Dreyfus
Core Value
Fund, Inc.
PROSPECTUS
- ------------------------------------------------------------------------------
PROSPECTUS DECEMBER 19, 1994
As Revised
January 13, 1995
DREYFUS CORE VALUE FUND
- ------------------------------------------------------------------------------
DREYFUS CORE VALUE FUND (THE "FUND"), FORMERLY CALLED THE "LAUREL
CAPITAL APPRECIATION FUND," IS A SEPARATE PORTFOLIO OF THE DREYFUS/LAUREL
FUNDS TRUST, A MANAGEMENT INVESTMENT COMPANY (THE "COMPANY"), KNOWN AS A MUTUAL
FUND. THE FUND IS A DIVERSIFIED EQUITY FUND SEEKING LONG-TERM GROWTH OF
CAPITAL, WITH CURRENT INCOME AS A SECONDARY OBJECTIVE, THROUGH INVESTMENTS
PRIMARILY IN COMMON STOCKS.
BY THIS PROSPECTUS, THE FUND IS OFFERING INVESTOR SHARES AND CLASS R
SHARES. (CLASS R SHARES OF THE FUND WERE FORMERLY CALLED TRUST SHARES.)
INVESTOR SHARES AND CLASS R SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES
OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS R SHARES ARE SOLD
PRIMARILY TO BANK TRUST DEPARTMENTS AND OTHER FINANCIAL SERVICE PROVIDERS
(INCLUDING MELLON BANK, N.A. AND ITS AFFILIATES) ("BANKS") ACTING ON BEHALF OF
CUSTOMERS HAVING A QUALIFIED TRUST OR INVESTMENT ACCOUNT OR RELATIONSHIP AT
SUCH INSTITUTION. INVESTOR SHARES ARE PRIMARILY SOLD TO RETAIL INVESTORS BY THE
FUND'S DISTRIBUTOR AND BY BANKS, SECURITIES BROKERS OR DEALERS AND OTHER
FINANCIAL INSTITUTIONS ("SERVICE AGENTS") THAT HAVE ENTERED INTO A SELLING
AGREEMENT WITH THE FUND'S DISTRIBUTOR.
SHARES OF THE FUND ARE SOLD WITHOUT A SALES LOAD. INVESTOR SHARES OF
THE FUND ARE SUBJECT TO DISTRIBUTION AND SHAREHOLDER SERVICING FEES.
YOU CAN PURCHASE OR REDEEM INVESTOR SHARES BY TELEPHONE USING THE
DREYFUS TELETRANSFER PRIVILEGE.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER. THE
DREYFUS CORPORATION IS REFERRED TO AS "DREYFUS."
SHARES OF THE FUND ARE ALSO AVAILABLE THROUGH A SERVICING NETWORK
ASSOCIATED WITH MELLON BANK, N.A. ("MELLON BANK"), AN AFFILIATE OF DREYFUS.
EXCHANGE AND SHAREHOLDER SERVICES VARY DEPENDING UPON THE NETWORK THROUGH WHICH
YOU PURCHASE FUND SHARES. SEE "HOW TO BUY FUND SHARES."
----------------
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ CAREFULLY BEFORE YOU INVEST
AND RETAINED FOR FUTURE REFERENCE.
A STATEMENT OF ADDITIONAL INFORMATION ("SAI") DATED DECEMBER 19, 1994,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO
SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") AND IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE
FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK, 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 666.
----------------
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THE NET
ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS MELLON BANK OR ITS
AFFILIATES TO BE ITS INVESTMENT MANAGER. MELLON BANK OR AN AFFILIATE MAY BE
PAID FOR PERFORMING OTHER SERVICES FOR THE FUND, SUCH AS CUSTODIAN, TRANSFER
AGENT OR FUND ACCOUNTANT SERVICES. THE FUND IS DISTRIBUTED BY PREMIER MUTUAL
FUND SERVICES, INC.
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
EXPENSE SUMMARY 3
FINANCIAL HIGHLIGHTS 4
DESCRIPTION OF THE FUND 6
MANAGEMENT OF THE FUND 10
HOW TO BUY FUND SHARES 12
SHAREHOLDER SERVICES 15
HOW TO REDEEM FUND SHARES 18
DISTRIBUTION PLAN (INVESTOR SHARES ONLY) 20
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES 21
PERFORMANCE INFORMATION 22
GENERAL INFORMATION 23
2
<TABLE>
<CAPTION>
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES: INVESTOR SHARES CLASS R INSTITUTIONAL SHARES
--------------- ------- --------------------
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases none none none
Maximum Sales Load Imposed on Reinvestments none none none
Deferred Sales Load none none none
Redemption Fee none none none
Exchange Fee none none none
ESTIMATED ANNUAL FUND OPERATING EXPENSES:
(as a percentage of net assets) none none none
Management Fee1 .88% .88% 0.88%
12b-1 Fee .25% none 0.15%
Other Expenses2 0.00% 0.00% 0.00%
----- ----- -----
Total Fund Operating Expenses 1.13% .88% 1.03%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE:
You would pay the following expenses
on a $1,000 investment, assuming (1) a 5% annual
return and (2) redemption at the end of each
time period: INVESTOR SHARES CLASS R INSTITUTIONAL SHARES
--------------- ------- --------------------
<S> <C> <C> <C>
1 Year $ 12 $ 9 $ 11
3 Years $ 36 $ 28 $ 33
5 Years $ 62 $ 49 $ 57
10 Years $137 $108 $126
</TABLE>
_______________
1 The voluntary waiver of a portion of the Management Fees by Dreyfus is
expected during the current fiscal year. Without the voluntary waiver, the
Management Fees would be equal to 0.90%.
2 Does not include fees and expenses of the non-interested trustees (including
counsel). The investment manager is contractually required to reduce its
Management Fee in an amount equal to the Fund's allocable portion of such fees
and expenses, which are estimated to be 0.02% of the Fund's net assets. (See
"Management of the Fund.")
- --------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5%
ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN
AN ACTUAL RETURN GREATER OR LESS THAN 5%.
- --------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that investors will bear, directly or indirectly,
the payment of which will reduce investors' return on an annual basis. Other
Expenses and Total Fund Operating Expenses are based on estimated amounts for
the current fiscal year. Long-term investors in Investor shares could pay more
in 12b-1 fees than the economic equivalent of paying the maximum front-end
sales charges applicable to mutual funds sold by members of the National
Association of Securities Dealers, Inc. ("NASD"). The information in the
foregoing table does not reflect any fee waivers or expense reimbursement
arrangements that may be in effect. Certain Service Agents may charge their
clients direct fees for effecting transactions in Fund shares; such fees are
not reflected in the foregoing table. See "Management of the Fund," "How to Buy
Fund Shares" and "Distribution Plan."
The Company understands that banks, brokers, dealers or other financial
institutions (including Dreyfus and its affiliates) (collectively "Service
Agents") may charge fees to their clients who are owners of the Fund's Investor
shares for various services provided in connection with a client's account.
These fees would be in addition to any amounts received by a Service Agent
under its Selling Agreement ("Agreement") with Premier Mutual Fund Services,
Inc. (the "Distributor"). The Agreement requires each Service Agent to disclose
to its clients any compensation payable to such Service Agent by the
Distributor and any other compensation payable by the client for various
services provided in connection with their accounts.
In addition to Investor shares and Class R shares, the Fund offers
Institutional Shares to holders of shares of a predecessor class of the Fund as
of April 4, 1994. Institutional Shares are offered through a servicing network
associated with Mellon Bank, pursuant to a separate prospectus. Institutional
Shares are subject to a 12b-1 fee at an annual rate of up to 0.15% of its
average daily net assets. Estimated total annual fund operating expenses for
Institutional Shares are 1.03% of average daily net assets.
