- --------------------------------------------------------------------------
PROSPECTUS MAY 1, 1995
PREMIER MANAGED INCOME FUND
- --------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND, (THE "FUND"), FORMERLY CALLED THE
"LAUREL MANAGED INCOME 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 FUND THAT SEEKS HIGH CURRENT INCOME
CONSISTENT WITH WHAT IS BELIEVED TO BE PRUDENT RISK OF CAPITAL PRIMARILY
THROUGH INVESTMENTS IN INVESTMENT-GRADE CORPORATE AND U.S. GOVERNMENT
OBLIGATIONS AND IN OBLIGATIONS HAVING MATURITIES OF 10 YEARS OR LESS.
BY THIS PROSPECTUS, THE FUND IS OFFERING FOUR CLASSES OF SHARES _
CLASS A, CLASS B, CLASS C AND CLASS R.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER. THE
DREYFUS CORPORATION IS REFERRED TO AS "DREYFUS."
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 MAY 1, 1995,
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 1-800-554-4611. 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.
ALL MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
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, N.A.
("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.
- --------------------------------------------------------------------------
(Continued from Page 1)
CLASS A SHARES ARE SUBJECT TO A SALES CHARGE IMPOSED AT THE TIME OF
PURCHASE. (CLASS A SHARES OF THE FUND WERE FORMERLY CALLED INVESTOR SHARES.)
CLASS B SHARES ARE SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE IMPOSED ON
REDEMPTIONS MADE WITHIN SIX YEARS OF PURCHASE. CLASS C SHARES ARE SUBJECT TO
A 1.00% CONTINGENT DEFERRED SALES CHARGE IMPOSED ON REDEMPTIONS MADE WITHIN
THE FIRST YEAR OF PURCHASE. CLASS R SHARES ARE SOLD PRIMARILY TO BANK TRUST
DEPARTMENTS AND OTHER FINANCIAL SERVICE PROVIDERS (INCLUDING MELLON BANK AND
ITS AFFILIATES) ("BANKS") ACTING ON BEHALF OF CUSTOMERS HAVING A QUALIFIED
TRUST OR INVESTMENT ACCOUNT OR RELATIONSHIP AT SUCH INSTITUTION, OR TO
CUSTOMERS WHO HAVE RECEIVED AND HOLD SHARES OF THE FUND DISTRIBUTED TO THEM
BY VIRTUE OF SUCH AN ACCOUNT OR RELATIONSHIP. (CLASS R SHARES OF THE FUND
WERE FORMERLY CALLED TRUST SHARES.) OTHER DIFFERENCES BETWEEN THE CLASSES
INCLUDE THE SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS AND
CERTAIN VOTING RIGHTS, AS DESCRIBED HEREIN. THESE ALTERNATIVES ARE OFFERED SO
AN INVESTOR MAY CHOOSE THE METHOD OF PURCHASING SHARES THAT IS MOST
BENEFICIAL GIVEN THE AMOUNT OF PURCHASE, THE LENGTH OF TIME THE INVESTOR
EXPECTS TO HOLD THE SHARES AND OTHER CIRCUMSTANCES.
YOU CAN PURCHASE OR REDEEM FUND SHARES BY TELEPHONE USING THE TELETRAN
SFER PRIVILEGE.
- --------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Expense Summary................................... 3
Financial Highlights.............................. 4
Alternative Purchase Methods...................... 6
Description of the Fund........................... 7
Management of the Fund............................ 13
How to Buy Fund Shares............................ 14
Shareholder Services.............................. 19
How to Redeem Fund Shares......................... 23
Distribution Plans (Class A Plan and Class B and Class C Plas) 26
Dividends, Other Distributions and Taxes.......... 27
Performance Information........................... 29
General Information............................... 30
Page 2
<TABLE>
<CAPTION>
EXPENSE SUMMARY
CLASS A CLASS B CLASS C CLASS R
<S> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)..................... 4.50% none none none
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)....... none 4.00% 1.00% none
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fee....................................... 0.70% 0.70% 0.70% 0.70%
12b-1 Fee1........................................... 0.25% 1.00% 1.00% none
Other Expenses2 ..................................... 0.00% 0.00% 0.00% 0.00%
------ ------ ------- --------
Total Fund Operating Expenses........................ 0.95% 1.70% 1.70% 0.70%
EXAMPLE
You would pay the following expenses on a $1,000 investment,
assuming (1) a 5% annual return and (2) except where noted,
redemption at the end of each time period:
1 YEAR $54 $57/17 3 $27/173 $7
3 YEARS $74 $84/54 3 $54 $22
5 YEARS $95 $112/92 3 $92 $39
10 YEARS $156 $201 $201 $87
- ----------------------------------
1 See "Distribution Plans (Class A Plan and Class B and Class C Plans)" for a
description of the Fund's Distribution Plan and Service Plan for Class A, B
and C shares.
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 .02% of the Fund's net
assets. (See "Management of the Fund.")
3 Assuming no redemption of shares.
</TABLE>
- --------------------------------------------------------------------------
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. Long-term investors in Class A, B or C 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 foreg
oing table does not reflect any fee waivers or expense reimbursement
arrangements that may be in effect. Certain Agents (as defined herein) 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 Plans (Class A Plan and
Class B and Class C Plans)."
The Company understands that banks, brokers, dealers or other
financial institutions (including Mellon Bank and its affiliates)
(collectively "Agents") may charge fees to their clients who are owners of
the Fund's Class A, B or C shares for various services provided in connection
with a client's account. These fees would be in addition to any amounts
received by an Agent under its Selling Agreement ("Agreement") with Premier
Mutual Fund Services, Inc. (the "Distributor"). The Agreement requires each
Agent to disclose to its clients any compensation payable to such Agent by
the Distributor and any other compensation payable by the client for various
services provided in connection with their accounts.
Page 3
FINANCIAL HIGHLIGHTS
The tables below are based upon a single Class A or Class R Share
outstanding through each fiscal year and should be read in conjunction with
the financial statements and related notes that appear in the Fund's Annual
Report dated December 31, 1994 which is incorporated by reference in the SAI.
The financial statements included in the Fund's Annual Report dated December
31, 1994 have been audited by KPMG Peat Marwick LLP, independent accountants,
whose report appears in the Fund's Annual Report. Financial Highlights for
Class B, Class C and Class R shares are not presented because no shares had
been available to the public as of December 31, 1994*
<TABLE>
<CAPTION>
PREMIER MANAGED INCOME FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR.*
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/94** 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**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $11.38 $11.45 $11.41 $10.55 $11.12 $11.43 $11.29 $11.91 $11.80 $10.60 $10.60
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment
income # 0.69 0.78 0.87 0.86 0.93 0.98 1.01 1.20 0.86 1.20 1.03
Net realized and
unrealized gains/(loss)
on investments (1.26) 0.83 0.10 0.86 (0.47) (0.36) 0.09 (0.52) 0.28 0.99 0.14
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations (0.57) 1.61 0.97 1.72 0.46 0.62 1.10 0.68 1.14 2.19 1.17
Less distributions:
Distributions from net
investment income (0.69) (0.75) (0.87) (0.86) (1.03) (0.93) (0.96) (1.20) (0.96) (0.99) (1.17)
Distributions in excess
of net investment
income -- -- (0.06) -- -- -- -- -- -- -- --
Distributions from net
realized gains -- (0.57) -- -- -- -- -- (0.10) (0.07) -- --
Distributions in excess
of net realized gains
on investments -- (0.36) -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions (0.69) (1.68) (0.93) (0.86) (1.03) (0.93) (0.96) (1.30) (1.03) (0.99) (1.17)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value,
end of year $10.12 $11.38 $11.45 $11.41 $10.55 $11.12 $11.43 $11.29 $11.91 $11.80 $10.60
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Return + (5.14)% 14.54% 8.77% 17.03% 4.40% 5.56% 10.05% 5.96% 10.09% 21.83% 12.00%
====== ======= ====== ====== ====== ====== ====== ======= ====== ======= ======
Ratios/Supplemental data:
Net assets, end of period
(in 000's) $79,548 $58,052 $98,207 $84,203 $71,132 $83,912 $65,105 $51,765 $49,272 $16,721 $6,318
Ratio of expenses
to average
net assets +++ 0.98% 1.14% 1.02% 1.13% 1.19% 1.15% 1.14% 0.94% 0.88% 1.48% 1.50%
Ratio of net income
to average
net assets 6.32% 6.55% 7.58% 7.91% 8.65% 8.76% 8.81% 10.30% 10.01% 10.77% 10.02%
Portfolio turnover
rate ++++ 270% 333% 216% 119% 183% 142% 139% 306% 71% 173% -_
- ------------------------------
* On February 1, 1993 existing shares of the Fund were designated the Retail
Class, and the Fund began offering the Institutional Class and the Investment
Class of shares. Effective April 4, 1994 the Retail and Institutional Classes
were reclassified as a single class of shares known as Investor shares. On
October 17, 1994, the Investor shares were redesignated Class A shares. The
amounts shown for the year ended December 31, 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 (now Class A) Share outstanding from
April 4, 1994 to December 31, 1994. The Financial Highlights for the year
ended December 31, 1993 and prior years are based upon a Retail Share
outstanding.
