 1,100 61,394
Bear Stearns Cos. 200 7,688
Charter One Financial 630 14,569
Dime Bancorp 1,300 22,750
Duke Realty Investments 800 15,600
Edwards (A.G.) 1,200 31,650
Freddie Mac 700 36,400
GreenPoint Financial 400 10,625
Lehman Brothers Holdings 2,300 134,119
MBNA 1,300 29,656
Marshall & Ilsley 700 39,944
Morgan (J.P.) 200 22,850
Morgan Stanley, Dean Witter & Co. 1,400 124,862
Pacific Century Financial 5,600 114,450
SouthTrust 3,900 139,912
St. Paul Cos. 1,100 30,250
UnionBanCal 700 25,375
Zions Bancorp 800 44,100
906,194
HEALTH SERVICES--1.9%
Cardinal Health 1,050 57,225
United Healthcare 600 29,212
86,437
HEALTH TECHNOLOGY--2.2%
Chiron 700 (a) 19,381
Genzyme 800 (a) 36,050
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
HEALTH TECHNOLOGY (CONTINUED)
Immunex 300 (a) 13,012
Mallinckrodt Group 1,000 30,188
98,631
INDUSTRIAL SERVICES--1.7%
AES 500 (a) 29,500
Autonation 2,600 32,662
L-3 Communications Holdings 400 (a) 15,100
77,262
NON-ENERGY MINERALS--3.3%
Homestake Mining 5,300 48,694
Johns Manville 2,300 30,475
Owens-Corning 2,400 52,050
Weyerhaeuser 300 17,288
148,507
PROCESS INDUSTRIES--9.9%
Archer Daniels Midland 4,200 51,188
Boise Cascade 1,600 58,300
Cabot 600 14,250
Crane 1,700 38,144
Engelhard 2,100 38,194
Goodrich (B.F.) 900 26,100
International Paper 400 19,225
Loews 200 14,038
Pall 2,300 53,331
Praxair 400 18,400
Premark International 800 40,400
RPM 5,600 68,250
Sonoco Products 300 6,844
Willamette Industries 100 4,312
450,976
PRODUCER MANUFACTURING--5.0%
Autoliv 600 22,575
Dana 500 18,562
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
PRODUCER MANUFACTURING (CONTINUED)
Georgia-Pacific 1,200 48,600
Lear 600 (a) 21,113
Minnesota Mining & Manufacturing 200 19,212
York International 2,700 97,031
227,093
RETAIL TRADE--2.5%
Albertson's 500 19,781
Bed Bath & Beyond 300 (a) 10,481
Best Buy 300 (a) 18,619
Claire's Stores 2,000 33,125
Costco Wholesale 100 (a) 7,200
Federated Department Stores 600 (a) 26,213
115,419
TECHNOLOGY SERVICES--3.8%
Columbia/HCA Healthcare 2,900 61,444
Oracle 1,200 (a) 54,600
Perot Systems, Cl. A 800 14,950
Tech Data 600 (a) 13,969
Wellpoint Health Networks 500 (a) 28,500
173,463
TRANSPORTATION--.6%
CNF Transportation 800 29,800
UTILITIES--4.3%
Florida Progress 500 23,125
Northern States Power 1,600 34,500
Telephone & Data Systems 300 26,644
U.S. Cellular 200 (a) 13,600
UtiliCorp United 750 15,797
Wisconsin Energy 3,400 79,688
193,354
TOTAL COMMON STOCKS
(cost $4,223,096) 4,038,941
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
SHORT-TERM INVESTMENTS--3.5% Amount ($) Value ($)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT;
Bear Stearns & Cos., 5.32% dated 9/30/1999,
due 10/1/1999 in the amount of $157,148
[fully collateralized by $165,000 U.S. Treasury Bills,
11/4/1999, value $164,281]
(cost $157,125) 157,125 157,125
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $4,380,221) 92.5% 4,196,066
CASH AND RECEIVABLES (NET) 7.5% 342,682
NET ASSETS 100.0% 4,538,748
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF SECURITIES SOLD SHORT
September 30, 1999
COMMON STOCKS Shares Value ($)
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES--2.5%
Lamar Advertising, Cl. A 300 14,850
Omnicom Group 700 55,431
Snyder Communications 600 9,112
Viad 1,100 32,450
111,843
CONSUMER DURABLES--1.9%
Goodyear Tire & Rubber 600 28,875
Harley-Davidson 300 15,019
Maytag 1,300 43,306
87,200
CONSUMER NON-DURABLES--10.4%
Brown-Forman, Cl. B 200 12,475
Campbell Soup 3,200 125,200
Clorox 1,400 53,550
Coca-Cola 900 43,256
Colgate-Palmolive 200 9,150
Gillette 500 16,969
Heinz (H.J.) 400 17,200
Hershey Foods 1,800 87,638
NIKE, Cl. B 700 39,812
Wrigley, (Wm) Jr 1,000 68,812
474,062
CONSUMER SERVICES--7.0%
Armstrong World Industries 300 13,481
Central Newspapers, Cl. A 200 8,900
Hearst-Argyle Television, Cl. A 300 6,450
Meredith 1,000 36,312
Mirage Resorts 2,300 32,344
Promus Hotel 1,000 32,563
Reader's Digest Association, Cl. A 500 14,625
Sinclar Broadcast Group, Cl. A 2,600 23,562
Starbucks 400 9,912
TV Guide, Cl. A 400 15,650
Times Mirror, Cl. A 1,900 125,044
318,843
The Fund
STATEMENT OF SECURITIES SOLD SHORT (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--7.9%
Broadcom, Cl. A 200 21,800
General Motors, Cl. H 2,200 125,950
Harris 200 5,525
Lockheed Martin 1,800 58,838