3
FINANCIAL HIGHLIGHTS
The tables below are based upon a single Investor Share or Institutional Share
outstanding through each fiscal year and the six months ended June 30, 1994
(unaudited) and should be read in conjunction with the financial statements and
related notes that appear in the Fund's Annual Report dated December 31, 1993
and Semi-Annual Report (unaudited) dated June 30, 1994, each of which is
incorporated by reference in the SAI. The financial statements included in the
Fund's Annual Report for the year ended December 31, 1993 have been audited by
Coopers & Lybrand, L.L.P., independent accountants, whose report appears in the
Fund's Annual Report. Financial Highlights are not included for Class R shares
because the Fund did not offer Class R shares as of June 30, 1994.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
6/30/94 ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 12/31/85 12/31/84
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD.(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period....................... $27.80 $25.46 $27.40 $23.20 $27.49 $28.65 $26.07 $32.40 $32.11 $25.91 $27.92
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment operations
Net investment income #.......... 0.19 0.31 0.36 0.39 0.55 0.87 0.54 0.76 0.90 1.00 0.86
Net realized and unrealized gain/
(loss) on investments.......... (0.44) 3.86 0.70 4.88 (4.23) 6.12 4.51 (0.41) 5.69 7.50 0.73
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations (0.25) 4.17 1.06 5.27 (3.68) 6.99 5.05 0.35 6.59 8.50 1.59
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions:
Distributions from net
investment income ............ (0.08) (0.30) (0.36) (0.50 (0.55) (0.55) (0.59) (1.32) (0.50) (0.74) (0.69)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Distributions from net realized
capital gains................. -- (1.53) (2.64) (0.57) (0.06) (7.60) (1.88) (5.36) (5.80) (1.56) (2.91)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions............. (0.08) (1.83) (3.00) (1.07) (0.61) (8.15) (2.47) (6.68) (6.30) (2.30) (3.60)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period.. $27.47 $27.8 $25.46 $27.40 $23.20 $27.49 $28.65 $26.07 $32.40 $32.11 $25.91
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Return+................... (0.92)% 16.51% 4.03% 22.87% (13.44)% 24.96% 19.54% 0.27% 22.48% 35.00% 6.86%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period
(000's)....................... $332,843 $349,813 $423,286 $508,971 $474,998 $640,116 $542,510 $431,630 $452,863 $369,610 $259,696
Ratio of operating expenses to
average net assets............ 1.11%++ 1.15%+++ 1.22% 1.20% 1.26% 1.23% 1.31% 0.95% 0.95% 0.96% 1.00%
Ratio of net investment income
to average net assets......... 33%++ 1.13% 1.33% 1.61% 1.96% 2.75% 2.14% 2.16% 2.65% 3.60% 3.69%
Portfolio turnover rate++++..... 32% 75% 66% 157% 180% 111% 24% 46% 37% 59% 47%
- --------------
</TABLE>
(1) On February 1, 1993, the Fund began offering Institutional Class shares.
Shares outstanding prior to February 1, 1993 were redesignated as Retail Class
shares. Effective April 4, 1994, the Retail shares were reclassified as
Investor Shares. The amounts shown for the period ended June 30, 1994, were
calculated using the performance of a Retail Share outstanding from January 1,
1994 to April 3, 1994, and the performance of an Investor Share outstanding
from April 4, 1994 to June 30, 1994. The Financial Highlights for the year
ended December 31, 1993 and prior periods are based upon a Retail Share
outstanding.
+ Total return represents aggregate total return for the periods indicated.
++Annualized.
+++Without the voluntary reimbursement of expenses by the investment adviser,
the annualized ratio of operating expenses to average net assets for the year
ended December 31, 1993 would have been 1.16%.
++++ In accordance with the Securities and Exchange Commission's July 1985
rules amendment, the rates for 1986 and later periods include U.S. Government
long-term securities which were excluded from the calculations in prior years.
# Net investment income before the voluntary reimbursement of expenses by the
investment adviser for the year ended December 31, 1993 was $0.31.
## The per share amounts have been calculated using the monthly average share
method, which more accurately presents per share data for this period since use
of the undistributed method does not accord with results of operations.
4
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
6/30/94 ENDED
(UNAUDITED) 12/31/93*##
--------- ----------
<S> <C> <C>
Net asset value, beginning of period $27.80 $25.96
------ ------
Income from investment operations:
Net investment income 0.21 0.32#
Net Realized and unrealized gain/(loss) on investments (0.46) 3.38
------ ------
Total from investment operations (0.25) 3.70
------ ------
Less distributions:
Distributions from net investment income (0.08) (0.33)
Distributions from net realized capital gains -- (1.53)
------ ------
Total distributions (0.08) (1.86)
Net asset value, end of period $27.47 $27.80
------ ------
------ ------
Total return+ (0.89)% 14.38%
------ ------
------ ------
Ratios to average net assets / Supplemental data:
Net Assets, end of period (000's) $62,602 $79,656
Ratio of operating expenses to average net assets++ 1.01% 1.04%+++
Ratio of net investment income to average net assets++ 1.43% 1.24%
Portfolio turnover rate 32% 75%
- --------------------------------------------------------------------------------
</TABLE>
* The Fund commenced selling Institutional Class shares on February 1, 1993.
+ Total return represents aggregate total return for the period indicated.
++ Annualized.
+++ Without voluntary reimbursement of expenses by the investment adviser,
the annualized ratio of operating expenses to average net assets for the
year ended December 31, 1993 would have been 1.04%.
# Net investment income before reimbursement of expenses by the investment
adviser for the year ended December 31, 1993 was $0.31.
## Per share amounts have been calculated using the monthly average share
method.
5
DESCRIPTION OF THE FUND
GENERAL
By this Prospectus, the Fund is offering Investor shares and Class R
shares (Class R shares of the Fund were formerly called Trust Shares).
Investor shares and Class R shares are identical, except as to the services
offered to and the expenses borne by each Class. Class R shares are sold
primarily to Banks acting on behalf of customers having a qualified trust or
investment account or relationship at such institution. Investor shares are
primarily sold to retail investors by the Fund's Distributor and by Service
Agents that have entered into a Selling Agreement with the Fund's Distributor.
If shares of the Fund are held in an account at a Bank or with a Service Agent,
such Bank or Service Agent may require you to place all Fund purchase, exchange
and redemption orders through them. All Banks and Service Agents have agreed to
transmit transaction requests to the Fund's transfer agent or to the Fund's
Distributor. Distribution and shareholder services paid by Investor shares will
cause Investor shares to have a higher expense ratio and pay lower dividends
than Class R.
INVESTMENT OBJECTIVE
The Fund is a diversified fund that seeks long-term growth of capital,
with current income as a secondary objective, primarily through equity
investments, such as common stocks and securities convertible into common
stocks.
MANAGEMENT POLICIES
Securities are selected for the Fund based on a continuous study of
trends in industries and companies, earning power, growth features and other
investment criteria. Major emphasis is placed on industries and issuers that
are considered by Dreyfus to have particular possibilities for long-term
growth. In general, the Fund's investments are broadly diversified over a
number of industries and, as a matter of operating policy, the Fund will not
invest more than 25% of its total assets in any one industry.
Up to 20% of the Fund's total assets may be invested inforeign
securities. Such investments will be made principally in foreign equity
securities. The Fund may invest up to 5% of its total net assets in
fixed-income securities of companies that are close to entering, or already in,
reorganization proceedings. These obligations will likely be rated below the
four highest ratings of Moody's Investors Service, Inc. ("Moody's") or Standard
& Poor's Ratings Group ("S&P"). In addition, the Fund may write covered put and
call options on its portfolio securities, and purchase and write put and call
options on stock indexes to hedge its portfolio. The Fund may also lend its
portfolio securities.
The Fund may reduce the proportion of its investments in equity
securities and temporarily invest its assets in fixed-income securities and in
U.S. Government Securities and other high-grade, short-term money market
instruments, including repurchase agreements with respect to such instruments,
when, in the opinion of Dreyfus, a defensive posture is warranted. To this
extent, the Fund may not achieve its investment objective.
INVESTMENT TECHNIQUES
In connection with its investment objective and policies, the Fund may
employ, among others, the following investment techniques:
BORROWING. The Fund is authorized, within specified limits, to borrow
money for temporary administrative purposes and to pledge its assets in
connection with such borrowings.