** Prior to April 4, 1994, The Boston Company Advisors, Inc. served as the
Fund's investment adviser. From April 4, 1994 through October 16, 1994, Mellon
Bank served as the Fund's investment manager. Effective October 17, 1994,
Dreyfus began serving as the Fund's investment manager.
+ Total return represents aggregate total return for the periods indicated
and does not reflect any applicable sales charge.
+++ Without the voluntary reimbursement of expenses and/or waiver of fees by
the investment adviser and/or transfer agent and/or distributor, the ratio of
expenses to average net assets for the years ended December 31, 1994 and 1993
would have been 0.99% and 1.27%, respectively.
++++ In accordance with the SEC'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 voluntary waiver of fees or reimbursement
of expenses by the investment adviser for the year ended December 31, 1994
was $0.69. Net investment income before waiver of fees and/or reimbursement
of expenses by the investment adviser and/or transfer agent and/or distributor
for the year ended December 31, 1993 was $0.77.
## Per share amounts have been calculated using the average share method,
which more appropriately presents the per share data for this year since
the use of the undistributed method did not accord with results of
operations.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PREMIER MANAGED INCOME FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
YEAR PERIOD
ENDED ENDED
12/31/94** 12/31/93*##
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, beginning of period................................................. $11.38 $11.62
------ -------
Income from investment operations:
Net investment income #............................................................ 0.72 0.74
Net Realized and unrealized gains/(loss) on investments............................ (1.26) 0.67
------ -------
Total from investment.............................................................. (0.54) 1.41
Less Distributions:
Distributions from net investment income............................................. (0.72) (0.71)
Distributions from net realized gains................................................ -- (0.61)
Distributions in excess of net realized gains........................................ -- (0.33)
------ -------
Total Distributions.................................................................. (0.72) (1.65)
Net Asset Value, end of period....................................................... $10.12 $11.38
------ -------
Total Return +......................................................................... (4.88)% 12.59%
Ratios/Supplemental data:
Net Assets, end of period (in 000's)............................................... $9,588 $11,338
Ratios of expenses to average net assets +++.......................................... 0.71% 0.83%++
Ratios of net investment income to average net assets.............................. 6.59% 6.86%++
Portfolio turnover rate.............................................................. 270% 333%
- --------------------
* On February 1, 1993 the Fund commenced selling Investment Class shares.
Effective April 4,1994 the Investment Class was redesignated as the Trust
Shares. On October 17, 1994, the Trust Shares were redesignated Class R
shares.
** Prior to April 4, 1994, The Boston Company Advisors, Inc. served as the
Fund's investment adviser. From April 4, 1994 through October 16, 1994, Mellon
Bank served as the Fund's investment manager. Effective October 17, 1994,
Dreyfus began serving as the Fund's investment manager.
*** Annualized.
+ Total return represents aggregate total return for the periods indicated.
++ Without the voluntary reimbursement of expenses and/or waiver of fees by
the investment adviser and transfer agent, the annualized ratio of operating
expenses to average net assets would have been 0.72% and 0.87% for the year
ended December 31, 1994 and the period ended December 31, 1993, respectively.
# Net investment income before voluntary waiver of fees and/or reimbursement
of expenses by the investment adviser for the year ended December 31, 1994
was $0.71. Net investment income before waiver of fees and/or reimbursement
of expenses by the investment adviser, transfer agent and distributor for
the period ended December 31, 1993 was $0.74.
## Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for this
period since the use of the undistributed method did not accord with
results of operations.
</TABLE>
Page 5
ALTERNATIVE PURCHASE METHODS
The Fund offers you four methods of purchasing Fund shares; you may
choose the Class of shares that best suits your needs, given the amount of
your purchase, the length of time you expect to hold your shares and any
other relevant circumstances. Each Fund share represents an identical pro
rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a maximum
initial sales charge of 4.50% of the public offering price imposed at the
time of purchase. The initial sales charge may be reduced or waived for
certain purchases. See "How to Buy Fund Shares _ Class A shares." These
shares are subject to an annual 12b-1 fee at the rate of 0.25 of 1% of the
value of the average daily net assets of Class A. See "Distribution Plan _
Class A shares."
Class B shares are sold at net asset value per share with no initial
sales charge at the time of purchase; as a result, the entire purchase price
is immediately invested in the Fund. Class B shares are subject to a maximum
4% contingent deferred sales charge ("CDSC"), which is assessed only if you
redeem Class B shares within six years of purchase. See "How to Buy Fund
Shares _ Class B shares" and "How to Redeem Fund Shares _ Contingent
Deferred Sales Charge _ Class B shares." These shares also are subject to an
annual distribution fee at the rate of 0.75 of 1% of the value of the average
daily net assets of Class B. In addition, Class B shares are subject to an
annual service fee at the rate of 0.25 of 1% of the value of the average
daily net assets of Class B. See "Distribution and Service Plans _ Class B
and C." The distribution fee paid by Class B will cause such Class to have a
higher expense ratio and to pay lower dividends than Class A. Approximately
six years after the date of purchase, Class B shares automatically will
convert to Class A shares, based on the relative net asset values for shares
of each such Class, and will no longer be subject to the distribution fee.
(Such conversion is subject to suspension by the Board of Trustees if adverse
tax consequences might result.) Class B shares that have been acquired
through the reinvestment of dividends and other distributions will be
converted on a pro rata basis together with other Class B shares, in the
proportion that a shareholder's Class B shares converting to Class A shares
bears to the total Class B shares not acquired through the reinvestment of
dividends and other distributions.
Class C shares are subject to a 1% CDSC, which is assessed only if
you redeem Class C shares within one year of purchase. See "How to Redeem
Fund Shares _ Class C shares." These shares also are subject to an annual
distribution fee at the rate of 0.75 of 1% of the value of the average daily
net assets of Class C. Class C shares are also subject to an annual service
fee at the rate of 0.25 of 1% of the value of the average daily net assets of
Class C. See "Distribution and Service Plans _ Class B and C." The
distribution fee paid by Class C will cause such Class to have a higher
expense ratio and to pay lower dividends than Class A.
Class R shares generally may not be purchased directly by
individuals, although eligible institutions may purchase Class R shares for
accounts maintained by individuals. Class R shares are sold at net asset
value per share primarily to bank trust departments and other financial
service providers (including Mellon Bank and its affiliates) ("Banks") acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, or to customers who have received and hold s
hares of the Fund distributed to them by virtue of such an account or
relationship. Class A, Class B and Class C shares are primarily sold to
retail investors by Agents that have entered into Selling Agreements with the
Distributor.
