Dreyfus
Growth Opportunity
Fund, Inc.
ANNUAL REPORT February 29, 2000
(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 Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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 and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
15 Financial Highlights
16 Notes to Financial Statements
21 Report of Independent Auditors
22 Important Tax Information
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
Growth Opportunity Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Growth Opportunity
Fund, Inc., covering the 12-month period from March 1, 1999 through February 29,
2000. 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, Timothy M. Ghriskey.
The past year has been generally rewarding for investors in U.S. stocks.
Although for most of the reporting period, the market' s advance was led
primarily by technology stocks in a fast-growing economy, other market sectors
produced good results during the fourth quarter of 1999. As a result, by the end
of 1999, most major stock market indices had hit new highs, including the Dow
Jones Industrial Average, the S& P 500 Index of large-cap stocks, the
technology-heavy Nasdaq 100 and the Russell 2000 Index of small-capitalization
stocks.
During the first two months of 2000, however, the large-cap sector of the stock
market corrected substantially, and small- and mid-cap stocks generally
outperformed large-capitalization stocks. Retail-, media- and housing-related
companies were particularly hard-hit, primarily because of their significant
exposure to the adverse effects of rising interest rates. On the other hand,
health care and electric utility stocks have gained strength so far in 2000
after suffering declines during 1999.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Growth Opportunity Fund, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
March 23, 2000
DISCUSSION OF FUND PERFORMANCE
Timothy M. Ghriskey, Senior Portfolio Manager
How did Dreyfus Growth Opportunity Fund, Inc. perform relative to its benchmark
For the 12-month period ended February 29, 2000, Dreyfus Growth Opportunity
Fund, Inc. produced a total return of 16.63%.(1) This compares with the 11.73%
return provided by the fund's benchmark, the Standard & Poor's 500 Composite
Stock Price Index ("S&P 500"), for the same period.(2)
We attribute the fund' s performance to an especially strong environment for
growth investing during the past year. In particular, the fund's positive
performance can be attributed to its technology exposure, an area in which the
portfolio benefited from some very good stock selections. The fund also realized
significant gains from its stock selection within the consumer staples sector.
What is the fund's investment approach?
The fund invests in growth and value stocks, including stocks that exhibit
characteristics of both investment styles. We begin with a proprietary computer
model that identifies suitable candidates for the fund. We then reduce that list
of names by conducting fundamental research, and meeting with the management
teams of the remaining candidates. Specifically, we are looking for factors that
could signal a rise in the stock's price, including new products or markets,
opportunities for gaining greater market share, more effective management teams,
or positive changes in the company's corporate structure or market perception.
What other factors influenced the fund's performance?
As "bottom-up" investors, we choose stocks based on their individual merits
rather than according to market or economic trends. However, we remain fully
cognizant of the overall economic environment, and we are aware of trends that
may affect our performance.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
That said, the predominant factor positively influencing performance during the
reporting period was the strong gains achieved by technology stocks relative to
the overall stock market. To illustrate this point more clearly, during the past
six months the technology-laden Nasdaq rose 71% while the Dow Jones Industrial
Average, an index that tracks 30 actively traded blue chip stocks and is a
leading barometer of overall stock market performance, fell 6.4%.
We believe there are several reasons for the strong gains achieved within the
technology sector during the past year. First, individual investors have shown a
preference for technology stocks, most likely due to the compelling returns they
previously earned from their investments in that sector. In a momentum-driven
market, such as the one we've seen this past year, those stocks that performed
best attracted the most investors, which caused the stocks to perform even
better, causing a cyclical pattern.
Second, media focus on the so-called "new economy" has heightened interest in
technology investing. The new economy is thought to be driven in part by the
revolution in information technology, which has resulted in an even greater
interest in technology stocks. Finally, technology has largely been credited
with increasing productivity in the U.S. by allowing companies to gain access to
information more quickly, which helps to reduce costs and inventories.
What is the fund's current strategy?
While the fund is primarily a large-cap fund, we are not limited to stocks
within a specific market capitalization range. As a result, we have begun to
reduce our exposure to the largest stocks in favor of some mid- and
small-capitalization securities. In part, this move was made in recognition of
the value and growth characteristics that we believe small-capitalization stocks
contain. As valuations of many large-cap stocks rose, the valuations of many
mid- and small-cap stocks fell, making them better investment opportunities in
our view, at the current time. Of course, portfolio composition can change at
any time.