SECURITIES LENDING. From time to time, the Fund may lend portfolio
securities to brokers, dealers and other financial organizations. Such loans
will not exceed 331/3% of the Fund's total assets, taken at value. Loans of
portfolio securities by the Fund will be collateralized by cash, letters of
credit or securities issued or guaranteed by the U.S. Government or its
agencies, which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities.
6
MASTER/FEEDER OPTION. The Company may in the future seek to achieve the
Fund's investment objective by investing all of the Fund's net investable
assets in another investment company having the same investment objective and
substantially the same investment policies and restrictions as those applicable
to the Fund. Shareholders of the Fund will be given at least 30 days' prior
notice of any such investment. Such investment would be made only if the
Trustees determine it to be in the best interest of the Fund and its
shareholders. In making that determination, the Company's Trustees will
consider, among other things, the benefits to shareholders and/or the
opportunity to reduce costs and achieve operational efficiencies. Although the
Fund believes that the Trustees will not approve an arrangement that is likely
to result in higher costs, no assurance is given that costs will be materially
reduced if this option is implemented.
COVERED OPTION WRITING. From time to time, the Fund may write covered
put and call options on portfolio securities. The Fund could realize fees
(referred to as "premiums") for granting the rights evidenced by the options.
However, in return for the premium, the Fund forfeits the right to any
appreciation in the value of the underlying security while the option is
outstanding. A put option embodies the right of its purchaser to compel the
writer of the option to purchase from the option holder an underlying security
at the specified price at any time during the option period. In contrast, a
call option embodies the right of its purchaser to compel the writer of the
option to sell the option holder an underlying security at a specified price at
any time during the option period.
Upon the exercise of a put option written by the Fund, the Fund may
suffer a loss equal to the difference between the price at which the Fund is
required to purchase the underlying security and its market value at the time
of the option exercise, less the premium received for writing the option. Upon
the exercise of a call option written by the Fund, the Fund may suffer a loss
equal to the excess of the security's market value at the time of the option
exercise over the Fund's acquisition cost of the security, less the premium
received for writing the option.
Whenever the Fund writes a call option it will continue to own or to
have the present right to acquire the underlying security for as long as it
remains obligated as the writer of the option. To support its obligation to
purchase the underlying security if a put option is exercised, the Fund will
either (a) deposit with the Fund's custodian in a segregated account, cash,
U.S. Government Securities or other high grade debt obligations having a value
at least equal to the exercise price of the underlying securities or (b)
continue to own the equivalent number of puts of the same "series" (that is,
puts on the same underlying security having the same exercise prices and
expiration dates as those written by the Fund), or an equivalent number of puts
of the same "class" (that is, puts on the same underlying security) with
exercise prices greater than those it has written (or, if the exercise prices
of the puts it holds are less than the exercise prices of those it has written,
it will deposit the difference with the Fund's custodian in a segregated
account).
The Fund may engage in a closing purchase transaction to realize a
profit, to prevent an underlying security from being called or put or, in the
case of a call option, to unfreeze an underlying security (thereby permitting
its sale or the writing of a new option on the security prior to the
outstanding option's expiration). To effect a closing purchase transaction, the
Fund would purchase, prior to the holder's exercise of an option that the Fund
has written, an option of the same series as that on which the Fund desires to
terminate its obligation. The obligation of the Fund under an option that it
has written would be terminated by a closing purchase transaction, but the Fund
would not be deemed to own an option as a result of the transaction. There can
be no assurance that the Fund will be able to effect closing purchase
transactions at a time when it wishes to do so. To facilitate closing purchase
transactions, however, the Fund will ordinarily write options only if a
secondary market for the options exists on a national securities exchange or in
the over-the-counter market.
7
CERTAIN PORTFOLIO SECURITIES
FOREIGN SECURITIES. The Fund may purchase securities of foreign issuers
and may invest in obligations of foreign branches of domestic banks and
domestic branches of foreign banks. Investment in foreign securities presents
certain risks, including those resulting from fluctuations in currency exchange
rates, revaluation of currencies, future political and economic developments
and the possible imposition of currency exchange blockages or other foreign
governmental laws or restrictions, reduced availability of public information
concerning issuers, and the fact that foreign issuers are not generally subject
to uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements comparable to those applicable to
domestic issuers. Moreover, securities of many foreign issuers may be less
liquid and their prices more volatile than those of comparable domestic
issuers. In addition, with respect to certain foreign countries, there is the
possibility of expropriation, confiscatory taxation and limitations on the use
or removal of funds or other assets of the Fund, including withholding of
dividends. Foreign securities may be subject to foreign government taxes that
would reduce the yield on such securities.
ILLIQUID SECURITIES. The Fund will not knowingly invest more than 15%
of the value of its net assets in illiquid securities, including time deposits
and repurchase agreements having maturities longer than seven days. Securities
that have readily available market quotations are not deemed illiquid for
purposes of this limitation (irrespective of any legal or contractual
restrictions on resale.) The Fund may invest in commercial obligations issued
in reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, as amended ("Section
4(2) paper"). The Fund may also purchase securities that are not registered
under the Securities Act of 1933, as amended, but that can be sold to qualified
institutional buyers in accordance with Rule 144A under that Act ("Rule 144A
securities"). Section 4(2) paper is restricted as to disposition under the
federal securities laws, and generally is sold to institutional investors, such
as the Fund, that agree that they are purchasing the paper for investment and
not with a view to public distribution. Any resale by the purchaser must be in
an exempt transaction. Section 4(2) paper normally is resold to other
institutional investors like the Fund through or with the assistance of the
issuer or investment dealers who make a market in the Section 4(2) paper, thus
providing liquidity. Rule 144A securities generally must be sold to other
qualified institutional buyers. Determinations as to the liquidity of
investments in Section 4(2) paper and Rule 144A securities will be made by the
Board of Trustees or by Dreyfus pursuant to guidelines established by the Board
of Trustees. The Board or Dreyfus will consider the availability of reliable
price information and other relevant information in making such determinations.
If a particular investment in Section 4(2) paper or Rule 144A securities is not
determined to be liquid, that investment will be included within the percentage
limitation on investment in illiquid securities. The ability to sell Rule 144A
securities to qualified institutional buyers is a recent development and it is
not possible to predict how this market will mature. Investing in Rule 144A
securities could have the effect of increasing the level of Fund illiquidity to
the extent that qualified institutional buyers become, for a time, uninterested
in purchasing these securities.
LOW-RATED AND COMPARABLE UNRATED SECURITIES. Low-rated and comparable
unrated securities (collectively referred to in this discussion as "low-rated
securities") will likely have some quality and protective characteristics that,
in the judgment of the rating organization, are outweighed by large
uncertainties or major risk exposures to adverse conditions; and are
predominantly speculative with respect to the issuer's capacity to pay interest
and to repay principal in accordance with the terms of the obligation. While
the market values of low-rated securities tend to react less to fluctuations in
interest rate levels than the market values of higher-rated securities, the
market values of certain low-rated securities tend to be more sensitive to
individual corporate developments and changes in economic conditions than
higher-rated securities. In addition, low-rated securities generally present a
higher degree of credit risk. Issuers
8
of low-rated securities are often highly leveraged and may not have more
traditional methods of financing available to them so that their ability to
service their debt obligations during an economic downturn or during sustained
periods of rising interest rates may be impaired. The risk of loss due to
default by such issuers is significantly greater because low-rated securities
are generally unsecured and frequently are subordinated to the prior payment of
senior indebtedness. The Fund may incur additional expenses to the extent that
it is required to seek recovery upon a default in the payment of principal or
interest on its portfolio holdings. The existence of limited markets for
low-rated securities may diminish the Fund's ability to obtain accurate market
quotations for purposes of valuing such securities and calculating its net
asset value. Further information regarding security ratings is contained in the
SAI.
STOCK INDEX OPTIONS. The Fund may purchase and write exchange-listed
put and call options on stock indexes to hedge against risks of market-wide
price movements. A stock index measures the movement of a certain group of
stocks by assigning relative values to the common stocks included in the index.