The decision as to which Class of shares is more beneficial to you
depends on the amount and the intended length of your investment. You should
consider whether, during the anticipated life of your investment in the Fund,
the accumulated distribution fee and CDSC, if any, on Class B or Class C
shares would be less than the initial sales charge on Class A shares
purchased at the same time, and to
Page 6
what extent, if any, such differential would be offset by the return of
Class A shares. Additionally, investors qualifying for reduced initial sales
charges who expect to maintain their investment for an extended period of
time might consider purchasing Class A shares because the accumulated
continuing distribution fees on Class B or Class C shares may exceed the
initial sales charge on Class A shares during the life of the investment.
Finally, you should consider the effect of the CDSC period and any conversion
rights of the Classes in the context of your own investment time frame. For
example, while Class C shares have a shorter CDSC period than Class B shares,
Class C shares do not have a conversion feature and, therefore, are subject
to an ongoing distribution fee. Thus, Class B shares may be more attractive
than Class C shares to investors with longer term investment outlooks.
Generally, Class A shares may be more appropriate for investors who invest
$1,000,000 or more in Fund shares, but will not be appropriate for investors
who invest less than $50,000 in Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund is a diversified fund that seeks high current income
consistent with what is believed to be prudent risk of capital through
investments in the following types of securities: corporate debt obligations,
such as bonds, debentures, obligations convertible into common stocks and
money market instruments; preferred stocks and obligations issued or
guaranteed by the U.S. Government and its agencies and instrumentalities.
MANAGEMENT POLICIES
Under normal market conditions, (1) at least 65% of the Fund's total
assets will be invested in U.S. Government Securities and in investment-grade
corporate debt obligations rated within the four highest ratings of Moody's
Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Group
("S&P") or in unrated obligations of comparable quality; and (2) at least 65%
of the Fund's total assets will be invested in debt obligations having
maturities of 10 years or less. It should be noted that obligations rated in
the lowest of the top four ratings (Baa by Moody's or BBB by S&P) are
considered to have some speculative characteristics. Unrated securities will
be considered of investment-grade if deemed by Dreyfus to be comparable in
quality to instruments so rated, or if other outstanding obligations of the
issuers of such securities are rated Baa/BBB or better. (See "Appendix.") A
discussion of the Moody's and S&P rating categories is contained in the SAI.
The Fund may also invest up to 35% of its total assets in obligations
rated below the four highest ratings of Moody's or S&P, with no minimum
rating required. Such securities, which are considered to have speculative
characteristics, include securities rated in the lowest rating categories of
Moody's or S&P (commonly known as "junk bonds") which are extremely
speculative and may be in default with respect to payment of principal or
interest.
The Fund may also invest up to 35% of its total assets in
fixed-income obligations having maturities longer than 10 years, up to 25% of
its total assets in convertible debt obligations and preferred stocks, and up
to 20% of its total assets in securities of foreign issuers, including
foreign governments. The Fund will not invest in common stocks, and any
common stocks received through conversion of convertible debt obligations
will be sold in an orderly manner. Changes in interest rates will affect the
value of the Fund's portfolio investments.
When, in the opinion of Dreyfus, a "defensive" investment posture is
warranted, the Fund is permitted to invest temporarily and without limitation
in high-grade, short-term money market instruments, consisting exclusively of
U.S. Government Securities, bank certificates of deposit and time deposits,
bankers' acceptances, prime commercial paper, and high-grade, short-term
corporate securities and repurchase agreements with respect to these
instruments. To this extent, the Fund may not achieve its investment
objective.
Page 7
Bank certificates of deposit and bankers' acceptances in which the
Fund may invest are limited to U.S. dollar-denominated instruments of
domestic banks, including their branches located outside the United States
and of domestic branches of foreign banks. In addition, the Fund may invest
in U.S. dollar-denominated, non-negotiable time deposits issued by foreign
branches of domestic banks and London branches of foreign banks; and
negotiable certificates of deposit issued by London branches of foreign banks.
The foregoing investments may be made provided that the bank has capital,
surplus and undivided profits (as of the date of its most recently published
annual financial statements) in excess of $100 million as of the date of
investment. Investments in obligations of foreign branches of domestic banks,
foreign banks, and domestic branches of foreign banks involve risks that are
different from investments in securities of domestic banks.
U.S. Government Securities in which the Fund may invest include
obligations issued or guaranteed as to both principal and interest by the
U.S. Government or backed by the full faith and credit of the United States.
In addition to direct obligations of the U.S. Treasury, these include
securities issued or guaranteed by the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of the United States, Small
Business Administration, Government National Mortgage Association, General Ser
vices Administration and Maritime Administration.
The Fund is permitted to enter into repurchase agreements with
respect to U.S. Government Securities, to purchase portfolio securities on a
when-issued basis, to purchase or sell portfolio securities for delayed
delivery, and to lend its portfolio securities. In addition, the Fund may
invest up to 25% of its total assets in securities representing interests in
pools of assets such as mortgage loans, motor vehicle installment purchase
obligations and credit card receivables ("Asset Backed Securities"), which
include classes of obligations collateralized by mortgage loans or mortgage
pass-through certificates ("collateralized mortgage obligations"). Investment
in the Fund should not be considered a complete investment program.
Investors should be aware that even though interest-bearing
securities are investments which promise a stable stream of income, the
prices of such securities are inversely affected by changes in interest rates
and, therefore, are subject to the risk of market price fluctuations. The
values of fixed-income securities also may be affected by changes in the
credit rating or financial condition of the issuing entities. The Fund's net
asset value generally will not be stable and should fluctuate based upon chang
es in the value of the Fund's portfolio securities. Securities in which the
Fund will invest may earn a higher level of current income than certain
shorter-term or higher quality securities which generally have greater
liquidity, less market risk and less fluctuations in market value.
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.
LENDING OF PORTFOLIO SECURITIES. From time to time, the Fund may lend
portfolio securities to brokers, dealers and other financial organizations.
Such loans will not exceed 33 1/3% 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.
WHEN-ISSUED SECURITIES AND DELAYED DELIVERY TRANSACTIONS. To secure
advantageous prices or yields, the Fund may purchase U.S. Government
Securities on a when-issued basis or may purchase or sell securities for
delayed delivery. In such transactions, delivery of the securities occurs
beyond the normal settlement periods, but no payment or delivery is made by
the Fund prior to the actual delivery or payment by the other party to the
transaction. The purchase of securities on a when-issued or delayed delivery
basis involves the risk that, as a result of an increase in yields available
in the market-
Page 8
place, the value of the securities purchased will decline prior to the
settlement date. The sale of securities for delayed delivery involves
the risk that the prices available in the market on the delivery date may be
greater than those obtained in the sale transaction. The Fund will establish
a segregated account consisting of cash, U.S. Government Securities or other
high-grade debt obligations in an amount equal to the amounts of its
when-issued and delayed delivery commitments.
MASTER/FEEDER OPTION. The Company may in the future seek to achieve
the Fund's investment objective by investing all of the Fund's 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 Company's Board of Trustees determine it to be in the best interest of
the Fund and its shareholders. In making that determination, the Board of
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 Board of 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.