Furthermore, we have maintained our exposure to the technology sector, carefully
selecting those stocks that we believe offer the best growth prospects at the
most reasonable valuations. As of February 29, 2000, approximately 50% of the
fund' s total assets were invested in technology stocks.
March 23, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
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 ("S&P 500 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 Growth
Opportunity Fund, Inc. and the Standard & Poor's 500 Composite Stock Price Inde
- --------------------------------------------------------------------------------
<TABLE>
Average Annual Total Returns AS OF 2/29/00
Inception From
Date 1 Year 5 Years 10 Years Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FUND 2/4/72 16.63% 18.37% 12.68% 12.13%
((+)) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS GROWTH OPPORTUNITY
FUND, INC. ON 2/4/72 (INCEPTION DATE) TO A $10,000 INVESTMENT MADE IN THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ON THAT DATE. FOR COMPARATIVE
PURPOSES, THE VALUE OF THE INDEX ON 1/31/72 IS USED AS THE BEGINNING VALUE ON
2/4/72. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE
FEES AND EXPENSES. THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX IS A
WIDELY ACCEPTED, UNMANAGED INDEX OF OVERALL STOCK MARKET PERFORMANCE WHICH DOES
NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER EXPENSES. FURTHER INFORMATION
RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE,
IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE
IN THIS REPORT.
STATEMENT OF INVESTMENTS
<TABLE>
February 29, 2000
COMMON STOCKS--97.2% Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL SERVICES--.1%
McGraw-Hill Cos. 8,200 417,175
COMPUTER SERVICES--.5%
LSI Logic 40,900 (a) 2,620,156
CONSUMER DURABLES--1.0%
Eastman Kodak 12,800 733,600
Ford Motor 50,000 2,081,250
General Motors 25,400 1,931,987
4,746,837
CONSUMER NON-DURABLES--4.3%
Anheuser-Busch Cos. 19,200 1,231,200
Coca-Cola 102,600 4,969,688
Estee Lauder Cos. 51,500 2,233,812
Gillette 44,600 1,572,150
Kimberly-Clark 22,600 1,168,137
PepsiCo 67,000 2,160,750
Procter & Gamble 55,000 4,840,000
Seagram 40,000 2,350,000
20,525,737
CONSUMER SERVICES--4.4%
CBS 46,592 (a) 2,775,136
Cendant 111,000 (a) 1,977,187
Comcast, Cl. A 35,400 1,504,500
Disney (Walt) 123,800 4,147,300
McDonald's 55,800 1,761,188
MediaOne Group 25,700 2,017,450
Time Warner 52,300 4,471,650
Viacom, Cl. B 42,500 (a) 2,369,375
21,023,786
ELECTRONIC TECHNOLOGY COMPONENTS--19.6%
Applied Materials 33,800 (a) 6,183,287
Cisco Systems 173,600 (a) 22,947,750
Flextronics International 90,000 (a) 5,478,750
Gemstar International Group 61,800 (a) 4,689,075
Intel 170,400 19,255,200
JDS Uniphase 21,400 5,641,575
Lucent Technologies 161,000 9,579,500
Nortel Networks 80,100 8,931,150
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY COMPONENTS (CONTINUED)
Qualcomm 41,900 (a) 5,968,131
Texas Instruments 36,000 5,994,000
94,668,418
ELECTRONIC TECHNOLOGY HARDWARE--12.2%
Apple Computer 6,500 (a) 745,063
Boeing 125,400 4,624,125
Compaq Computer 70,000 1,741,250
Dell Computer 156,100 (a) 6,370,831
EMC 62,500 (a) 7,437,500
Hewlett-Packard 62,500 8,406,250
International Business Machines 73,500 7,497,000
Lexmark International Group, CL. A 700 (a) 83,475
Motorola 43,200 7,365,600
Nokia Oyj, ADR 23,400 4,640,512
Sun Microsystems 96,200 (a) 9,163,050
United Technologies 20,300 1,034,031
59,108,687
ENERGY MINERALS--4.7%
Atlantic Richfield 13,200 937,200
BP Amoco, ADS 39,800 1,870,600
Chevron 27,000 2,016,563
Conoco, Cl. B 59,089 1,163,314
Exxon Mobil 142,550 10,735,797
Royal Dutch Petroleum, ADR 90,200 4,735,500
Santa Fe International 42,700 1,224,956
22,683,930
FINANCE--9.2%
American Express 27,800 3,730,412
American International Group 62,975 5,569,352
Bank of America 82,000 3,777,125
Bank of New York 46,900 1,562,356
Chase Manhattan 51,500 4,100,687
Citigroup 208,000 10,751,000
Goldman Sachs Group 22,200 2,053,500
Merrill Lynch 15,200 1,558,000
Morgan (J.P.) 11,100 1,232,100
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCE (CONTINUED)
Morgan Stanley Dean Witter & Co. 68,600 4,832,013
Schwab (Charles) 46,000 1,923,375
UnionBanCal 34,600 1,111,525
Wells Fargo Co. 67,500 2,231,719
44,433,164
HEALTH SERVICES--.2%
Columbia/HCA Healthcare 50,700 979,143
HEALTH TECHNOLOGY--7.9%
Abbott Laboratories 31,400 1,028,350
American Home Products 54,000 2,349,000
Amgen 61,000 4,159,437
Biogen 12,800 1,381,600