PE Biosystems Group 1,200 86,700
Storage Technology 2,100 40,425
Tellabs 300 17,081
356,319
ENERGY--.7%
Murphy Oil 300 16,219
Valero Energy 800 15,400
31,619
FINANCE--15.7%
American Express 700 94,238
Bank of New York 3,900 130,406
CIGNA 200 15,550
CNA Financial 400 14,000
Cincinnati Financial 300 11,259
Commercial Federal 1,900 37,288
Countrywide Credit Industries 600 19,350
First American 1,000 42,875
Franklin Resources 400 12,300
IndyMac Mortgage Holdings 1,500 22,500
MBIA 400 18,650
Mercury General 400 11,025
Northern Trust 200 16,700
Progressive 100 8,169
Ryder System 700 14,262
SLM Holding 1,800 77,400
State Street 300 19,388
U.S. Bancorp 1,400 42,262
Union Planters 1,100 44,825
United Asset Management 2,600 50,050
UnumProvident 300 8,831
711,328
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
HEALTH TECHNOLOGY--6.3%
ALZA 700 29,969
American Home Products 800 33,200
Amgen 200 16,300
Becton, Dickinson & Co. 500 14,031
Lilly (Eli) 300 19,200
Medtronic 3,052 108,346
PE Celera Genomics 300 12,075
Pfizer 300 10,781
Rexall Sundown 1,400 17,238
Safeskin 3,000 24,656
285,796
INDUSTRIAL SERVICES--.7%
Rowan Cos. 700 11,375
Smith International 200 8,100
Waste Management 700 13,475
32,950
NON-ENERGY MINERALS--5.1%
Martin Marietta Materials 200 7,988
Newmont Mining 2,000 51,750
Phelps Dodge 1,400 77,088
Reynolds Metals 100 6,038
Southdown 500 26,750
Vulcan Materials 1,700 62,262
231,876
PROCESS INDUSTRIES--6.4%
Bowater 600 31,500
duPont (E.I.) deNemours & Co. 1,300 79,138
Fort James 800 21,350
IMC Global 1,900 27,669
Lyondell Petrochemical 1,100 14,712
Sealed Air 1,100 56,444
Tenneco 1,100 18,700
UCAR International 600 13,688
Wesco Financial 100 27,100
290,301
The Fund
STATEMENT OF SECURITIES SOLD SHORT (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
PRODUCER MANUFACTURING--3.5%
Federal-Mogul 900 24,806
General Electric 300 35,569
Pitney Bowes 300 18,281
Steelcase, Cl. A 1,100 15,331
Xerox 1,600 67,100
161,087
RETAIL TRADE--3.4%
CVS 200 8,163
Limited 900 34,425
Tandy 600 31,012
Walgreen 400 10,150
Whole Foods Market 1,000 32,719
Williams-Sonoma 800 38,850
155,319
TECHNOLOGY SERVICES--6.4%
Autodesk 900 19,688
Cambridge Technology Partners 1,600 23,200
Ceridian 900 22,387
Exodus Communication 1,600 115,300
J D Edwards 1,100 22,791
Network Associates 1,200 22,950
PeopleSoft 2,000 33,875
Tenet Healthcare 1,600 28,100
288,291
TRANSPORTATION--3.1%
CSX 500 21,187
Kansas City Southern Industries 700 32,506
US Airways Group 3,300 86,625
140,318
UTILITIES--6.7%
CINergy 800 22,650
Cincinnati Bell 2,700 52,481
Entergy 1,600 46,300
IPALCO Enterprises 500 9,719
Illinova 800 22,450
McLeodUSA, Cl. A 600 25,538
Montana Power 1,200 36,525
COMMON STOCKS (CONTINUED) Shares Value ($)
- --------------------------------------------------------------------------------
UTILITIES (CONTINUED)
Northeast Utilities 800 14,700
SCANA 1,300 31,444
Williams Cos. 1,100 41,181
302,988
TOTAL SECURITIES SOLD SHORT (proceeds $4,316,686) 3,980,140
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--
See Statement of Investments--Note 1(b) 4,380,221 4,196,066
Cash 230,724
Receivable from brokers for proceeds on securities sold short 4,316,686
Receivable for investment securities sold 102,117
Dividends and interest receivable 10,180
Prepaid expenses 96,846
Due from The Dreyfus Corporation 1,172
8,953,791
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to Distributor 2,202
Securities sold short, at value
(proceeds $4,316,686)--see Statement 3,980,140
of Securities Sold Short
Payable for investment securities purchased 407,015
Dividends payable on securities sold short 2,124
Accrued expenses 23,562
4,415,043
- --------------------------------------------------------------------------------
NET ASSETS ($) 4,538,748
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 5,208,284
Accumulated undistributed investment income--net 92,406
Accumulated net realized gain (loss) on investments (914,333)
Accumulated net unrealized appreciation (depreciation)
on investments and securities sold short--Note 4(b) 152,391
- --------------------------------------------------------------------------------
NET ASSETS ($) 4,538,748
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C Class R
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 1,814,111 1,774,499 450,148 499,990