CERTAIN PORTFOLIO SECURITIES
ASSET-BACKED SECURITIES_GENERAL. The Fund may invest in Asset-Backed
Securities arising through the grouping by governmental, government-related
and private organizations of loans, receivables and other assets originated
by various lenders. Interests in pools of these assets differ from other
forms of debt securities, which normally provide for periodic payment of
interest in fixed amounts with principal paid at maturity or specified call
dates. Instead, Asset-Backed Securities provide periodic payments which
generally consist of both interest and principal payments. The estimated life
of an Asset-Backed Security varies with the prepayment experience with
respect to the underlying debt instruments. The rate of such prepayments, and
hence the life of an Asset-Backed Security, will be primarily a function of
current market interest rates, although other economic and demographic
factors may be involved. For example, falling interest rates generally result
in an increase in the rate of prepayments of mortgage loans while rising
interest rates generally decrease the rate of prepayments. An acceleration in
prepayments in response to sharply falling interest rates will shorten the
security's average maturity and limit the potential appreciation in the
security's value relative to a conventional debt security. Consequently,
Asset-Backed Securities are not as effective in locking in high long-term
yields. Conversely, in periods of sharply rising rates, prepayments generally
slow, increasing the security's average life and its potential for price
depreciation.
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. For this purpose, an issuer's
location is determined based on such factors as its country of organization,
the primary trading market for its securities, and the location of its
assets, personnel, sales, and earnings. A security is located in a particular
country if: (1) the security is issued or guaranteed by the government of the
country or any of its agencies, political subdivisions or instrumentalities
or has its primary trading market in that country; or (2) the issuer is
organized under the laws of the country, derives at least 50% of its revenues
or profits from goods sold, investments made or services performed in the
country, or has at least 50% of its assets located in the country. 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
Page 9
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. The
Board will consider 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 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 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 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 generally are 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.
MORTGAGE-BACKED SECURITIES. The mortgage-backed securities in which
the Fund will invest represents pools of mortgage loans assembled for sale to
investors by various governmental agencies and
Page 10
government-related organizations, such as Government National Mortgage
Association ("GNMA"), Federal National Mortgage Association ("FNMA") and
Federal Home Loan Mortgage Corporation ("FHLMC"), as well as by private
issuers such as commercial banks, savings and loan institutions, mortgage
bankers and private mortgage insurance companies. Mortgage-backed securities
provide a monthly payment consisting of interest and principal payments.
Additional payment may be made out of unscheduled repayments of principal
resulting from the sale of the underlying residential property, refinancing
or foreclosure, net of fees or costs that may be incurred. Prepayments of
principal on mortgage-backed securities may tend to increase due to
refinancing of mortgages as interest rates decline. Prompt payment of
principal and interest on GNMA mortgage pass-through certificates is backed
by the full faith and credit of the United States. FNMA guaranteed mortgage
pass-through certificates and FHLMC participation certificates are solely the
obligations of those entities but are supported by the discretionary authority
of the U.S. Government to purchase the agencies' obligations. Mortgage pools
created by private organizations generally offer a higher rate of interest
than governmental and government-related pools because there are no direct or
indirect guarantees of payments in the former pools. Timely payment of
interest and principal in these pools, however, may be supported by various
forms of private insurance or guarantees, including individual loan, title,
pool and hazard insurance. There can be no assurance that the private insurers
can meet their obligations under the policies.
Collateralized mortgage obligations ("CMOs") are a type of bond
secured by an underlying pool of mortgages or mortgage pass-through
certificates that are structured to direct payments on underlying collateral
to different series or classes of the obligations. CMO classes may be
specially structured in a manner that provides any of a wide variety of
investment characteristics, such as yield, effective maturity and interest
rate sensitivity. CMO structuring is accomplished by in effect stripping out
portions of the cash flows (comprised of principal and interest payments) on
the underlying mortgage assets and prioritizing the payments of those cash
flows. In the most extreme case, one class will be a "principal-only" (PO)
security, the holder of which receives the principal payments made by the
underlying mortgage-backed security, while the holder of the "interest-only"
(IO) security receives interest payments from the same underlying security.
CMOs may be structured in other ways that, based on mathematical modeling or
similar techniques, is expected to provide certain results. As market
conditions change, however, and particularly during periods of rapid or
unanticipated changes in market interest rates, the attractiveness of a CMO
class, and the ability of a structure to provide the anticipated investment
characteristics, may be significantly reduced. Such changes can result in
volatility in the market value, and in some instances reduced liquidity, of
the CMO class.
Inverse floaters are instruments whose interest rates bear an inverse
relationship to the interest rate of another security or the value of an
index. Changes in the interest rate on the other security or index inversely
affect the residual interest rate paid on the inverse floater, with the
result that the inverse floater's price will be considerably more volatile
than that of a fixed-rate bond. For example, an issuer may decide to issue
two variable rate instruments instead of a single long-term, fixed-rate bond.
The interest rate on one instrument reflects short-term interest rates, while
the interest rate on the other instrument (the inverse floater) reflects the
approximate rate the issuer would have paid on a fixed-rate bond, multiplied
by two, minus the interest rate paid on the short-term instrument. The market
for inverse floaters is relatively new.
To the extent that the Fund purchases mortgage-related securities at
a premium, mortgage foreclosures and prepayments of principal by mortgagors
(which may be made at any time without penalty) may result in some loss of
the Fund's principal investment to the extent of the premium paid. The yield
of the Fund that invests in mortgage-related securities may be affected by
reinvestment of prepayments at higher or lower rates than the original
investment.
Page 11
NON-MORTGAGE BACKED SECURITIES. The Fund may also invest in
non-mortgage backed securities including interests in pools of receivables,
such as motor vehicle installment purchase obligations and credit card
receivables. Such securities are generally issued as pass-through
certificates, which represent undivided fractional ownership interests in the
underlying pools of assets. Such securities may also be debt instruments,
which are also known as collateralized obligations and are generally issued
as the debt of a special purpose entity organized solely for the purpose of
owning such assets and issuing such debt. Non-mortgage backed securities are
not issued or guaranteed by the U.S. Government or its agencies or
instrumentalities; however, the payment of principal and interest on such
obligations may be guaranteed up to certain amounts and for a certain time
period by a letter of credit issued by a financial institution (such as a
bank or insurance company) unaffiliated with the issuers of such securities.
Non-mortgage backed securities will be purchased by the Fund only when such
securities are readily marketable and generally will have remaining estimated
lives at the time of purchase of 5 years or less.
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 under "Certain Portfolio Securities _ Illiquid
Securities."
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 are
permissible under the Investment Company Act of 1940, as amended (the "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 high current income 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, indirectly 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.
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.
Page 12
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 March
31, 1995, Dreyfus managed or administered approximately $72 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 objectives,
policies and restrictions.
The Fund is managed by two portfolio managers, Almond G. Goduti, Jr.
and Arthur J. MacBride, III. Mr. Goduti and Mr. MacBride are officers of
Mellon Bank. Each individual has been employed by Dreyfus as a portfolio
manager of the Fund since October 17, 1994.
Almond Goduti, Vice President of The Boston Company Advisors, Inc.,
is a member of the Fixed Income Strategy Committee and is also responsible
for the taxable fixed income investment portfolio of Boston Safe Deposit and
Trust Company. Mr. Goduti began his career with The Boston Company in 1984 as
Portfolio Manager in the Personal Trust Division. He holds a B.S. in Finance
and Computer Science from Boston College.
Prior to joining The Boston Company in 1988, Mr. MacBride was a
Principal and the National Sales Manager at Manufacturers Hanover Securities
Corporation, where he was responsible for the sale of all fixed income
securities. Previously, he did corporate finance/underwriting work in both
the U.S. and Europe. In London and Toronto, he worked extensively on the
Eurobond Market (coupon and currency swaps). He is a graduate from Franklin
and Marshall College and holds an MBA from Fordham University.
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. 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 $193 billion in assets as of
December 31, 1994, including approximately $70 billion in mutual fund assets.
As of December 31, 1994, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
approximately $654 billion in assets, including approximately $74 billion in
mutual fund assets.
Under the Investment Management Agreement, the Fund has agreed to pay
Dreyfus a monthly fee at the annual rate of 0.70 of 1% of the value of the
Fund's average daily net assets. Dreyfus pays all of the Fund's expenses,
except brokerage fees, 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
Page 13
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 additional 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) a portion of the investment management fees payable by the Fund.