(Examples of well-known stock indexes are the Standard & Poor's 500 Composite
Stock Price Index and the NYSE Composite Index.) Options on stock indexes are
similar to options on securities. However, because options on stock indexes do
not involve the delivery of an underlying security, the option represents the
holder's right to obtain from the writer in cash a fixed multiple of the amount
by which the exercise price exceeds (in the case of a put) or is less than (in
the case of a call) the closing value of the underlying index on the exercise
date.
The advisability of using stock index options to hedge against the risk
of market-wide movements will depend on the extent of diversification of the
Fund's stock instruments and the sensitivity of its stock investments to
factors influencing the underlying index. The effectiveness of purchasing or
writing stock index options as a hedging technique will depend upon the extent
to which price movements in the portion of the portfolio being hedged
correlate with price movements in the stock index selected. When the Fund
writes an option on a stock index, it will deposit cash or cash equivalents or
a combination of both in an amount equal to the market value of the option, in
a segregated account with the Fund's custodian, and will maintain the account
while the option is open.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. A
repurchase agreement involves the purchase of a security by the Fund and a
simultaneous agreement (generally with a bank or broker-dealer) to repurchase
that security from the Fund at a specified price and date or upon demand. This
technique offers a method of earning income on idle cash. A risk associated
with repurchase agreements is the failure of the seller to repurchase the
securities as agreed, which may cause the Fund to suffer a loss if the market
value of such securities declines before they can be liquidated on the open
market. Repurchase agreements with a duration of more than seven days are
considered illiquid securities and are subject to the associated limits
discussed above.
OTHER INVESTMENT COMPANIES. The Fund may invest in securities issued by
other investment companies to the extent that such investments are consistent
with the Fund's investment objective and policies and permissible under the
Investment Company Act of 1940, as amended ("1940 Act"). As a shareholder of
another investment company, the Fund would bear, along with other shareholders,
its pro rata portion of the other investment company's expenses, including
advisory fees. These expenses would be in addition to the advisory and other
expenses that the Fund bears directly in connection with its own operations.
PORTFOLIO TURNOVER. While securities are purchased for the Fund on the
basis of potential for long-term growth of capital and not for short-term
trading profits, the Fund's turnover rate may exceed 100%. A portfolio turnover
rate of 100% would occur, for example, if all the securities held by the Fund
were replaced once in a period of one year. A higher rate of portfolio turnover
involves correspondingly greater brokerage commissions and other expenses that
must be borne directly by the Fund and, thus, indirect-
9
ly by its shareholders. In addition, a high rate of portfolio turnover may
result in the realization of larger amounts of short-term capital gains that,
when distributed to the Fund's shareholders, are taxable to them as ordinary
income. Nevertheless, securities transactions for the Fund will be based only
upon investment considerations and will not be limited by any other
considerations when Dreyfus deems it appropriate to make changes in the Fund's
assets.
RISK FACTORS
LIMITING INVESTMENT RISKS. The Fund is subject to a number of
investment limitations. Certain limitations are matters of fundamental policy
and may not be changed without the affirmative vote of the holders of a
majority of the Fund's outstanding shares. The SAI describes all of the Fund's
fundamental and non-fundamental restrictions.
The investment objective, policies, restrictions, practices and
procedures of the Fund, unless otherwise specified, may be changed without
shareholder approval. If the Fund's investment objective, policies,
restrictions, practices or procedures change, shareholders should consider
whether the Fund remains an appropriate investment in light of the
shareholder's then-current position and needs.
In order to permit the sale of the Fund's shares in certain states, the
Fund may make commitments more restrictive than the investment policies and
restrictions described in this Prospectus and the SAI. Should the Fund
determine that any such commitment is no longer in the best interest of the
Fund, it may consider terminating sales of its shares in the states involved.
MANAGEMENT OF THE FUND
INVESTMENT MANAGER. Dreyfus, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947. Dreyfus is a wholly-owned subsidiary of Mellon
Bank, which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon").
As of November 30, 1994, Dreyfus managed or administered approximately $71
billion in assets for more than 1.9 million investor accounts nationwide.
Dreyfus serves as the Fund's investment manager. Dreyfus supervises and
assists in the overall management of the Fund's affairs under an Investment
Management Agreement with the Fund, subject to the overall authority of the
Company's Board of Trustees in accordance with Massachusetts law. Pursuant to
the Investment Management Agreement, Dreyfus provides, or arranges for the
provision by one or more third parties of, investment advisory, administrative,
custody, fund accounting and transfer agency services to the Fund. As the
Fund's investment manager, Dreyfus manages the Fund by making investment
decisions based on the Fund's investment objective, policies and restrictions.
The Fund is co-managed by Guy R. Scott and Mark E. Donovan. Mr. Scott
is a an Officer of Mellon Bank. Mr. Scott and Mr. Donovan have been employed by
Dreyfus as portfolio managers of the Fund since October 17, 1994. Mr. Scott is
responsible for the Fund and for managing over $280 million among various
institutional accounts. Mr. Scott also serves on the Equity Policy Group
Committee. Previously, Mr. Scott held a position as an Equity Portfolio Manager
for Putnam Advisory, where he was responsible for more than $1 billion in
pension assets. A Chartered Financial Analyst, Mr. Scott earned a B.S. in
Economics and an M.B.A. in Finance from the University of Wisconsin.
Mr. Donovan is a Senior Vice President and Vice Chairman of the Equity
Policy Group for The Boston Company where he oversees The Boston Company's
investment strategy. Previously, Mr. Donovan worked as a consultant with Kaplan
Smith & Associates, a subsidiary of First Boston Corporation, and as a
securities analyst with Value Line Inc. Mr. Donovan earned a degree from
Rennselaer Polytechnical Institute and is a Chartered Financial Analyst.
Mellon is a publicly owned multibank holding company incorporated under
Pennsylvania law in 1971 and registered under the Bank Holding Company Act of
1956, as amended. Mellon provides a comprehensive range of financial products
and services in domestic and selected international markets.
10
Mellon is among the twenty-five largest bank holding companies in the United
States based on total assets. Mellon's principal wholly-owned subsidiaries are
Mellon Bank, Mellon Bank (DE) National Association, Mellon Bank (MD), The
Boston Company, Inc., AFCO Credit Corporation and a number of companies known
as Mellon Financial Services Corporations. Through its subsidiaries, including
Dreyfus, Mellon managed approximately $201 billion in assets as of September
30, 1994, including $76 billion in mutual fund assets. As of September 30,
1994, Mellon, through various subsidiaries, provided non-investment services,
such as custodial or administration services, for approximately $659 billion in
assets, including approximately $108 billion in mutual fund assets.
Under the Investment Management Agreement, the Fund is contractually
obligated to pay a fee computed daily and paid monthly, at the annual rate of
.90% of the Fund's average daily net assets less certain expenses dscribed
below. Dreyfus has agreed to waive this fee to .88% of the Fund's average
daily net assets less certain expenses described below. Dreyfus pays
all of the Fund's expenses, except brokerage, taxes, interest, fees and
expenses of the non-interested Trustees (including counsel fees),
Rule 12b-1 fees (if applicable) and extraordinary expenses. Although Dreyfus
does not pay for the fees and expenses of the non-interested Trustees
(including counsel fees), Dreyfus is contractually required to reduce its
investment management fee in an amount equal to the Fund's allocable share
of such fees and expenses. In order to compensate Dreyfus for paying
virtually all of the Fund's expenses, the Fund's investment management fee
is higher than the investment advisory fees paid by most investment
companies. Most, if not all, such companies also pay for a portion
of the non-investment advisory expenses that are not paid by such companies'
investment advisers. From time to time, Dreyfus may waive (either voluntarily
or pursuant to applicable state limitations) additional investment
management fees payable by the Fund. From April 4, 1994, to October 17, 1994,
the Fund was advised by Mellon Bank under the Investment Management Agreement.