Shares Outstanding 166,652 163,903 41,487 45,753
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 10.89 10.83 10.85 10.93
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended September 30, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 207,408
Cash dividends 72,534
TOTAL INCOME 279,942
EXPENSES:
Management fee--Note 3(a) 68,017
Dividends on securities sold short 63,053
Audit fees 22,581
Registration fees 18,764
Distribution fees--Note 3(b) 17,197
Prospectus and shareholders' reports 11,863
Shareholder servicing costs--Note 3(c) 10,557
Directors' fees and expenses--Note 3(d) 1,671
Custodian fees 1,611
Legal fees 489
Miscellaneous 19,351
TOTAL EXPENSES 235,154
Less--expense reimbursement due to undertaking--Note 3(a) (83,044)
NET EXPENSES 152,110
INVESTMENT INCOME--NET 127,832
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments:
Long transactions (582,215)
Short sale transactions (279,466)
NET REALIZED GAIN (LOSS) (861,681)
Net unrealized appreciation (depreciation)
on investments and securities sold short 545,446
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (316,235)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (188,403)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended September 30,
------------------------------
1999 1998(a)
- ----------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 127,832 40,429
Net realized gain (loss) on investments (861,681) (12,782)
Net unrealized appreciation (depreciation)
on investments 545,446 (393,055)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (188,403) (365,408)
- ----------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (35,269) --
Class B shares (29,553) --
Class C shares (6,986) --
Class R shares (8,759) --
Net realized gain on investments:
Class A shares (15,621) --
Class B shares (16,475) --
Class C shares (3,894) --
Class R shares (3,880) --
TOTAL DIVIDENDS (120,437) --
- ----------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares 13,916 2,012,390
Class B shares -- 2,167,422
Class C shares 6,200 500,000
Class R shares 57,000 500,000
Dividends reinvested:
Class A shares 50,839 --
Class B shares 44,473 --
Class C shares 10,840 --
Class R shares 12,640 --
Cost of shares redeemed:
Class A shares (2,286) --
Class B shares (104,600) (48,574)
Class C shares (551) --
Class R shares (6,713) --
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 81,758 5,131,238
TOTAL INCREASE (DECREASE) IN NET ASSETS (227,082) 4,765,830
- ----------------------------------------------------------------------------
NET ASSETS ($)
Beginning of Period 4,765,830 --
END OF PERIOD 4,538,748 4,765,830
Undistributed investment income--net 92,406 45,141
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended September 30,
----------------------------
1999 1998(a)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A
Shares sold 1,285 161,000
Shares issued for dividends reinvested 4,576 --
Shares redeemed (209) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 5,652 161,000
- --------------------------------------------------------------------------------
CLASS B
Shares sold -- 173,948
Shares issued for dividends reinvested 4,003 --
Shares redeemed (9,942) (4,106)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (5,939) 169,842
- --------------------------------------------------------------------------------
CLASS C
Shares sold 566 40,000
Shares issued for dividends reinvested 973 --
Shares redeemed (52) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,487 40,000
- --------------------------------------------------------------------------------
CLASS R
Shares sold 5,269 40,000
Shares issued for dividends reinvested 1,137 --
Shares redeemed (653) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 5,753 40,000
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
Year Ended September 30,
------------------------
CLASS A SHARES 1999 1998(a)
- -----------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.61 12.50
Investment Operations:
Investment income--net (b) .35 .11
Net realized and unrealized gain (loss)
on investments (.75) (1.00)
Total from Investment Operations (.40) (.89)
Distributions:
Dividends from investment income--net (.22) --
Dividends from net realized gain on investments (.10) --