For the fiscal period from January 1, 1994 to April 3, 1994, the Fund paid
its investment adviser, The Boston Company Advisors, Inc. ("Boston Advisors")
(an indirect wholly-owned subsidiary of Mellon Bank Corporation), 0.55%
(annualized) of its average daily net assets in investment advisory fees
(net of fees waived and expenses reimbursed), under the Fund's previous
investment advisory contract (such contract covered only the provision of
investment advisory and certain specified administrative services). For the
period from April 4, 1994 through the fiscal year ended December 31, 1994,
the Fund paid Mellon Bank or Dreyfus 0.70% (annualized) of its average daily
net assets in investment management fees, less fees and expenses of the
non-interested Trustees (including counsel fees).
For the fiscal year ended December 31, 1994, total operating expenses
(excluding Rule 12b-1 fees) (net of fees waived and expenses reimbursed) of
each class of the Fund were 0.77% and 0.71% (annualized) of the average daily
net assets of Class A and Class R, respectively.
In addition, Class A, B and C shares may be subject to certain
distribution and service fees. See "Distribution Plans (Class A Plan and
Class B and Class C Plans)."
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 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
FDIDistribution Services, Inc., a provider of mutual fund administration
services, which in turn is a subsidiary of FDI Holdings, Inc., 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, PA
15258, is the Fund's Custodian. The Fund's Transfer and Dividend Disbursing
Agent is The Shareholder Services Group, Inc. (the "Transfer Agent"), a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode Island
02940-9671. 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 the Fund.
HOW TO BUY FUND SHARES
GENERAL _ Class A shares, Class B shares and Class C shares may be
purchased only by clients of certain financial institutions (which may
include banks), securities dealers ("Selected Dealers") and Agents, except
that full-time or part-time employees or directors of Dreyfus or any of its
affiliates or subsidiaries, 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 may purchase Class A shares directly through the Distributor.
Subsequent purchases may be sent directly to the Transfer Agent or your
Agent.
Page 14
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, or to customers who have received and hold shares of the
Fund distributed to them by virtue of such an account or relationship. In
addition, holders of Class R shares of the Fund who have held their shares
since April 4, 1994, may continue to purchase Class R shares of the Fund,
whether or not they otherwise would be eligible to do so. Class R shares may
be purchased for a retirement plan only by a custodian, trustee, investment
manager or other entity authorized to act on behalf of such plan.
Institutions effecting transactions in Class R shares for the accounts of
their clients may charge their clients direct fees in connection with such
transactions.
When purchasing Fund shares, you must specify which Class is being
purchased. Stock certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Fund reserves the right to
reject any purchase order.
Agents may receive different levels of compensation for selling
different Classes of shares. Management understands that some Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus, and, to the extent permitted by applicable
regulatory authority, may charge their clients direct fees which would be in
addition to any amounts which might be received under the Distribution and
Service Plans. Each Agent has agreed to transmit to its clients a schedule of
such fees. You should consult your Agent in this regard.
The minimum initial investment is $1,000. Subsequent investments must
be at least $100. However, the minimum initial investment for
Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only
one participant is $750, with no minimum 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. The Fund reserves the right to offer Fund shares
without regard to minimum purchase requirements to employees participating in
certain qualified or non-qualified employee benefit plans or other programs
where contributions or account information can be transmitted in a manner and
form acceptable to the Fund. The Fund reserves the right to vary further the
initial and subsequent investment minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amount that may be contributed to certain
qualified or non-qualified employee benefit plans or other programs,
including pension, profit-sharing and other deferred compensation plans,
whether established by corporations, partnerships, non-profit entities or
state and local governments ("Retirement Plans"). These limitations apply
with respect to participants at the plan level and, therefore, do not
directly affect the amount that may be invested in the Fund by a retirement
plan. Participants and plan sponsors should consult their tax advisers for
details.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"Premier Managed Income Fund." Payments to open new accounts which are mailed
should be sent to Premier Managed Income Fund, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application indicating
which Class of shares is being purchased. For subsequent investments, your
Fund account number should appear on the check and an investment slip should
be enclosed and sent to Premier Managed Income Fund, P.O. Box 105, Newark,
New Jersey 07101-0105. Neither initial nor subsequent investments should be
made by third party check.
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to Boston Safe Deposit & Trust Co., together with the
applicable Class' DDA # as shown below, for purchase of Fund shares in your
name:
Page 15
DDA# 044660 Premier Managed Income Fund/Class A shares;
DDA# 044709 Premier Managed Income Fund/Class B shares;
DDA# 044717 Premier Managed Income Fund/Class C shares;
DDA# 044725 Premier Managed Income Fund/Class R shares.
The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, you should call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. 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 Boston Safe Deposit and Trust Co. with instructions to credit
your Fund account. The instructions must specify your Fund account
registration and Fund account number PRECEDED BY THE DIGITS:
"4370" Premier Managed Income Fund/Class A shares;
"4380" Premier Managed Income Fund/Class B shares;
"4390" Premier Managed Income Fund/Class C shares;
"4400" Premier Managed Income Fund/Class R shares.
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 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 shares of each Class of the Fund 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, except as otherwise noted,
listed or traded on a stock exchange, are valued at the latest sale price. If
no sale is reported, the mean of the latest bid and asked
Page 16
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 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 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 Transfer Agent 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 purchase orders made
through the TELETRANSFER Privilege which are effective one business day after
your call). Investment, exchange and redemption requests received after the
close of the NYSE are generally effective on and receive the share price
determined on the next business day.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the NYSE on any business day and transmitted
to the Distributor or its designee by the close of its business day (normally
5:15 p.m., New York time) will be based on the public offering price per
share determined as of the close of trading on the floor of the NYSE on that
day. Otherwise, the orders will be based on the next determined public
offering price. It is the dealer's responsibility to transmit orders so that
they will be received by the Distributor or its designee before the close of
its business day.
The NAV of most shares of investment portfolios advised by Dreyfus is
published in leading newspapers daily. The NAV of any Fund may also be
obtained by calling 1-800-645-6561.
CLASS A SHARES _ The public offering price of Class A shares is the
net asset value per share of that class plus a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
__________________________________
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
_____________________ ________________ _____________ _____________________
<S> <C> <C> <C>
Less than $50,000.................... 4.50 4.70 4.25
$50,000 to less than $100,000........ 4.00 4.20 3.75
$100,000 to less than $250,000....... 3.00 3.10 2.75
$250,000 to less than $500,000....... 2.50 2.60 2.25
$500,000 to less than $1,000,000..... 2.00 2.00 1.75
</TABLE>
There is no initial sales charge on purchases of $1,000,000 or more
of Class A shares. However, if you purchase Class A shares without an initial
sales charge as part of an investment of at least $1,000,000 and redeem all or
a portion of those shares within two years after purchase, a CDSC of 1.00%
will be imposed at the time of redemption. The terms contained in the section
of the Fund's Prospectus entitled "How to Redeem Fund Shares _ Contingent
Deferred Sales Charge _ Class B" (other than the amount of the CDSC and its
time periods) are applicable to the Class A shares subject to a CDSC. Letter
of Intent and Right of Accumulation apply to such purchases of Class A shares.
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with the
Distributor pertaining to the sale of Fund shares (or
Page 17
which otherwise have a brokerage related or clearing arrangement with an NASD
member firm or financial institution with respect to the sale of such shares)
may purchase Class A shares for themselves directly or pursuant to an employee
benefit plan or other program, or for their spouses or minor children, at NAV,
provided that they have furnished the Distributor with such information as it
may request from time to time in order to verify eligibility for this
privilege. This privilege also applies to full-time employees of financial
institutions affiliated with NASD member firms whose full-time employees are
eligible to purchase Class A shares at NAV. In addition, Class A shares are
offered at NAV to 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.
