File No. 811-524
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 103 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 103 [ X ]
(Check appropriate box or boxes.)
THE DREYFUS/LAUREL FUNDS TRUST
___________________________________________________
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
John E. Pelletier
Secretary
The Dreyfus/Laurel Funds Trust
Municipal Funds
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
----
X on May 1, 1997 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940, Registrant's Rule 24f-2 Notice for fiscal
year ended December 31, 1996 was filed on February 27, 1997.
DREYFUS CORE VALUE FUND
Investor, Class R and Institutional Shares
DREYFUS PREMIER MANAGED INCOME FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
________________________________________________________
Items in
Part A of Prospectus
Form N-1A Caption Caption
________ _______ __________
1 Cover Page Cover Page
Expense Summary
2 Synopsis Expense Summary
3 Condensed Financial Financial Highlights
Information
4 General Description of Investment Objective and
Registrant Policies; Further Information
About The Fund
5 Management of the Fund Further Information About
The Funds; Management
5(a) Management's Discussion Management's Discussion
of Fund's Performance of Fund's Performance
6 Capital Stock and Cover Page; Investor
Other Securities Line; Distribution; Taxes;
7 Purchase of Securities Expense Summary;
Being Offered Alternative
Purchase Methods; Special
Shareholder Services; How to
invest in The Dreyfus/Laurel
Funds; Distribution and Service
Plans; How to Exchange your
Investment From One Fund to
Another;
8 Redemption or How to Redeem Shares
Repurchase
9 Pending Legal N.A.
Proceedings
DREYFUS CORE VALUE FUND
Investor, Class R and Institutional Shares
DREYFUS PREMIER MANAGED INCOME FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (Continued)
________________________________________________________
Items in
Part C of
Form N-1A
_________
22 Calculation of Performance Data
Performance Data
23 Financial Statements Financial Statements
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-15
31 Management Services C-15
32 Undertakings C-15
- ------------------------------------------------------------------------------
PROSPECTUS May 1, 1997
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
DREYFUS CORE VALUE FUND (THE "FUND") IS A SEPARATE, DIVERSIFIED
PORTFOLIO OF THE DREYFUS/LAUREL FUNDS TRUST, AN OPEN-END MANAGEMENT
INVESTMENT COMPANY (THE "COMPANY"), KNOWN AS A MUTUAL FUND. THE FUND SEEKS
LONG-TERM GROWTH OF CAPITAL, WITH CURRENT INCOME AS A SECONDARY OBJECTIVE,
PRIMARILY THROUGH EQUITY INVESTMENTS, SUCH AS COMMON STOCKS AND SECURITIES
CONVERTIBLE INTO COMMON STOCK.
BY THIS PROSPECTUS, THE FUND IS OFFERING INVESTOR SHARES AND CLASS R
SHARES. INVESTOR SHARES AND CLASS R SHARES ARE IDENTICAL, EXCEPT AS TO THE
SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS R SHARES ARE
SOLD PRIMARILY TO BANK TRUST DEPARTMENTS AND OTHER FINANCIAL SERVICE
PROVIDERS (INCLUDING MELLON BANK, N.A. ("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. INVESTOR SHARES ARE SOLD PRIMARILY TO RETAIL
INVESTORS BY THE FUND'S DISTRIBUTOR AND BY BANKS, SECURITIES BROKERS OR
DEALERS AND OTHER FINANCIAL INSTITUTIONS (INCLUDING MELLON BANK AND ITS
AFFILIATES) (COLLECTIVELY, "AGENTS") THAT HAVE ENTERED INTO A SELLING
AGREEMENT ("AGREEMENT") WITH PREMIER MUTUAL FUND SERVICES, INC. (THE
"DISTRIBUTOR").
SHARES OF THE FUND ARE SOLD WITHOUT A SALES LOAD. INVESTOR SHARES OF
THE FUND ARE SUBJECT TO DISTRIBUTION AND SHAREHOLDER SERVICING FEES.
SHARES OF THE FUND MAY BE PURCHASED OR REDEEMED BY TELEPHONE USING
THE DREYFUS TELETRANSFER PRIVILEGE.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER. THE
DREYFUS CORPORATION IS REFERRED TO AS "DREYFUS."
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.
THE STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1997 ("SAI"),
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. THE SEC MAINTAINS
A WEB SITE (HTTP://WWW. SEC.GOV) THAT CONTAINS THE SAI, MATERIAL INCORPORATED
BY REFERENCE, AND OTHER INFORMATION REGARDING THE FUND. FOR A FREE COPY OF
THE SAI, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW
YORK, 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR
144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS AN AFFILIATE OF
MELLON BANK 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.
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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.