Prior to April 4, 1994, the Fund was advised by The Boston Company Advisors,
Inc. pursuant to a written agreement approved by the Company's Trustees. For
the fiscal year ended December 31, 1993 the Fund paid its investment adviser,
The Boston Company Advisors, Inc. ("Boston Advisors"), (an indirect
wholly-owned subsidiary of Mellon Bank Corporation) 0.75% in investment
advisory fees under the Fund's previous investment advisory contract (such
contract only covered the provision of investment advisory and certain
specified administrative services). For the fiscal year ended December 31, 1993
total operating expenses (excluding Rule 12b-1 fees) of the Fund were 1.01% and
0.89% for the Retail and Institutional Classes, respectively, of the Fund's
daily net assets. It is anticipated that the current total operating expenses
of the Fund (excluding Rule 12b-1 fees) will be approximately .88% of the
Fund's average daily net assets.
In addition, Investor shares may be subject to certain distribution
fees. See "Distribution Plan."
Dreyfus may pay the Fund's Distributor for shareholder services from
Dreyfus's own assets, including past profits but not including the management
fee paid by the Fund. The Fund's Distributor may use part or all of such
payments to pay Service Agents in respect of these services.
Dreyfus is authorized to allocate purchase and sale orders for
portfolio securities to certain financial institutions, including, in the case
of agency transactions, financial institutions that are affiliated with Dreyfus
or Mellon Bank or that have sold shares of the Fund, if Dreyfus believes that
the quality of the transaction and the commission are comparable to what they
would be with other qualified brokerage firms. From time to time, to the extent
consistent with its investment objective, policies and restrictions, the Fund
may invest in securities of companies with which Mellon Bank has a lending
relationship.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"). The Distributor is located at One Exchange Place, Boston,
Massachusetts 02109. The Distributor is a wholly owned subsidiary of
Institutional Administration Services, Inc., a provider of mutual fund
administration services, the parent company of which is Boston Institutional
Group, Inc.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, AND
SUB-ADMINISTRATOR--Mellon Bank (One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258) is the Fund's custodian. The Fund's Transfer
11
and Dividend Disbursing Agent is The Shareholder Services Group, Inc. (the
"Transfer Agent"), a subsidiary of First Data Corporation, One American Express
Plaza, Providence, Rhode Island 02903. Premier Mutual Fund Services, Inc.
serves as the Fund's sub-administrator and, pursuant to a Sub-Administration
Agreement, provides various administrative and corporate secretarial services
to each Fund.
HOW TO BUY FUND SHARES
GENERAL--Investor shares are offered to any investor and may be
purchased through the Distributor or Service Agents that have entered into
Selling Agreements with the Distributor.
Class R shares are sold primarily to Banks acting on behalf of
customers having a qualified trust or investment account or relationship at
such institution. A Retirement Plan is a certain qualified or non-qualified
employee benefit plan or other program, including pension, profit-sharing and
other deferred compensation plans, whether established by corporations,
partnerships, non-profit entities or state and local governments ("Retirement
Plan"). Class R shares may be purchased for a Retirement Plan only by a
custodian, trustee, investment manager or other entity authorized to act on
behalf of such Plan. Institutions effecting transactions in Class R shares for
the accounts of their clients may charge their clients direct fees in
connection with such transactions.
In addition to Investor shares and Class R shares, the Fund also offers
Institutional Class shares through a separate prospectus. Institutional Class
shares are not subject to a sales charge on purchases or on redemptions.
Institutional Class shares are subject to a Rule 12b-1 fee at an annual rate of
up to 0.15% of the Fund's average net assets attributable to Institutional
Class Shares. Institutional Class shares are offered to those customers of
certain financial planners and investment advisers who held shares of a
predecessor class of the Fund on April 4, 1994. For more information concerning
Institutional Class shares, see the current prospectus for Institutional Class
shares.
Shares of the Fund that are offered through this Prospectus are also
available through a servicing network associated with Mellon Bank, an affiliate
of Dreyfus. For more information about purchasing Fund shares through the that
network and a Prospectus, call 1-800-548-2868. Please read the Prospectus
carefully. Exchange and Shareholder Services, including the telephone purchase
option and minimum and maximum dollar amounts associated with such services,
may vary depending upon the network through which you purchase Fund shares.
Stock certificates are issued only upon your written request. The Fund
reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a client
of a Service Agent which has made an aggregate minimum initial purchase for its
customers of $2,500. Subsequent investments must be at least $100. However, the
minimum initial investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs
and 403(b)(7) Plans with only one participant is $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a non-working
spousal IRA with a minimum initial investment of $250. The initial investment
must be accompanied by the Fund's Account Application. For full-time or
part-time employees of Dreyfus or any of its affiliates or subsidiaries,
directors of Dreyfus, Board members of a fund advised by Dreyfus including
members of the Company's Board, or the spouse or minor child of any of the
foregoing, the minimum initial investment is $1,000. For full-time or part-time
employees of Dreyfus or any of its affiliates or subsidiaries who elect to have
a portion of their pay directly deposited into their Fund account, the minimum
initial investment is $50. The Fund reserves the right to offer Fund shares
without regard to minimum purchase requirements to employees participating in
certain qualified or non-qualified employee benefit plans or other programs
where contributions or account information can be transmitted in a manner and
form acceptable to the Fund. The Fund reserves
12
the right to vary further the initial and subsequent investment minimum
requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed to Retirement Plans.
These limitations apply with respect to participants at the plan level and,
therefore, do not directly affect the amount that may be invested in the Fund
by a Retirement Plan. Participants and plan sponsors should consult their tax
advisers for details.
You may purchase Fund shares by check or wire, or, with respect to
Investor shares only, through the Dreyfus TELETRANSFER Privilege described
below. Checks should be made payable to "The Dreyfus Family of Funds" or, if
for Dreyfus retirement plan accounts, to "The Dreyfus Trust Company,
Custodian." Payments to open new accounts which are mailed should be sent to
The Dreyfus Family of Funds, P.O. Box 9387, Providence, Rhode Island
02940-9387, together with your Account Application indicating which Class of
shares is being purchased. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be enclosed and sent
to The Dreyfus Family of Funds, P.O. Box 105, Newark, New Jersey 07101-0105.
For Dreyfus retirement plan accounts, both initial and subsequent investments
should be sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor subsequent investments
should be made by third party check. PURCHASE ORDERS MAY BE DELIVERED IN PERSON
ONLY TO A DREYFUS FINANCIAL CENTER. THESE ORDERS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. FOR THE LOCATION OF THE
NEAREST DREYFUS FINANCIAL CENTER, PLEASE CALL ONE OF THE TELEPHONE NUMBERS
LISTED UNDER "GENERAL INFORMATION."
Wire payments may be made if your bank account is in a commercial bank
that is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. To purchase Investor Shares in your name,
immediately available funds may be transmitted by wire to The Bank of New York,
DDA# 8900104325. For wire information with respect to Class R shares please
call 1-800-548-2868. The wire must include your Fund account number (for new
accounts, your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable. If your
initial purchase of Fund shares is by wire, you should call 1-800-645-6561
after completing your wire payment in order to obtain your Fund account
number. Please include your Fund account number on the Fund's Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of funds
from an account maintained in a bank or other domestic financial institution
that is an Automated Clearing House ("ACH") member. You must direct the
institution to transmit immediately available funds through the ACH System to
The Bank of New York with instructions to credit your Fund account. The
instructions must specify your Fund account registration and Fund account
number preceded by the digits "1111."