Bristol-Myers Squibb 81,700 4,641,581
Johnson & Johnson 57,200 4,104,100
Lilly (Eli) 21,500 1,277,906
Merck & Co. 96,000 5,910,000
Pfizer 160,100 5,143,213
Pharmacia & Upjohn 10,700 509,587
Schering-Plough 59,900 2,089,013
Warner-Lambert 35,000 2,994,688
Watson Pharmaceutical 69,900 (a) 2,796,000
38,384,475
INDUSTRIAL SERVICES--.4%
BJ Services 1,100 (a) 62,768
Schlumberger 23,000 1,699,125
1,761,893
NON-ENERGY MINERALS--.6%
Alcoa 36,800 2,520,800
Weyerhaeuser 9,600 492,600
3,013,400
PROCESS INDUSTRIES--1.5%
Dow Chemical 9,100 987,350
duPont (E.I.) deNemours 42,870 2,164,935
Fort James 8,900 167,431
International Paper 56,300 2,072,544
PPG Industries 900 44,438
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PROCESS INDUSTRIES (CONTINUED)
Rohm & Haas 32,300 1,304,113
Union Carbide Corp 5,400 289,913
7,030,724
PRODUCER MANUFACTURING--5.4%
General Electric 156,600 20,700,563
Honeywell 31,862 1,533,359
Minnesota Mining & Manufacturing 16,700 1,471,688
Tyco International 68,700 2,606,306
26,311,916
RETAIL TRADE--5.3%
Gap 53,150 2,567,809
Home Depot 117,350 6,784,297
Lowes 22,000 1,047,750
Staples 102,600 (a) 2,770,200
Target 18,200 1,073,800
Wal-Mart Stores 235,600 11,470,775
25,714,631
TECHNOLOGY SERVICES--10.2%
America Online 90,800 5,357,200
BroadVision 24,600 (a) 6,213,038
Computer Associates International 22,000 1,414,875
eBay 10,600 (a) 1,519,775
Electronic Data Systems 39,000 2,525,250
Microsoft 216,100 (a) 19,313,938
Oracle 125,000 9,281,250
PSINET 74,800 (a) 3,468,850
49,094,176
UTILITIES--9.7%
AES 39,300 (a) 3,293,831
AT&T 132,688 6,559,763
AT&T--Liberty Media Group, Cl. A 113,000 (a) 5,904,250
BellSouth 76,400 3,113,300
Enron 30,000 2,070,000
GTE 40,000 2,360,000
Global Crossing 31,900 (a) 1,487,338
MCI WorldCom 115,500 (a) 5,154,188
NEXTEL Communications, Cl. A 15,300 (a) 2,092,275
COMMON STOCKS (CONTINUED) Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
NEXTLINK Communications, Cl. A 25,000 (a) 2,754,688
Qwest Communications International 1,300 (a) 60,288
SBC Communications 140,170 5,326,460
Sprint (FON Group) 35,600 2,171,600
Sprint (PCS Group) 36,200 (a) 1,873,350
U S West 35,600 2,585,450
46,806,781
TOTAL COMMON STOCKS
(cost $335,457,068) 469,325,029
- ------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--1.0% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S TREASURY BILLS:
5.15%, 3/30/2000 1,389,000 1,383,222
5.68%, 4/27/2000 3,459,000 3,428,145
TOTAL SHORT-TERM INVESTMENTS
(cost $4,811,129) 4,811,367
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $340,268,197) 98.2% 474,136,396
CASH AND RECEIVABLES (NET) 1.8% 8,720,634
NET ASSETS 100.0% 482,857,030
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
February 29, 2000
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 340,268,197 474,136,396
Cash 10,920,640
Receivable for investment securities sold 8,307,422
Receivable for shares of Common Stock subscribed 501,266
Dividends receivable 456,593
Prepaid expenses 17,877
494,340,194
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 358,161
Payable for investment securities purchased 10,952,077
Payable for shares of Common Stock redeemed 86,133
Accrued expenses 86,793
11,483,164
- --------------------------------------------------------------------------------
NET ASSETS ($) 482,857,030
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 344,244,730
Accumulated undistributed investment income--net 411,026
Accumulated net realized gain (loss) on investments 4,333,075
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b) 133,868,199
- --------------------------------------------------------------------------------
NET ASSETS ($) 482,857,030
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 43,352,181
NET ASSET VALUE, offering and redemption price per share ($) 11.14
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended February 29, 2000
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $38,509 foreign taxes withheld at source) 5,014,132
Interest 371,513
TOTAL INCOME 5,385,645
EXPENSES:
Management fee--Note 3(a) 3,532,518
Shareholder servicing costs--Note 3(b) 1,083,035
Directors' fees and expenses--Note 3(c) 72,584
Professional fees 57,008
Custodian fees--Note 3(b) 42,864
Registration fees 34,281
Prospectus and shareholders' reports 29,555
Interest expense--Note 2 7,905
Loan commitment fees--Note 2 4,016
Miscellaneous 11,547
TOTAL EXPENSES 4,875,313
INVESTMENT INCOME--NET 510,332
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 12,875,820