Class A shares will be offered at NAV without a sales load to
employees participating in Eligible Benefit Plans. Class A shares also may be
purchased (including by exchange) at NAV without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution proceeds from
a qualified retirement plan or a Dreyfus-sponsored 403(b)(7) plan, provided
that, at the time of such distribution, such qualified retirement plan or
Dreyfus-sponsored 403(b)(7) plan (a) met the requirements of an Eligible Benef
it Plan and all or a portion of such plan's assets were invested in funds in
the Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans, or (b) invested all of its assets in certain funds
in the Premier Family of Funds or the Dreyfus Family of Funds or certain
other products made available by the Distributor to such plans.
Holders of Class A accounts of the Fund as of December 19, 1994 may
continue to purchase Class A shares of the Fund at NAV. However, investments
by such holders in other funds advised by Dreyfus will be subject to the
applicable front end sales load.
Class A shares may be purchased at NAV through certain broker-dealers
and other financial institutions which have entered into an agreement with
the Distributor, which includes a requirement that such shares be sold for
the benefit of clients participating in a "wrap account" or a similar program
under which such clients pay a fee to such broker-dealer or other financial
institution.
The dealer reallowance may be changed from time to time but will
remain the same for all dealers. The Distributor, at its expense, may provide
additional promotional incentives to dealers that sell shares of funds
advised by Dreyfus which are sold with a sales load, such as Class A shares.
In some instances, those incentives may be offered only to certain dealers
who have sold or may sell significant amounts of shares. Dealers receive a
larger percentage of the sales load from the Distributor than they receive
for selling most other funds.
CLASS B SHARES _ The public offering price for Class B shares is the NAV per
share of that Class. No initial sales charge is imposed at the time of
purchase. A CDSC is imposed, however, on certain redemptions of Class B
shares as described under "How to Redeem Fund Shares." The Distributor
compensates certain Agents for selling Class B shares at the time of purchase
from the Distributor's own assets. The proceeds of the CDSC and the
distribution fee, in part, are used to defray these expenses.
CLASS C SHARES _ The public offering price for Class C shares is the NAV per
share of that Class. No initial sales charge is imposed at the time of
purchase. A CDSC, however, is imposed on redemptions of Class C shares made
within the first year of purchase. See "Class B Shares" above and "How to
Redeem Fund Shares."
CLASS R SHARES _ The public offering price for Class R shares is the NAV per
share of that Class.
RIGHT OF ACCUMULATION _ CLASS A SHARES Reduced sales loads apply to any
purchase of Class A shares, shares of other funds in the Premier Family of
Funds, shares of certain other funds advised by Dreyfus which are sold with a
sales load and shares acquired by a previous exchange of such shares
(hereinafter referred to as "Eligible Funds"), by you and any related
"purchaser" as defined in the SAI, where the aggregate investment, including
such purchase, is $50,000 or more. If, for example, you pre-
Page 18
viously purchased and still hold Class A shares, or shares of any other
Eligible Fund or combination thereof, with an aggregate current market value
of $40,000 and subsequently purchase Class A shares or shares of an Eligible
Fund having a current value of $20,000, the sales load applicable to the
subsequent purchase would be reduced to 4.00% of the offering price. All
present holdings of Eligible Funds may be combined to determine the current
offering price of the aggregate investment in ascertaining the sales load
applicable to each subsequent purchase.
To qualify for reduced sales loads, at the time of purchase you or
your Agent must notify the Distributor if orders are made by wire, or the
Transfer Agent if orders are made by mail. The reduced sales load is subject
to confirmation of your holdings through a check of appropriate records.
TELETRANSFER PRIVILEGE _ You may purchase 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 a filed Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account designated in one of
these documents and your Fund account. Only a bank account maintained in a
domestic financial institution which is an 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 TELETRANSFER Privilege, you may request a
TELETRANSFER purchase of Fund 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 Agents and some Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus. You should consult your Agent in this regard.
FUND EXCHANGES
You may purchase, in exchange for shares of a Class, shares of the
same or comparable 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. WITH RESPECT TO CLASS R SHARES HELD BY RETIREMENT PLANS,
EXCHANGES MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN
ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
To request an exchange, your 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 Shareholder Services Form, also available by calling 1-800-645-6561.
If you previously 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, 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:
Page 19
Telephone Exchange Privilege, TELETRANSFER Privilege and the dividends and
distributions payment option (except for Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined NAV; however, a sales
load may be charged with respect to exchanges of Class A shares into funds
sold with a sales load. No CDSC will be imposed on Class B or C shares at the
time of an exchange; however, Class B or C shares acquired through an
exchange will be subject to the higher CDSC applicable to the exchanged or
acquired shares. The CDSC applicable on redemption of the acquired Class B or
C shares will be calculated from the date of the initial purchase of the
Class B or C shares exchanged, as the case may be. If you are exchanging
Class A shares into a fund that charges a sales load, you may qualify for
share prices which do not include the sales load or which reflect a reduced
sales load, if the shares of the fund from which you are exchanging were: (a)
purchased with a sales load, (b) acquired by a previous exchange from shares
purchased with a sales load, or (c) acquired through reinvestment of
dividends or other distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of the exchange your 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 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.
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of the same class of other funds in the Premier Family of
Funds or certain other funds in the Dreyfus Family of Funds of which you are
currently an investor. WITH RESPECT TO CLASS R SHARES HELD BY RETIREMENT
PLANS, EXCHANGES PURSUANT TO THE AUTO-EXCHANGE PRIVILEGE MAY BE MADE ONLY
BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth day of the month according to the schedule you have
selected. Shares will be exchanged at the then-current NAV; however, a sales
load may be charged with respect to exchanges of Class A shares into funds
sold with a sales load. No CDSC will be imposed on Class B or C shares at the
time of an exchange; however, Class B or C shares acquired through an
exchange will be subject to the higher CDSC applicable to the exchanged or
acquired shares. The CDSC applicable on redemption of the acquired Class B or
C shares will be calculated from the date of the initial purchase of the Class
B or C shares exchanged, as the case may be. See "Shareholder Services" in
the SAI. The right to exercise this Privilege may be modified or canceled by
the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to Premier Managed
Income Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. 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
Page 20
funds in the Premier Family of Funds or the Dreyfus Family of Funds eligible
to participate in this Privilege, or to obtain an Auto-Exchange Authorization
Form, please call toll free 1-800-645-6561.
AUTOMATIC ASSET BUILDER
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 an
AUTOMATIC Asset Builder account, you must file an authorization form with the
Transfer Agent. You may obtain the necessary authorization form by calling
1-800-645-6561. You may cancel your participation in this privilege or change
the amount of purchase at any time by mailing written notification to Premier
Managed Income Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587, 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.
DIVIDEND OPTIONS
Dividend Sweep enables you to invest automatically dividends or
dividends and capital gain distributions, if any, paid by the Fund in shares
of the same class of another fund in the Premier Family of Funds or the
Dreyfus Family of Funds of which you are an investor. Shares of the other
fund will be purchased at the then-current NAV; however, a sales load may be
charged with respect to investments in shares of a fund sold with a sales
load. If you are investing in a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which reflect
a reduced sales load. If you are investing in a fund or class that charges a
CDSC, the shares purchased will be subject on redemption to the CDSC, if any,
applicable to the purchased shares. See "Shareholder Services" in the SAI.