Total Distributions (.32) --
Net asset value, end of period 10.89 11.61
- --------------------------------------------------------------------------------
TOTAL RETURN (%) (C) (3.53) (7.12)(d)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets 1.61 .51(d)
Ratio of dividends on securities sold short to
average net assets 1.39 .33(d)
Ratio of net investment income to average net assets 3.17 .92(d)
Decrease reflected in above expense ratios
due to undertaking by the Manager 1.83 .42(d)
Portfolio Turnover Rate 138.34 36.54(d)
- -------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,814 1,869
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended September 30,
------------------------
CLASS B SHARES 1999 1998(a)
- --------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.59 12.50
Investment Operations:
Investment income--net (b) .26 .09
Net realized and unrealized gain (loss)
on investments (.75) (1.00)
Total from Investment Operations (.49) (.91)
Distributions:
Dividends from investment income--net (.17) --
Dividends from net realized gain on investments (.10) --
Total Distributions (.27) --
Net asset value, end of period 10.83 11.59
- --------------------------------------------------------------------------------
TOTAL RETURN (%) (C) (4.28) (7.28)(d)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets 2.35 .71(d)
Ratio of dividends on securities sold short to
average net assets 1.39 .33(d)
Ratio of net investment income to average net assets 2.43 .73(d)
Decrease reflected in above expense ratios
due to undertaking by the Manager 1.83 .41(d)
Portfolio Turnover Rate 138.34 36.54(d)
- --------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,774 1,968
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Year Ended September 30,
------------------------
CLASS C SHARES 1999 1998(a)
- ------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.61 12.50
Investment Operations:
Investment income--net (b) .26 .09
Net realized and unrealized gain (loss)
on investments (.75) (.98)
Total from Investment Operations (.49) (.89)
Distributions:
Dividends from investment income--net (.17) --
Dividends from net realized gain on investments (.10) --
Total Distributions (.27) --
Net asset value, end of period 10.85 11.61
- ------------------------------------------------------------------------------
TOTAL RETURN (%) (C) (4.27) (7.12)(d)
- ------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets 2.37 .71(d)
Ratio of dividends on securities sold short to
average net assets 1.38 .33(d)
Ratio of net investment income to average net assets 2.43 .73(d)
Decrease reflected in above expense ratios
due to undertaking by the Manager 1.83 .42(d)
Portfolio Turnover Rate 138.34 36.54(d)
- --------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 450 464
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Year Ended September 30,
------------------------
CLASS R SHARES 1999 1998(a)
- --------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.62 12.50
Investment Operations:
Investment income--net (b) .37 .11
Net realized and unrealized gain (loss)
on investments (.74) (.99)
Total from Investment Operations (.37) (.88)
Distributions:
Dividends from investment income--net (.22) --
Dividends from net realized gain on investments (.10) --
Total Distributions (.32) --
Net asset value, end of period 10.93 11.62
- -----------------------------------------------------------------------------
TOTAL RETURN (%) (3.26 (7.04)(c)
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average net assets 1.36 .51(c)
Ratio of dividends on securities sold short to
average net assets 1.39 .33(c)
Ratio of net investment income to average net assets 3.42 .92(c)
Decrease reflected in above expense ratios
due to undertaking by the Manager 1.83 .38(c)
Portfolio Turnover Rate 138.34 36.54(c)
- --------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 500 465
(A) FROM JUNE 29, 1998 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Market Neutral Fund (the "fund") is a separate 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 appreciation, while maintaining minimum exposure
to general stock market risk. The Dreyfus Corporation (the "Manager") serves as
the fund' s investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation.