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Table of Contents
Page
Expense Summary................................. 4
Financial Highlights............................ 5
Description of the Fund......................... 7
Management of the Fund.......................... 11
How to Buy Fund Shares.......................... 13
Shareholder Services............................ 15
How to Redeem Fund Shares....................... 19
Distribution Plan .............................. 21
Dividends, Other Distributions and Taxes........ 22
Performance Information......................... 23
General Information............................. 24
Page 2
[This Page Intentionally Left Blank]
Page 3
<TABLE>
<CAPTION>
EXPENSE SUMMARY
Shareholder Transaction Expenses: Investor Shares Class R Shares
--------------- ---------------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases...... none none
Maximum Sales Load Imposed on Reinvestments.. none none
Deferred Sales Load.......................... none none
Redemption Fee............................... none none
Exchange Fee................................. none none
Estimated Annual Fund Operating Expenses:
(as a percentage of net assets)
Management Fee............................... 0.90% 0.90%
12b-1 Fee1................................... 0.25% none
Other Expenses2.............................. 0.00% 0.00%
------ ------
Total Fund Operating Expenses................ 1.15% 0.90%
Example:
You would pay the following expenses
on a $1,000 investment, assuming (1) a 5% annual
return and (2) redemption at the end of each
time period: Investor Shares Class R Shares
--------------- ---------------
1 Year $ 12 $ 9
3 Years $ 37 $ 29
5 Years $ 63 $ 50
10 Years $140 $111
1 See "Distribution Plan" for a description of the Fund's Distribution Plan for the Investor 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 less
than .01% of the Fund's net assets. (See "Management of the Fund.")
</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 Investor shares could pay more in 12b-1 fees
than the economic equivalent of paying the maximum front-end sales charges
applicable to mutual funds sold by members of the National Association of
Securities Dealers, Inc. The information in the foregoing table does not
reflect any fee waivers or expense reimbursements that may be in effect.
Certain Agents may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the foregoing
table. See "Management of the Fund," "How to Buy Fund Shares" and
"Distribution Plan."
The Company understands that Agents (including Mellon Bank and its
affiliates) may charge fees to their clients who are owners of Fund 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
Agreement with 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 clients for various services provided
in connection with their accounts.
In addition to Investor shares and Class R shares, the Fund offers
Institutional shares to those shareholders who have held shares of a
predecessor class of the Fund since April 4, 1994. Institutional shares are
offered through a separate prospectus. Institutional shares are subject to a
12b-1 fee at an annual rate of up to 0.15% of average daily net assets.
Estimated total annual fund operating expenses for Institutional shares are
1.05% of average daily net assets.
Page 4
FINANCIAL HIGHLIGHTS
The tables below are based upon a single Investor or Class R share
outstanding throughout each fiscal year or period and should be read in
conjunction with the financial statements, related notes and report of
independent auditors that appear in the Fund's Annual Report dated December
31, 1996 and which are incorporated by reference in the SAI. The financial
statements included in the Fund's Annual Report for the year ended December
31, 1996 have been audited by KPMG Peat Marwick LLP, independent auditors.
Further information about, and management's discussion of, the Fund's
performance is contained in the Fund's Annual Report, which may be obtained
without charge by writing to the address or calling the number set forth on
the cover page of this Prospectus.
<TABLE>
<CAPTION>
DREYFUS CORE VALUE FUND
For an Investor Share outstanding throughout each year.(1)
Year Year Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
12/31/96** 12/31/95 12/31/94### 12/31/93## 12/31/92 12/31/91 12/31/90## 12/31/89 12/31/88 12/31/87
---------- -------- ----------- ---------- -------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year...... $30.13 $24.56 $27.80 $25.46 $27.40 $23.20 $27.49 $28.65 $26.07 $32.40
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income. 0.31 0.41 0.42 0.31 0.36 0.39 0.55 0.87 0.54 0.76
Net realized and unrealized
gain/(loss) on investments 6.03 8.24 (0.29) 3.86 0.70 4.88 (4.23) 6.12 4.51 (0.41)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 6.34 8.65 0.13 4.17 1.06 5.27 (3.68) 6.99 5.05 0.35
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Distributions from net
investment income... (0.30) (0.45) (0.40) (0.30) (0.36) (0.50) (0.55) (0.55) (0.59) (1.32)
Distributions from net realized
gains on investments (5.77) (2.63) (2.97) (1.53) (2.64) (0.57) (0.06) (7.60) (1.88) (5.36)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions... (6.07) (3.08) (3.37) (1.83) (3.00) (1.07) (0.61) (8.15) (2.47) (6.68)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value,
end of year $30.40 $30.13 $24.56 $27.80 $25.46 $27.40 $23.20 $27.49 $28.65 $26.07
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return...... 21.44% 35.56% 0.38% 16.51% 4.03% 22.87% (13.44)% 24.96% 19.54% 0.27%
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Ratios to average net assets/
Supplemental Data:
Net assets,
end of year (000's) $486,816 $401,674 $317,868 $349,813 $423,286 $508,971 $474,998 $640,116 $542,510 $431,630
Ratio of expenses to
average net assets.. 1.13% 1.13% 1.11% 1.15% 1.22% 1.20% 1.26% 1.23% 1.31% 0.95%
Ratio of net investment
income to average
net assets.. 0.96% 1.43% 1.47% 1.13% 1.33% 1.61% 1.96% 2.75% 2.14% 2.16%
Decrease reflected in
above expense ratios
due to undertakings
by Dreyfus 0.02% 0.02% .0.01% .0.01% -- -- -- -- -- --
Portfolio turnover rate 88.46% 54.42% 73% 75% 66% 157% 180% 111% 24% 46%
Average commission
rate paid* $.0522 -- -- -- -- -- -- -- -- --
- -----------------
(1) On February 1, 1993, the Fund began offering Institutional Class shares. Shares outstanding prior to February 1, 1993 were
redesignated as Retail Class shares. Effective April 4, 1994, the Retail
shares were redesignated as Investor Shares.