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
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to Premier Managed Income
Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these Privileges is effective three business
days following receipt. These Privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. The Fund may modify or terminate
these Privileges at any time or charge a service fee. No such fee currently
is contemplated. Shares held under Keogh Plans, IRAs or other retirement
plans are not eligible for Dividend Sweep.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Government Direct Deposit Privilege enables you to purchase Fund
shares (minimum of $100 and maximum of $50,000 per transaction) by having
Federal salary, Social Security, or certain veterans', military or other
payments from the Federal government automatically deposited into your Fund
account. You may deposit as much of such payments as you elect. You should
consider whether Direct Deposit of your entire payment into a fund with
fluctuating NAV, such as the Fund, is appropriate for you. To enroll in Govern
ment 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
Page 21
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.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account.
Particular Retirement Plans, including Dreyfus sponsored retirement
plans, may permit certain participants to establish an automatic withdrawal
plan from such Retirement Plans. Participants should consult their Retirement
Plan sponsor and tax adviser for details. Such a withdrawal plan is different
than the Automatic Withdrawal Plan. An application for the Automatic
Withdrawal Plan can be obtained by calling 1-800-645-6561. The Automatic
Withdrawal Plan may be ended at any time by the shareholder, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
Class B and C shares withdrawn pursuant to the Automatic Withdrawal
Plan will be subject to any applicable CDSC. Purchases of additional Class A
shares where the sales load is imposed concurrently with withdrawals of Class
A shares generally are undesirable.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
LETTER OF INTENT-CLASS A SHARES
By signing a Letter of Intent form, available from the Distributor,
you become eligible for the reduced sales load applicable to the total number
of Eligible Fund shares purchased in a 13-month period pursuant to the terms
and conditions set forth in the Letter of Intent. A minimum initial purchase
of $5,000 is required. To compute the applicable sales load, the offering
price of shares you hold (on the date of submission of the Letter of Intent)
in any Eligible Fund that may be used toward "Right of Accumulation" benefits
described above may be used as a credit toward completion of the Letter of
Intent. However, the reduced sales load will be applied only to new
purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated in
the Letter of Intent for payment of a higher sales load if you do not
purchase the full amount indicated in the Letter of Intent. The escrow will
be released when you fulfill the terms of the Letter of Intent by purchasing
the specified amount. If your purchases qualify for a further sales load
reduction, the sales load will be adjusted to reflect your total purchase at
the end of 13 months. If total purchases are less than the amount specified,
you will be requested to remit an amount equal to the difference between the
sales load actually paid and the sales load applicable to the aggregate
purchases actually made. If such remittance is not received within 20 days,
the Transfer Agent, as attorney-in-fact pursuant to the terms of the Letter
of Intent, will redeem an appropriate number of Class A shares of the Fund
held in escrow to realize the difference. Signing a Letter of Intent does not
bind you to purchase, or the Fund to sell, the full amount indicated at the
sales load in effect at the time of signing, but you must complete the
intended purchase to obtain the reduced sales load. At the time you purchase
Class A shares, you must indicate your intention to do so under a Letter of
Intent.
Page 22
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 NAV 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 Agent.
The Fund imposes no charges (other than any applicable CDSC) when
shares are redeemed directly through the Distributor. 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 NAV.
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 TELETRANSFER PRIVILEGE OR THROUGH
AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST
TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER PURCHASE OR
AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
TELETRANSFER PURCHASE OR THE 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.
CONTINGENT DEFERRED SALES CHARGE_CLASS B SHARES _ A CDSC payable to the
Distributor is imposed on any redemption of Class B shares which reduces the
current NAV of your Class B shares to an amount which is lower than the
dollar amount of all payments by you for the purchase of Class B shares of
the Fund held by you at the time of redemption. No CDSC will be imposed to
the extent that the NAV of the Class B shares redeemed does not exceed (i)
the current NAV of Class B shares acquired through reinvestment of dividends
or capital gain distributions, plus (ii) increases in the NAV of your Class B
shares above the dollar amount of all your payments for the purchase of Class
B shares held by you at the time of redemption.
If the aggregate value of Class B shares redeemed has declined below
their original cost as a result of the Fund's performance, a CDSC may be
applied to the then-current NAV rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years from the time you purchased the Class B
shares until the time of redemption of such shares. Solely for purposes of
determining the number of years from the time of any payment for the purchase
of Class B shares, all payments during a month will be aggregated and deemed
to have been made on the first day of the month. The following table sets
forth the rates of the CDSC:
Page 23
<TABLE>
<CAPTION>
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
__________ _________________________
<S> <C> <C>
First............................................................ 4.00
Second........................................................... 4.00
Third............................................................ 3.00
Fourth........................................................... 3.00
Fifth............................................................ 2.00
Sixth............................................................ 1.00
</TABLE>
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible
rate. It will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends and
distributions; then of amounts representing the increase in NAV of Class B
shares above the total amount of payments for the purchase of Class B shares
made during the preceding six years; then of amounts representing the cost of
shares purchased six years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of time within
the applicable six-year period.
For example, assume an investor purchased 100 shares at $10 share for
a cost of $1,000. Subsequently, the shareholder acquired five additional
shares through dividend reinvestment. During the second year after the
purchase the investor decided to redeem $500 of his or her investment.
Assuming at the time of the redemption the NAV had appreciated to $12 per
share, the value of the investor's shares would be $1,260 (105 shares at $12
per share). The CDSC would not be applied to the value of the reinvested
dividend shares and the amount which represents appreciation ($260).
Therefore, $240 of the $500 redemption proceeds ($500 minus $260) would be
charged at a rate of 4% (the applicable rate in the second year after
purchase) for a total CDSC of $9.60.
CONTINGENT DEFERRED SALES CHARGE_CLASS C SHARES _ A CDSC of 1.00%
payable to the Distributor is imposed on any redemption of Class C shares
within one year of the date of purchase. The basis for calculating the
payment of any such CDSC will be the method used in calculating the CDSC for
Class B shares. See "Contingent Deferred Sales Charge_Class B Shares" above.
WAIVER OF CDSC _ The CDSC applicable to Class B and Class C shares
will be waived in connection with (a) redemptions made within one year after
the death or disability, as defined in Section 72(m)(7) of the Code, of the
shareholder, (b) redemptions by employees participating in Eligible Benefit
Plans, (c) redemptions as a result of a combination of any investment company
with the Fund by merger, acquisition of assets or otherwise, (d) a
distribution following retirement under a tax-deferred retirement plan or
upon attaining age 70-1/2 in the case of an IRA or Keogh plan or custodial
account pursuant to Section 403(b) of the Code, and (e) redemptions by such
shareholders as the SEC or its staff may permit. If the Company's Trustees
determine to discontinue the waiver of the CDSC, the disclosure in the Fund's
prospectus will be revised appropriately. Any Fund shares subject to a CDSC
which were purchased prior to the termination of such waiver will have the
CDSC waived as provided in the Fund's prospectus at the time of the purchase
of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you
must notify the Transfer Agent or your Agent must notify the Distributor. Any
such qualification is subject to confirmation of your entitlement.
PROCEDURES _ You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, or through the TELETRANSFER
Privilege or, if you are a client of a Selected Dealer, through the Selected
Dealer. If you have given your Agent authority to instruct the Transfer Agent
to redeem shares and to credit the proceeds of such redemptions to a
designated account at your Agent, you may redeem shares only in this manner
and in accordance with the regular redemption procedure described below. If
Page 24
you wish to use the other redemption methods described below, you must
arrange with your Agent for delivery of the required application(s) to the
Transfer Agent. Other redemption procedures may be in effect for clients of
certain Agents and institutions. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities.
You may redeem 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 a telephone redemption
privilege or Telephone Exchange Privilege, which is granted automatically
unless you refuse it, you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you, or a
representative of your 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 TELETRANSFER 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
TELETRANSFER redemption had been used. During the delay, the Fund's NAV may
fluctuate.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to Premier Managed Income Fund,
P.O. Box 6587, Providence, Rhode Island 02940-6587. 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.