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 series. Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to all series are allocated
among them on a pro rata basis.
As of September 30, 1999, MBC Investments Corp., an indirect subsidiary of
Mellon Financial Corporation, held the following shares:
Class A 164,551 Class C 40,973
Class B 163,903 Class R 41,137
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.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
The fund may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the fund' s Manager, subject to the seller's
agreement to repurchase and the fund's agreement to resell such securities at a
mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the fund's custodian and, pursuant to the terms of
the repurchase agreement, must have an aggregate market value greater than or
equal to the repurchase price plus accrued interest at all times. If the value
of the underlying securities falls below the value of the repurchase price plus
accrued interest, the fund will require the seller to deposit additional
collateral by the next business day. If the request for additional collateral is
not met, or the seller defaults on its repurchase obligation, the fund maintains
the right to sell the underlying securities at market value and may claim any
resulting loss against the seller.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(c) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain, if any, 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, it is the policy of the fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the 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 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, 1999, the fund did not borrow under the Facility.
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 1.50% of the value of the fund'
s average daily net assets and is payable monthly. The Manager has undertaken
from October 1, 1998 through September 30, 2000 to reduce the management fee
paid by or reimburse such excess expenses of the fund, to the extent that the
fund's aggregate expenses, excluding 12b-1 distribution fees, shareholder
service plan fees, taxes, brokerage, loan commitment fees and extraordinary
expenses exceed an annual rate of 2.75% of the value of the fund's average daily
net assets. The expense reimbursement, pursuant to the undertaking, amounted to
$83,044 during the period ended September 30, 1999.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$243 during the period ended September 30, 1999 from commissions earned on sales
of the fund's shares.
(b) Under the Distribution 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 their average daily net assets.
During the period ended September 30, 1999, Class B and Class C shares were
charged $13,846 and $3,351, respectively, pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor a fee 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, 1999, Class A, Class B and Class C
shares were charged $4,484, $4,615 and $1,117, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for provid
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ing personnel and facilities to perform transfer agency services for the fund.
During the period ended September 30, 1999, the fund was charged $147 pursuant
to the transfer agency 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 $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
(a) The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, during the period ended September 30, 1999:
Purchases ($) Sales ($)
- --------------------------------------------------------------------------------
Long transactions 5,719,855 5,976,789
Short sale transactions 6,570,029 5,832,990
TOTAL 12,289,884 11,809,779
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. The fund's long security positions serve as collateral for the open
short positions. Securities sold short at September 30, 1999, and their related
market values and proceeds are set forth in the Statement of Securities Sold
Short.
(b) At September 30, 1999, accumulated net unrealized appreciation on
investments and securities sold short was $152,391, consisting of $779,019 gross
unrealized appreciation and $626,628 gross unrealized depreciation.
At September 30, 1999, 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).