+ 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/or investment manager, the annualized ratio of
operating expenses to average net assets for the years ended December 31,
1994 and 1993 would have been 1.12% and 1.16%, respectively.
# Without the voluntary waiver of fees and/or reimbursement of expenses by the investment adviser and/or
investment manager, net investment income for the years ended December 31,
1994 and 1993 would have been $0.42 and $0.31, respectively.
## Per share amounts have been calculated using the monthly average share method, which more appropriately
presents per share data for this year because the use of the undistributed
method did not accord with results of operations.
### 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.
* For fiscal years beginning January 1, 1996, the Fund is required to disclose its average commission rate paid per share for
purchases and sales of investment securities.
** For the fiscal year ended December 31, 1996, Dreyfus voluntarily waived its
management fee by 0.02% of the value of the Fund's average daily net assets.
Page 5
FINANCIAL HIGHLIGHTS (CONTINUED)
DREYFUS CORE VALUE FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.
Year Year Period
Ended Ended Ended
12/31/96## 12/31/95 12/31/94*#
---------- ---------- ----------
Net asset value, beginning of period $30.18 $24.56 $28.45
------- ------- -------
Income from investment operations:
Net investment income 0.36 0.62 0.29
Net realized and unrealized gain (loss) on investments 6.08 8.16 (0.83)
------- ------- -------
Total from investment operations 6.44 8.78 (0.54)
------- ------- -------
Less distributions:
Distributions from net investment income (0.39) (0.53) (0.38)
Distributions from net realized gains on investments (5.77) (2.63) (2.97)
------- ------- -------
Total Distributions (6.16) (3.16) (3.35)
------- ------- -------
Net asset value, end of period $30.46 $30.18 $24.56
======= ======= =======
Total return 21.74% 36.05% (2.31)%**
------- ------- -------
Ratios to average net assets / supplemental data:
Net Assets, end of period (in 000's) $11,618 $185 $1,070
Ratio of expenses to average net assets 0.88% 0.88% 0.35%**
Ratio of net investment income to average net assets 1.23% 1.93% 0.70%**
Decrease reflected in above expense ratios
due to undertaking by Dreyfus 0.02% 0.02% 0.01%**
Portfolio turnover rate 88.46% 54.42% 73%
Average commission rate paid***. $.0522 -- --
* On August 4, 1994, the Fund commenced selling Trust shares. Effective October 17, 1994, the Trust shares were
redesignated as Class R shares.
** Not 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 manager, the ratio of expenses to
average net assets for the year ended December 31, 1994 would have been 0.88%.
# 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.
*** For fiscal years beginning January 1, 1996, the Fund is required to disclose its
average commission rate paid per share for purchases and sales of
investment securities.
## For the fiscal year ended December 31, 1996, Dreyfus
voluntarily waived its management fee by 0.02% of the value of the
Fund's average daily net assets.
</TABLE>
Page 6
DESCRIPTION OF THE FUND
GENERAL
By this Prospectus, the Fund is offering Investor shares and Class R
shares (Class R shares of the Fund were formerly called Trust Shares).