TELETRANSFER PRIVILEGE. 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 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 TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of Fund shares by telephoning 1-800-221-4060 or, if
calling from overseas, 1-401-455-3306. Shares held under
Page 25
Keogh Plans, IRAs or other retirement plans, and shares issued in certificate
form, are not eligible for this privilege.
REDEMPTION THROUGH A SELECTED DEALER. If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected Dealer. If
the Selected Dealer transmits the redemption request so that it is received
by the Transfer Agent prior to the close of trading on the floor of the NYSE
(currently 4:00 p.m., New York time), the redemption request will be
effective on that day. If a redemption request is received by the Transfer
Agent after the close of trading on the floor of the NYSE, the redemption
request will be effective on the next business day. It is the responsibility
of the Selected Dealer to transmit a request so that it is received in a
timely manner. The proceeds of the redemption are credited to your account
with the Selected Dealer. See "How to Buy Fund Shares" for a discussion of
additional conditions or fees that may be imposed upon redemption.
In addition, the Distributor will accept orders from Selected Dealers
with which it has sales agreements for the repurchase of shares held by
shareholders. Repurchase orders received by dealers by the close of trading
on the floor of the NYSE on any business day and transmitted to the
Distributor or its designee prior to the close of its business day (normally
5:15 p.m., New York time) are effected at the price determined as of the
close of trading on the floor of the NYSE on that day. Otherwise, the shares
will be redeemed at the next determined NAV. It is the responsibility of the
Selected Dealer to transmit orders on a timely basis. The Selected Dealer may
charge the shareholder a fee for executing the order. This repurchase
arrangement is discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE _ Class A Shares. Upon written request, you
may reinvest up to the number of Class A shares you have redeemed, within 30
days of redemption, at the then-prevailing NAV without a sales load, or
reinstate your account for the purpose of exercising the Exchange Privilege.
The Reinvestment Privilege may be exercised only once.
DISTRIBUTION PLANS
(CLASS A PLAN AND CLASS B AND CLASS C PLANS)
Class A shares are subject to a Distribution Plan adopted pursuant to
Rule 12b-1 under the 1940 Act ("Rule 12b-1"). Class B and C shares are
subject to a Distribution Plan and a Service Plan, each adopted pursuant to
Rule 12b-1. Potential investors should read this Prospectus in light of the
terms governing Agreements with their Agents. An 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.
DISTRIBUTION PLAN _ CLASS A SHARES. The Class A shares of the Fund bear some
of the cost of selling those shares under the Distribution Plan (the "Plan").
The Plan allows the Fund to spend annually up to 0.25% of its average daily
net assets attributable to Class A shares to compensate Dreyfus Service
Corporation, an affiliate of Dreyfus, for shareholder servicing activities
and expenses primarily intended to result in the sale of Class A shares of
the Fund and the Distributor for shareholder servicing activities. The Plan
allows the Distributor to make payments from the Rule 12b-1 fees it collects
from the Fund to compensate Agents that have entered into Selling Agreements
("Agreements") with the Distributor. Under the Agreements, the Agents are
obligated to provide distribution related services with regard to the Fund
and/or shareholder services to the Agent's clients that own Class A shares of
the Fund.
The Fund and the Distributor may suspend or reduce payments under the
Plan at any time, and payments are subject to the continuation of the Fund's
Plan and the Agreements described above. From time to time, the 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.
DISTRIBUTION AND SERVICE PLANS _ CLASS B AND C _ Under a Distribution Plan
adopted pursuant to Rule 12b-1, the Fund pays the Distributor for
distributing the Fund's Class B and C shares at an aggregate annual rate of
.75 of 1% of the value of the average daily net assets of Class B and C.
Under a Service Plan adopted pursuant to Rule 12b-1, the Fund pays Dreyfus
Service Corporation or the
Page 26
Distributor for the provision of certain services to the holders of Class B
and C shares a fee at the annual rate of .25 of 1% of the value of the average
daily net assets of Class B and C. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other information,
and providing services related to the maintenance of such shareholder
accounts. With regard to such services, each Agent is required to disclose to
its clients any compensation payable to it by the Fund and any other
compensation payable by their clients in connection with the investment of
their assets in Class B and C shares. The Distributor may pay one or more
Service Agents in respect of distribution and other services for these Classes
of shares. The Distributor determines the amounts, if any, to be paid to
Agents under the Distribution and Service Plans and the basis on which such
payments are made. The fees payable under the Distribution and Service Plans
are payable without regard to actual expenses incurred.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund declares daily and pays dividends monthly from its net
investment income, if any, 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 NAV. All expenses are accrued daily and deducted
before declaration of dividends to investors. Shares purchased on a day on
which the Fund calculates its NAV will begin to accrue dividends on that day,
and redemption orders effected on any particular day will receive dividends
declared only on through the business day prior to the day of redemption.
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 attributa
ble solely to a particular Class will be borne exclusively by that Class.
Class B and C shares will receive lower per share dividends than Class A
shares which will receive lower per share dividends than Class R shares,
because of the higher expenses borne by the relevant Class. See "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
Page 27
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.
The Code provides for the "carryover" of some or all of the sales
load imposed on Class A shares if (1) an investor redeems those shares or
exchanges those shares for shares of another fund advised or administered by
Dreyfus within 91 days of purchase and (2) in the case of a redemption,
acquires other Fund Class A shares through exercise of the Reinvestment
Privilege or, in the case of an exchange, such other fund reduces or
eliminates its otherwise applicable sales load for the purpose of the
exchange. In this case, the amount of the sales load charged the investor for
the original Class A shares, up to the amount of the reduction of the sales
load pursuant to the Reinvestment Privilege or on the exchange, as the case
may be, is not included in the basis of such shares for purposes of computing
gain or loss on the redemption or the exchange, and instead is added to the
basis of the fund shares received pursuant to the Reinvestment Privilege or
the exchange.
Dividends paid by the Fund to qualified Retirement Plans ordinarily
will not be subject to taxation until the proceeds are distributed from 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.
Page 28
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may be
calculated on the basis of average annual total return and/or total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made by
the Fund during the measuring period were reinvested in shares of the same
Class. These figures also take into account any applicable service and
distribution fees. As a result, at any given time, the performance of Class B
and C should be expected to be lower than that of Class A and the performance
of Class A, B and C should be expected to be lower than that of Class R.
Performance for each Class will be calculated separately.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment was purchased with an initial
payment of $1,000 and that the investment was redeemed at the end of a stated
period of time, after giving effect to the reinvestment of dividends and
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. Advertisem
ents 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.
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 NAV (or
maximum offering price in the case of Class A shares) 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 NAV at the beginning of the period
instead of the maximum offering price per share at the beginning of the
period for Class A shares or without giving effect to any applicable CDSC at
the end of the period for Class B or C shares. Calculations based on the NAV
per share do not reflect the deduction of the sales load on the Fund's Class
A shares, which, if reflected, would reduce the performance quoted.
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 NAV (or maximum public offering price in the case of Class A shares) 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 and the Lehman Government/Corporate Index. Performance rankings as
reported in Changing Times, Business Week, Institutional Investor, The Wall
Street Journal, IBC/Donoghue's Money Fund Report, 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,
Page 29
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 as an
open-end management investment company, commonly known as a mutual fund. The
Fund's shares are classified into four classes _ Class A, Class B, Class C
and Class R. The Company's 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 a fund
(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 Class A, B or C shares, as the case may be, will be entitled to
vote on matters submitted to shareholders pertaining to its Distribution and
Service Plan relating to that Class.
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, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Trustee from office and
for any other purpose. Company shareholders may remove a Trustee by the
affirmative vote of two-thirds of the Company'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.
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.
Page 30
PROSPECTUS
PREMIER MANAGED
INCOME FUND
(LION LOGO)
-------------------------
Managed by
The Dreyfus Corporation
-------------------------
Copy Rights 1995 Dreyfus Service Corporation
BMIFp2050195