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Premier Market Neutral Fund
We have audited the accompanying statement of assets and liabilities, including
the statements of investments and securities sold short, of Dreyfus Premier
Market Neutral Fund (one of the series constituting Dreyfus Premier Equity
Funds, Inc.) as of September 30, 1999 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 confirmation of
securities owned as of September 30, 1999 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 Premier Market Neutral Fund at September 30, 1999, 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 4, 1999
The Fund
NOTES
For More Information
Dreyfus Premier Market Neutral Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 335AR999
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PREMIER AGGRESSIVE GROWTH FUND CLASS A SHARES
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
STANDARD DREYFUS PREMIER
& POOR'S 500 AGGRESSIVE
PERIOD COMPOSITE STOCK GROWTH FUND
PRICE INDEX * (CLASS A SHARES)
6/23/69 10,000 9,427
9/30/69 9,609 9,487
9/30/70 9,023 8,974
9/30/71 10,882 11,733
9/30/72 12,598 13,714
9/30/73 12,729 12,463
9/30/74 7,772 7,926
9/30/75 10,736 10,764
9/30/76 14,004 13,179
9/30/77 13,436 14,387
9/30/78 15,044 17,918
9/30/79 16,938 21,802
9/30/80 20,527 29,643
9/30/81 19,983 26,036
9/30/82 21,964 30,244
9/30/83 31,703 39,903
9/30/84 33,202 42,826
9/30/85 38,016 51,696
9/30/86 50,083 65,796
9/30/87 71,829 94,734
9/30/88 62,929 78,019
9/30/89 83,664 92,962
9/30/90 75,934 86,544
9/30/91 99,541 112,741
9/30/92 110,531 127,718
9/30/93 124,867 143,090
9/30/94 129,462 140,949
9/30/95 167,963 156,747
9/30/96 202,093 155,630
9/30/97 283,790 167,504
9/30/98 309,566 75,240
9/30/99 395,580 93,945
*Source: Lipper Analytical Services, Inc.
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 AND THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS DREYFUS DREYFUS DREYFUS
STANDARD PREMIER PREMIER PREMIER PREMIER
& POOR'S 500 GROWTH GROWTH GROWTH GROWTH
COMPOSITE AND INCOME AND INCOME AND INCOME AND INCOME
STOCK FUND FUND FUND FUND
PERIOD PRICE (CLASS A (CLASS B (CLASS C (CLASS R
INDEX* SHARES) SHARES) SHARES) SHARES)
12/29/95 10,000 9,427 10,000 10,000 10,000
9/30/96 11,349 13,974 14,714 14,727 14,838
9/30/97 15,937 16,895 17,670 17,657 18,139
9/30/98 17,385 15,711 16,311 16,309 16,889
9/30/99 22,215 19,046 19,315 19,619 20,494
*Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER EMERGING MARKETS FUND CLASS A SHARES, CLASS B SHARES,
CLASS C SHARES AND CLASS R SHARES AND THE MORGAN STANLEY
CAPITAL INTERNATIONAL EMERGING MARKETS FREE INDEX
EXHIBIT A:
MORGAN
STANLEY DREYFUS DREYFUS DREYFUS DREYFUS
CAPITAL PREMIER PREMIER PREMIER PREMIER
INTERNATIONAL EMERGING EMERGING EMERGING EMERGING
EMERGING MARKETS MARKETS MARKETS MARKETS
PERIOD MARKETS FUND FUND FUND FUND
FREE (CLASS A (CLASS B (CLASS C (CLASS R
INDEX * SHARES) SHARES) SHARES) SHARES)
3/31/98 10,000 9,427 10,000 10,000 10,000
6/30/98 7,640 7,858 8,320 8,320 8,336
9/30/98 5,958 5,460 5,768 5,768 5,800
12/31/9 7,030 6,002 6,321 6,327 6,377
3/31/99 7,905 6,938 7,294 7,299 7,379
6/30/99 9,834 9,083 9,538 9,547 9,666
9/30/99 9,327 8,939 8,988 9,378 9,513
* Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS
PREMIER MARKET NEUTRAL FUND CLASS A SHARES, CLASS B SHARES,
CLASS C SHARES AND CLASS R SHARES AND THE MERRILL LYNCH
3-MONTH U.S TREASURY BILL INDEX
EXHIBIT A:
MERRILL DREYFUS DREYFUS DREYFUS DREYFUS
LYNCH PREMIER PREMIER PREMIER PREMIER
3-MONTH MARKET MARKET MARKET MARKET
U.S NEUTRAL NEUTRAL NEUTRAL NEUTRAL
PERIOD TREASURY FUND FUND FUND FUND
BILL (CLASS A (CLASS B (CLASS C (CLASS R
INDEX* SHARES) SHARES) SHARES) SHARES)
6/29/98 10,000 9,427 10,000 10,000 10,000
9/30/98 10,128 8,756 9,272 9,288 9,296
12/31/98 10,242 8,795 9,293 9,309 9,338
3/31/99 10,361 8,004 8,441 8,457 8,507
6/30/99 10,483 8,237 8,670 8,686 8,762
9/30/99 10,612 8,446 8,529 8,891 8,992
* Source: Merrill Lynch, Pierce, Fenner and Smith Inc.