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have a
minimum of 250 employees eligible for participation in such plans or programs
or (ii) such plan's or program's aggregate investment in the Dreyfus Family of
Funds or certain other products made available by the Distributor to such plans
or programs exceeds one million dollars ("Eligible Benefit Plans"). The
determination of the number of employees eligible for participation in a plan
or program shall be made on the date Fund shares are first purchased by or on
behalf of employees participating in such plan or program
13
and on each subsequent January 1st. All present holdings of shares of funds in
the Dreyfus Family of Funds by Eligible Benefit Plans will be aggregated to
determine the fee payable with respect to each purchase of Fund shares. The
Distributor reserves the right to cease paying these fees at any time. The
Distributor will pay such fees from its own funds, other than amounts received
from the Fund, including past profits or any other source available to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Other Distributions and Taxes"
and the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
NET ASSET VALUE ("NAV") -- An investment portfolio's NAV refers to the
worth of one share. The NAV for Investor shares and Class R shares is computed
by adding, with respect to such Class of shares, the value of the Fund's
investments, cash, and other assets attributable to that Class, deducting
liabilities of the Class and dividing the result by number of shares of that
Class outstanding. The valuation of assets for determining NAV for the Fund may
be summarized as follows:
The portfolio securities of the Fund listed or traded on a stock
exchange, except as otherwise noted, are valued at the latest sale price. If no
sale is reported, the mean of the latest bid and asked prices is used.
Securities traded over-the-counter are priced at the mean of the latest bid and
asked prices but will be valued at the last sale price if required by
regulations of the SEC. When market quotations are not readily available,
securities and other assets are valued at a fair value as determined in good
faith in accordance with procedures established by the Board of Trustees.
Bonds are valued through valuations obtained from a commercial pricing
service or at the most recent mean of the bid and asked prices provided by
investment dealers in accordance with procedures established by the Board of
Trustees.
Pursuant to a determination by the Board of Trustees that such value
represents fair value, debt securities with maturities of 60 days or less held
by the Fund are valued at amortized cost. When a security is valued at
amortized cost, it is valued at its cost when purchased, and thereafter by
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument.
NAV is determined on each day that the New York Stock Exchange ("NYSE")
is open (a "business day"), as of the close of business of the regular session
of the NYSE (usually 4 p.m. Eastern Time). Investments and requests to exchange
or redeem shares received by the Fund in proper form before the close of
business on the NYSE (usually 4 p.m., Eastern Time) are effective on, and will
receive the price determined on, that day (except investments made by
electronic funds transfer, which are effective two business days after your
call). Investment, exchange and redemption requests received after the close of
the NYSE are effective on and receive the share price determined on the next
business day.
The NAV of most shares of investment portfolios advised by Dreyfus
(other than the money market funds) is published in leading newspapers daily.
The yield of most of The Dreyfus Funds' money market funds is published weekly
in leading financial publications and in most local newspapers. The NAV of any
Fund may also be obtained by calling 1-800-645-6561.
The public offering price of Investor shares and Class R shares is the
net asset value per share of that Class.
DREYFUS TELETRANSFER PRIVILEGE (NOT APPLICABLE TO CLASS R SHARES) --
You may purchase Fund shares (minimum $500 and maximum $150,000 per day) by
telephone if you have checked the appropriate box and supplied the necessary
information on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. The proceeds will be transferred between
the bank account designated in one of these documents and your Fund account.
Only a bank account maintained
14
in a domestic financial institution which is an ACH member may be so
designated. The Fund may modify or terminate this Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of Investor shares by telephoning
1-800-221-4060 or, if calling from overseas, 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, shares of the same
class of certain other funds managed or administered by Dreyfus, to the extent
such shares are offered for sale in your state of residence. These funds have
different investment objectives which may be of interest to you. If you desire
to use this service, please call 1-800-645-6561 to determine if it is available
and whether any conditions are imposed on its use. Shareholders are limited to
six exchanges out of the Fund during the calendar year. WITH RESPECT TO CLASS R
SHARES HELD BY RETIREMENT PLANS, EXCHANGES MAY BE MADE ONLY BETWEEN A
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S
RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
To request an exchange, you or your Service Agent acting on your behalf
must give exchange instructions to the Transfer Agent in writing, or by
telephone. Before any exchange, you must obtain and should review a copy of the
current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except in the case of
Personal Retirement Plans, the shares being exchanged must have a current value
of at least $500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. The
ability to issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless you check the relevant "NO" box on the
Account Application, indicating that you specifically refuse this Privilege.
The Telephone Exchange Privilege may be established for an existing account by
written request, signed by all shareholders on the account, or by a separate
signed Shareholder Services Form, also available by calling 1-800-645-6561. If
you have established the Telephone Exchange Privilege, you may telephone
exchange instructions by calling 1-800-221-4060 or, if calling from overseas,
1-401-455-3306. See "How to Redeem Fund Shares--Procedures." Upon an exchange
into a new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the fund
into which the exchange is made: Telephone Exchange Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER Privilege and
the dividends and distributions payment option (except for Dreyfus Dividend
Sweep) selected by you.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges of Investor
shares into funds sold with a sales load. If you are exchanging Investor shares
into a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load, if the
shares of the fund from which you are exchanging were: (a) purchased with a
sales load, (b) acquired by a previous exchange from shares purchased with a
sales load or, (c) acquired through reinvestment of dividends or other
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange you must notify the Transfer Agent or your
Service Agent must notify the Distributor. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the SAI. No
15
fees currently are charged shareholders directly in connection with exchanges,
although the Fund reserves the right, upon not less than 60 days' written
notice, to charge shareholders a nominal fee in accordance with rules
promulgated by the SEC. The Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund exchanges may be modified
or terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize, or an
exchange on behalf of a Retirement Plan which is not tax exempt may result in,
a taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of the same class of certain other funds in the Dreyfus
Family of Funds of which you are currently an investor. WITH RESPECT TO CLASS R
SHARES HELD BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE DREYFUS
AUTO-EXCHANGE PRIVILEGE MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT
PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN
ANOTHER FUND. The amount you designate, which can be expressed either in terms
of a specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth day of the month according to the
schedule you have selected. Shares will be exchanged at the then-current net
asset value; however a sales load may be charged with respect to exchanges of
Investor shares into funds sold with a sales load. The right to exercise this
Privilege may be modified or canceled by the Fund or the Transfer Agent. You
may modify or cancel your exercise of this Privilege at any time by mailing
written notification to The Dreyfus Family of Funds, P.O. Box 9671, Providence,
Rhode Island 02940-9671. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. The exchange of shares of one
fund for shares of another is treated for Federal income tax purposes as a sale
of the shares given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize, or an exchange on behalf of a Retirement
Plan which is not tax exempt may result in, a taxable gain or loss. For more
information concerning this Privilege and the funds in the Dreyfus Family of
Funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular intervals
selected by you. Fund shares are purchased by transferring funds from the bank
account designated by you. At your option, the bank account designated by you
will be debited in the specified amount, and Fund shares will be purchased,
once a month, on either the first or fifteenth day, or twice a month, on both
days. Only an account maintained at a domestic financial institution which is
an ACH member may be so designated. To establish a Dreyfus-AUTOMATIC Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form by calling 1-800-645-6561. You
may cancel your participation in this Privilege or change the amount of
purchase at any time by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, or, if to Dreyfus
retirement plan accounts to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427, and the notification will be
effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends or
dividends and capital gain distributions, if any, paid by the Fund in shares of
the same class of certain other funds in the Dreyfus
16
Family of Funds of which
you are an investor. Shares of the other fund will be purchased at the
then-current net asset value; however, a sales load may be charged with respect
to investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which do
not include the sales load or which reflect a reduced sales load. See
"Shareholder Services" in the SAI. Dreyfus Dividend ACH permits you to transfer
electronically on the payment date dividends or dividends and capital gain
distributions, if any, from the Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is an ACH member
may be so designated. Banks may charge a fee for this service.