Net realized gain (loss) on financial futures 669,366
NET REALIZED GAIN (LOSS) 13,545,186
Net unrealized appreciation (depreciation) on investments 59,520,971
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 73,066,157
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 73,576,489
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended
----------------------------------
February 29, February 28,
2000 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 510,332 2,995,352
Net realized gain (loss) on investments 13,545,186 69,955,132
Net unrealized appreciation (depreciation)
on investments 59,520,971 (26,780,009)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 73,576,489 46,170,475
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (345,766) (3,072,334)
Net realized gain on investments (49,715,408) (19,444,090)
TOTAL DIVIDENDS (50,061,174) (22,516,424)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 388,258,284 427,315,063
Dividends reinvested 48,371,887 21,694,078
Cost of shares redeemed (436,480,907) (522,033,194)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 149,264 (73,024,053)
TOTAL INCREASE (DECREASE) IN NET ASSETS 23,664,579 (49,370,002)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 459,192,451 508,562,453
END OF PERIOD 482,857,030 459,192,451
Undistributed investment income--net 411,026 246,460
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 36,332,414 41,353,693
Shares issued for dividends reinvested 4,694,022 2,139,455
Shares redeemed (40,759,872) (50,515,617)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 266,564 (7,022,469)
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
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>
Fiscal Year Ended February,
-------------------------------------------------------------------
2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 10.66 10.15 10.22 9.56 8.67
Investment Operations:
Investment income--net .01 .07 .05 .10 .10
Net realized and unrealized
gain (loss) on investments 1.65 .97 1.39 1.93 2.19
Total from Investment Operations 1.66 1.04 1.44 2.03 2.29
Distributions:
Dividends from investment income--net (.01) (.07) (.07) (.09) (.12)
Dividends from net realized gain
on investments (1.17) (.46) (1.22) (1.28) (1.26)
Dividends in excess of net realized gain
on investments -- -- (.22) -- (.02)
Total Distributions (1.18) (.53) (1.51) (1.37) (1.40)
Net asset value, end of period 11.14 10.66 10.15 10.22 9.56
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 16.63 10.57 15.62 22.35 27.37
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.03 1.04 1.06 1.06 1.04
Ratio of net investment income
to average net assets .11 .64 .50 .91 .91
Portfolio Turnover Rate 86.41 162.98 112.32 137.38 268.40
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 482,857 459,192 508,562 471,660 419,240
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Growth Opportunity Fund, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The fund's investment objective is to
provide long-term capital growth consistent with the preservation of capital.
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. is the distributor of the fund's shares, which are sold to the
public without a sales charge.
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. 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 the 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 amount 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 discounts 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 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, 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.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) 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
February 29, 2000 was approximately $141,370 with a related weighted average
annualized interest rate of 5.59%.
NOTE 3--Management Fee and Other Transactions with Affiliates:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .75 of 1% of the value of the
fund' s average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses of the fund, exclusive of
taxes, brokerage, interest on borrowings (which in the view of Stroock, Stroock,
& Lavan LLP, counsel to the fund, also includes loan commitment fees) and
extraordinary expenses, exceed 11_2% of the average value of the fund's average
daily net assets, the Manager will bear such excess expense. During the period
ended February 29, 2000, there was no expense reimbursement pursuant to the
Agreement.