For more information concerning these Privileges, or to request a
Dreyfus Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these Privileges by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment in or
cancellation of these Privileges is effective three business days following
receipt. These Privileges are available only for existing accounts and may not
be used to open new accounts. Minimum subsequent investments do not apply for
Dreyfus Dividend Sweep. The Fund may modify or terminate these Privileges at
any time or charge a service fee. No such fee currently is contemplated. Shares
held under Keogh Plans, IRAs or other retirement plans are not eligible for
Dreyfus Dividend Sweep.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by having
Federal salary, Social Security, or certain veterans', military or other
payments from the Federal government automatically deposited into your Fund
account. You may deposit as much of such payments as you elect. You should
consider whether Direct Deposit of your entire payment into a fund with
fluctuating NAV, such as the Fund, may be appropriate for you. To enroll in
Dreyfus Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you desire
to include in this Privilege. The appropriate form may be obtained by calling
1-800-645-6561. Death or legal incapacity will terminate your participation in
this Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, the Fund may
terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon the direct deposit program of your employer, you may have part or all of
your paycheck transferred to your existing Dreyfus account electronically
through the ACH system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your employer's
payroll department. Your employer must complete the reverse side of the form
and return it to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. You may obtain the necessary authorization form by calling
1-800-645-6561. You may change the amount of purchase or cancel the
authorization only by written notification to your employer. It is the sole
responsibility of the your employer, not the Distributor, Dreyfus, the Fund,
the Transfer Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not eligible
for this Privilege.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50 on either a monthly or quarterly basis)
if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus sponsored retirement
plans, may permit certain par-
17
ticipants to establish an automatic withdrawal plan from such Retirement Plans.
Participants should consult their Retirement Plan sponsor and tax adviser for
details. Such a withdrawal plan is different than the Automatic Withdrawal
Plan. An application for the Automatic Withdrawal Plan can be obtained by
calling 1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time
by the shareholder, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the following
numbers toll free: for Keogh Plans, please call 1-800-358-5566; for IRAs and
IRA "Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL--You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as described
below. When a request is received in proper form, the Fund will redeem the
shares at the next determined net asset value as described below. If you hold
Fund shares of more than one Class, any request for redemption must specify the
Class of shares being redeemed. If you fail to specify the Class of shares to
be redeemed or if you own fewer shares of the Class than specified to be
redeemed, the redemption request may be delayed until the Transfer Agent
receives further instructions from you or your Service Agent.
The Fund imposes no charges when shares are redeemed directly through
the Distributor. Service Agents or other institutions may charge their clients
a nominal fee for effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the shares redeemed may be more or less than their
original cost, depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the SEC. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK, BY THE DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE
UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS
TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER
PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE
ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will
not be redeemed until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if the net asset value of your account is
$500 or less and remains so during the notice period.
PROCEDURES--You may redeem Fund shares by using the regular redemption
procedure through the
18
Transfer Agent, the Wire Redemption Privilege, the Telephone Redemption
Privilege or, for Investor shares only, through the Dreyfus TELETRANSFER
Privilege. Other redemption procedures may be in effect for clients of certain
Service Agents and institutions. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities.
You may redeem or exchange Fund shares by telephone if you have checked
the appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select the
TELETRANSFER Privilege or telephone exchange privilege, which is granted
automatically unless you refuse it, you authorize the Transfer Agent to act on
telephone instructions from any person representing himself or herself to be
you, or a representative of your Service Agent, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor the
Transfer Agent will be liable for following telephone instructions reasonably
believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to request
a redemption or an exchange of Fund shares. In such cases, you should consider
using the other redemption procedures described herein. Use of these other
redemption procedures may result in your redemption request being processed at
a later time than it would have been if telephone redemption had been used.
During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671, or if for the Dreyfus
retirement plan accounts to the Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. Redemption requests may be delivered
in person only to a Dreyfus Financial Center. These requests will be forwarded
to the Fund and will be processed only upon receipt thereby. For the location
of the nearest financial center, please call the telephone number listed under
"General Information". Redemption requests must be signed by each shareholder,
including each owner of a joint account, and each signature must be guaranteed.
The Transfer Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
as well as from participants in the New York Stock Exchange Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP"), and the
Stock Exchanges Medallion Program. For more information with respect to
signature-guarantees, please call one of the telephone numbers listed under
"General Information."
Redemption proceeds of at least $1,000 will be wired to any member bank
of the Federal Reserve System in accordance with a written signature-guaranteed
request.
WIRE REDEMPTION PRIVILEGE. You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your bank
is not a member. To establish the Wire Redemption Privilege, you must check the
appropriate box and supply the necessary information on the Fund's Account
Application or file a Shareholder Services Form with the Transfer Agent. You
may direct that redemption proceeds be paid by check (maximum $150,000 per day)
made out to the owners of record and mailed to your address. Redemption
proceeds of less than $1,000 will be paid automatically by check. Holders of
jointly registered Fund or bank accounts may have redemption proceeds of only
up to $250,000 wired within any 30-day period. You may telephone redemption
requests by calling 1-800-221-4060 or, if calling from overseas,
1-401-455-3306. The Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address, and may limit the
amount involved or the number of
19
such requests. This Privilege may be modified or terminated at anytime by the
Transfer Agent or the Fund. The Fund's Statement of Additional Information sets
forth instructions for transmitting redemption requests by wire. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE. You may redeem Fund shares (maximum
$150,000 per day) by telephone if you checked the appropriate box on the Fund's
Account Application or have filed a Shareholder Services Form with the Transfer
Agent. The redemption proceeds will be paid by check and mailed to your
address. You may telephone redemption instructions by calling 1-800-221-4060
or, if calling from overseas, 1-401-455-3306. The Fund reserves the right to
refuse any request made by telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. This Privilege may be modified or terminated at anytime by the
Transfer Agent or the Fund. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are not
eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE--Investor shares. You may redeem Fund
shares (minimum $500 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The proceeds
will be transferred between your Fund account and the bank account designated
in one of these documents. Only such an account maintained in a domestic
financial institution which is an ACH member may be so designated. Redemption
proceeds will be on deposit in your account at an ACH member bank ordinarily
two days after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of jointly
registered Fund or bank accounts may redeem through the Dreyfus TELETRANSFER
Privilege for transfer to their bank account only up to $250,000 within any
30-day period. The Fund reserves the right to refuse any request made by
telephone, including requests made shortly after a change of address, and may
limit the amount involved or the number of such requests. The Fund may modify
or terminate this Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if calling from overseas, 1-401-455-3306. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares issued in certificate
form, are not eligible for this Privilege.
DISTRIBUTION PLAN
(INVESTOR SHARES ONLY)
Investor shares and Institutional Shares are subject to a Distribution
Plan (the "Plan") adopted pursuant to Rule 12b-1 under the 1940 Act ("Rule
12b-1"). The Investor shares and Institutional Shares of the Fund bear some of
the cost of selling those shares under the Plan. The Plan allows the Fund to
spend annually up to 0.25% of its average daily net assets attributable to
Investor shares, and 0.15% of its average daily net assets attributable to
Institutional Shares, to compensate the Distributor, (and in the case of the
Investor shares, the Dreyfus Service Corporation, an affiliate of Dreyfus, for
shareholder servicing activities and expenses primarily intended to result in
the sale of Investor shares of the Fund. The Plan allows the Distributor to
make payments from the Rule 12b-1 fees it collects from the Fund to compensate
Service Agents that have entered into Selling Agreements ("Agreements") with
the Distributor. Under the Agreements, the Service Agents are obligated to
provide distribution related services with regard to the Fund and/or
shareholder services to the Service Agent's clients that own Investor shares or
Institutional Shares of the Fund.
The Fund and the Distributor may suspend or reduce payments under the
Plan at any time, and pay
20
ments are subject to the continuation of the Fund's Plan and the Agreements
described above. From time to time, the Service Agents, the Distributor and the
Fund may agree to voluntarily reduce the maximum fees payable under the Plan.
See the SAI for more details on the Plan.
Potential investors should read this Prospectus in light of the terms
governing Agreements with their Service Agents. A Service Agent entitled to
receive compensation for selling and servicing the Fund's shares may receive
different compensation with respect to one class of shares over another.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund declares and pays dividends from its net investment income
annually and distributes net realized gains, if any, once a year, but it may
make distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. The Fund will not make distributions from net
realized gains unless capital loss carryovers, if any, have been utilized or
have expired. Investors other than qualified Retirement Plans may choose
whether to receive dividends and other distributions in cash or to reinvest
them in additional Fund shares; dividends and other distributions paid to
qualified Retirement Plans are reinvested automatically in additional Fund
shares at net asset value. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will be
calculated at the same time and in the same manner and will be in the same
amount, except that the expenses attributable solely to a particular Class will
be borne exclusively by that Class. Investor shares will receive lower per
share dividends than Class R shares because of the higher expenses borne by the
Investor shares. See "Expense Summary."
It is expected that the Fund will qualify as a "regulated investment
company" under the Code so long as such qualification is in the best interests
of its shareholders. Such qualification will relieve the Fund of any liability
for Federal income tax to the extent its earnings are distributed in accordance
with applicable provisions of the Code.
Dividends derived from net investment income, together with
distributions from net realized short-term capital gains and all or a portion
of any gains realized from the sale or other disposition of certain market
discount bonds, paid by the Fund will be taxable to U.S. shareholders,
including certain non-qualified Retirement Plans, as ordinary income whether
received in cash or reinvested in Fund shares. Distributions from the Fund's
net realized long-term capital gains will be taxable to such shareholders as
long-term capital gains for Federal income tax purposes, regardless of how long
the shareholders have held their Fund shares and whether such distributions are
received in cash or reinvested in Fund shares. The net capital gain of an
individual generally will not be subject to Federal income tax at a rate in
excess of 28%. Dividends and other distributions also may be subject to state
and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term capital gains and all or a portion
of any gains realized from the sale or other disposition of certain market
discount bonds, paid by the Fund to a foreign investor generally are subject to
U.S. withholding tax at the rate of 30%, unless the foreign investor claims the
benefit of a lower rate specified in a tax treaty. Distributions from net
realized long-term capital gains paid by the Fund to a foreign investor, as
well as the proceeds of any redemptions from a foreign investor's account,
regardless of the extent to which gain or loss may be realized, generally will
not be subject to U.S. withholding tax. However, such distributions may be
subject to backup withholding, as described below, unless the foreign investor
certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and other distributions
will be mailed to you annually. You also will receive periodic summaries of
your account which will include information as to dividends and distributions
from net realized, long-term capital gains, if any, paid during the year.
Dividends paid by the Fund to qualified Retirement Plans ordinarily
will not be subject to taxation
21
until the proceeds are distributedfrom the Retirement Plans. The Fund will not
report to the IRS dividends paid to such plans. Generally, distributions from
qualified Retirement Plans, except those representing returns of non-deductible
contributions thereto, will be taxable as ordinary income and, if made prior to
the time the participant reaches age 59 1/2, generally will be subject to an
additional tax equal to 10% of the taxable portion of the distribution. If the
distribution from such a Retirement Plan (other than certain governmental or
church plans) for any taxable year following the year in which the participant
reaches age 70 1/2 is less than the "minimum required distribution" for that
taxable year, an excise tax equal to 50% of the deficiency may be imposed by
the IRS. The administrator, trustee or custodian of such a Retirement Plan will
be responsible for reporting distributions from such plans to the IRS.
Moreover, certain contributions to a qualified Retirement Plan in excess of the
amounts permitted by law may be subject to an excise tax.
With respect to individual investors and certain non-qualified
Retirement Plans, Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized long-term capital gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be realized,
paid to a shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may notify
the Fund to institute backup withholding if the IRS determines a shareholder's
TIN is incorrect or if a shareholder has failed to properly report taxable
dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account and may be claimed as a credit on the record owner's
Federal income tax return.
The Fund may be subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income and
capital gains.
You should consult your tax advisers regarding specific questions as to
Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may be
calculated on the basis of average annual total return and/or total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made by the
Fund during the measuring period were reinvested in shares of the same Class.
These figures also take into account any applicable service and distribution
fees. As a result, at any given time, the performance of the Investor shares
should be expected to be lower than that of Class R. Performance for each Class
will be calculated separately.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment was purchased with an initial payment
of $1,000 and that the investment was redeemed at the end of a stated period of
time, after giving effect to the reinvestment of dividends and other
distributions during the period. The return is expressed as a percentage rate
which, if applied on a compounded annual basis, would result in the redeemable
value of the investment at the end of the period. Advertisements of the Fund's
performance will include the Fund's average annual total return for one, five
and ten year periods, or for shorter periods depending upon the length of time
during which the Fund has operated. Computations of average annual total return
for periods of less than one year represent an annualization of the Fund's
actual total return for the applicable period.
22
Total return is computed on a per share basis and assumes the
reinvestment of dividends and other distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income and
principal changes for a specified period and dividing by the net asset value
(or maximum offering price in the case of Investor shares) per share at the
beginning of the period. Advertisements may include the percentage rate of
total return or may include the value of a hypothetical investment at the end
of the period which assumes the application of the percentage rate of total
return. Total return also may be calculated by using the net asset value per
share at the beginning of the period instead of the maximum offering price per
share at the beginning of the period for Investor shares.
The Fund may also advertise the yield on a Class of shares. The Fund's
yield is calculated by dividing a Class of shares' annualized net investment
income per share during a recent 30-day (or one month) period by the maximum
public offering price per Class of such share on the last day of that period.
Since yields fluctuate, yield data cannot necessarily be used to compare an
investment in a Class of shares with bank deposits, savings accounts, and
similar investment alternatives which often provide an agreed-upon or
guaranteed fixed yield for a stated period of time.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a basis
for comparison with other investments or other investment companies using a
different method of calculating performance.
The Fund may compare the performance of its shares with various
industry standards of performance including Lipper Analytical Services, Inc.
ratings, Standard and Poor's 500 Composite Stock Price Index, the Consumer
Price Index, and the Dow Jones Industrial Average. Performance rankings as
reported in Changing Times, Business Week, Institutional Investor, The Wall
Street Journal, Mutual Fund Forecaster, No Load Investor, Money Magazine,
Morningstar Mutual Fund Values, U.S. News and World Report, Forbes, Fortune,
Barron's and similar publications may also be used in comparing the Fund's
performance. Furthermore, the Fund may quote its shares' total returns and
yields in advertisements or in shareholder reports. The Fund may also advertise
non-standardized performance information, such as total return for periods
other than those required to be shown or cumulative performance data. The Fund
may advertise a quotation of yield or other similar quotation demonstrating the
income earned or distributions made by the Fund.
GENERAL INFORMATION
The Company was organized as a Massachusetts business trust under the
laws of the Commonwealth of Massachusetts on March 30, 1979 under the name The
Boston Company Fund, changed its name effective April 4, 1994 to The Laurel
Funds Trust, and then changed its name to The Dreyfus/Laurel Funds Trust on
October 17, 1994. The Company is registered with the SEC under the 1940 Act, as
a managed investment company. The Fund is a portfolio of the Company. The
Fund's shares are classified into three classes-- Institutional Shares,
Investor shares and Class R. The Company's Agreement and Declaration of Trust
permits the Board of Trustees to create an unlimited number of investment
portfolios (each a "fund").
Each share (regardless of Class) has one vote. All shares of all funds
(and Classes thereof) vote together as a single Class, except as to any matter
for which a separate vote of any fund or Class is required by the 1940 Act, and
except as to any matter which affects the interests of one or more particular
funds or Classes, in which case only the shareholders of the affected fund or
Classes are entitled to vote, each as a separate Class. Only holders of
Investor shares will be entitled to vote on matters submitted to shareholders
pertaining to the Distribution Plan relating to that Class.
23
At December 6, 1994, Mellon Bank, Dreyfus' parent, owned of record
through its direct and indirect subsidiaries more than 25% of the Fund's
outstanding voting shares, and is deemed, under the 1940 Act, to be a
controlling shareholder.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Trustees or the
appointment of auditors. However, pursuant to the Fund's By-Laws, the holders
of at least 10% of the shares outstanding and entitled to vote may require the
Fund to hold a special meeting of shareholders for purposes of removing a
Trustee from office and for any other purpose. Fund shareholders may remove a
Trustee by the affirmative vote of a majority of the Fund's outstanding voting
shares. In addition, the Board of Trustees will call a meeting of shareholders
for the purpose of electing Trustees if, at any time, less than a majority of
the Trustees then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and will send
you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York, 11556-0144, or by calling toll free
1-800-645-6561.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
24
(c) 1994, Dreyfus Service Corporation 312/392P1121994