(B) Under the Shareholder Services Plan, the fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed
an annual rate of .25 of 1% of the value of the fund's average daily net assets
for certain allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the period ended
February 29, 2000, the fund was charged $754,325 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 February 29, 2000, the fund was charged $222,768 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 February 29, 2000, the fund was
charged $42,864 pursuant to the custody agreement.
(C) Each non-affiliated director is a board member of one or more funds
comprising a certain group of funds ("Fund Group") within the Dreyfus complex.
Effective January 1, 2000, for their participation as a director in a Fund
Group, the directors receive an annual fee of $40,000 each, $6,000 for each
meeting attended in person and $500 for each telephonic meeting in which they
participate. These fees are allocated among the funds in the Fund Group. The
Chairman of the Board receives an additional 25% of such compensation. Prior to
January 1, 2000, each director who was not an "affiliated person" as defined in
the Act received from the fund an annual fee of $4,500 and an attendance fee of
$500 per meeting. The Chairman of the Board received an additional 25% of such
compensation.
(D) During the period ended February 29, 2000, the fund incurred total brokerage
commissions of $701,141, of which $41,742 was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period ended
February 29, 2000, amounted to $396,969,391 and $453,136,171, respectively.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 contracts 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 February 29, 2000, there were no
financial futures contracts outstanding.
(B) At February 29, 2000, accumulated net unrealized appreciation on investments
was $133,868,199, consisting of $143,695,591 gross unrealized appreciation and
$9,827,392 gross unrealized depreciation.
At February 29, 2000, 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).
NOTE 5--Subsequent Event:
At a meeting of the fund's Board of Directors held on March 6, 2000, the Board
approved the termination of the fund' s Distribution Agreement with Premier
Mutual Fund Services, Inc., and approved a new Distribution Agreement with
Dreyfus Service Corporation. The new Distribution Agreement with Dreyfus Service
Corporation became effective on March 22, 2000.
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Growth Opportunity Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Dreyfus
Growth Opportunity Fund, Inc., including the statement of investments, as of
February 29, 2000, 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 auditing standards generally accepted
in the United States. 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 the financial highlights. Our procedures included
verification by examination of securities held by the custodian as of February
29, 2000 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 Growth Opportunity Fund, Inc. at February 29, 2000, 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 accounting principles generally accepted
in the United States.
New York, New York
April 3, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
For Federal tax purposes the fund hereby designates $.1330 per share as a
long-term capital gain distribution of the $.1970 per share paid on December 8,
1999 and also designates $.9810 per share as a long-term capital gain
distribution paid on March 31, 1999.
The fund also designates 71.27% of the ordinary dividends paid during the fiscal
year ended February 29, 2000 as qualifying for the corporate dividends received
deduction. Shareholders will receive notification in January 2001 of the
percentage applicable to the preparation of their 2000 income tax returns.
NOTES
For More Information
Dreyfus Growth Opportunity Fund, Inc.
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
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to
[email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 018AR002
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS GROWTH OPPORTUNITY FUND, INC. AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
STANDARD
& POOR'S 500 DREYFUS GROWTH
PERIOD COMPOSITE STOCK OPPORTUNITY
PRICE INDEX * FUND, INC.
2/4/72 10,000 10,000
2/29/72 10,278 9,960
2/28/73 11,081 8,820
2/28/74 9,867 7,160
2/28/75 8,771 7,080
2/29/76 11,165 10,682
2/28/77 11,636 11,262
2/28/78 10,667 12,211
2/28/79 12,440 16,629
2/29/80 15,505 26,925
2/28/81 18,855 33,910
2/28/82 17,137 26,074
2/28/83 23,716 34,885
2/29/84 26,285 39,066
2/28/85 31,768 37,827
2/28/86 41,448 49,397
2/28/87 53,679 61,723
2/29/88 52,230 61,686
2/28/89 58,429 71,300
2/28/90 69,443 75,369
2/28/91 79,610 81,796
2/29/92 92,307 106,260
2/28/93 102,129 98,441
2/28/94 110,626 109,343
2/28/95 118,742 107,041
2/29/96 159,902 136,342
2/28/97 201,709 166,808
2/28/98 272,284 192,859
2/28/99 326,087 213,237
2/29/00 364,323 248,701
*Source: Lipper Analytical Services,
Inc.