Investor shares and Class R shares are identical, except as to the services
offered to and the expenses borne by each Class. Class R shares are sold
primarily to Banks acting on behalf of customers having a qualified trust or
investment account or relationship at such institution, or to customers who
have received and hold shares of the Fund distributed to them by virtue of
such an account or relationship. Investor shares are sold primarily to retail
investors by the Distributor and by Agents that have entered into an
Agreement with the Distributor. If shares of the Fund are held in an account
at a Bank or with an Agent, such Bank or Agent may require you to place all
Fund purchase, exchange and redemption orders through them. All Banks and
Agents have agreed to transmit transaction requests to the Fund's transfer
agent or to the Distributor. Distribution and shareholder servicing fees paid
by Investor shares will cause Investor shares to have a higher expense ratio
and pay lower dividends than Class R shares.
INVESTMENT OBJECTIVE
The Fund is a diversified fund that seeks long-term growth of
capital, with current income as a secondary objective, primarily through
equity investments, such as common stocks and securities convertible into
common stocks.
MANAGEMENT POLICIES
Securities are selected for the Fund based on a quantitative and
qualitative study of trends in industries and companies, earning power,
growth features and other investment criteria. Major emphasis is placed on
industries and issuers that are considered by Dreyfus to have characteristics
that reflect attractive valuations as compared to the stock market as a whole
such as a low price to earnings ratio, a low ratio of market price to book
value and better than average cash flows. Dreyfus also focuses on other
"value" oriented investment criteria. In general, the Fund's investments are
broadly diversified over a number of industries and, as a matter of operating
policy, the Fund will not invest more than 25% of its total assets in any one
industry.
Up to 20% of the Fund's total assets may be invested in foreign
securities. Such investments will be made principally in foreign equity
securities. The Fund may invest up to 5% of its total net assets in
fixed-income securities of companies that are close to entering, or already
in, reorganization proceedings. These obligations will likely be rated below
the four highest ratings of Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Rating Service, a division of McGraw-Hill Companies, Inc.
("S&P"). See "Certain Portfolio Securities_Low-Rated and Comparable Unrated
Securities." In addition, the Fund may write covered put and call options on
its portfolio securities, and purchase and write put and call options on
stock indexes. The Fund may also lend its portfolio securities. These
techniques are discussed below under "Investment Techniques."
The Fund may reduce the proportion of its investments in equity
securities and temporarily invest its assets in fixed-income securities and
in U.S. Government Securities and other high-grade, short-term money market
instruments, including repurchase agreements with respect to such
instruments, when, in the opinion of Dreyfus, a defensive posture is
warranted. To this extent, the Fund may not achieve its investment objective.
INVESTMENT TECHNIQUES
In connection with its investment objectives 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.
Page 7
SECURITIES LENDING. From time to time, the Fund may lend portfolio
securities to brokers, dealers and other financial organizations. Such loans
will not exceed 331/3% of the Fund's total assets, taken at value. Loans of
portfolio securities by the Fund will be collateralized by cash, letters of
credit or securities issued or guaranteed by the U.S. Government or its
agencies, which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities.
COVERED OPTION WRITING. From time to time, the Fund may write covered
put and call options on portfolio securities and may purchase put and call
options on securities. The Fund could realize fees (referred to as
"premiums") for granting the rights evidenced by the options. However, in
return for the premium, the Fund forfeits the right to any appreciation in
the value of the underlying security while the option is outstanding. A put
option embodies the right of its purchaser to compel the writer of the option
to purchase from the option holder an underlying security at the specified
price at any time during the option period. In contrast, a call option
embodies the right of its purchaser to compel the writer of the option to
sell the option holder an underlying security at a specified price at any
time during the option period.
Upon the exercise of a put option written by the Fund, the Fund may
suffer a loss equal to the difference between the price at which the Fund is
required to purchase the underlying security and its market value at the time
of the option exercise, less the premium received for writing the option.
Upon the exercise of a call option written by the Fund, the Fund may suffer a
loss equal to the excess of the security's market value at the time of the
option exercise over the Fund's acquisition cost of the security, less the
premium received for writing the option.
Whenever the Fund writes a call option it will continue to own or to
have the present right to acquire the underlying security for as long as it
remains obligated as the writer of the option. To support its obligation to
purchase the underlying security if a put option is exercised, the Fund will
either (a) deposit with the Fund's custodian in a segregated account, cash,
U.S. Government Securities or other high grade debt obligations having a
value at least equal to the exercise price of the underlying securities or
(b) continue to own the equivalent number of puts of the same "series" (that
is, puts on the same underlying security having the same exercise prices and
expiration dates as those written by the Fund), or an equivalent number of
puts of the same "class" (that is, puts on the same underlying security) with
exercise prices greater than those it has written (or, if the exercise prices
of the puts it holds are less than the exercise prices of those it has
written, it will deposit the difference with the Fund's custodian in a
segregated account).
The Fund may engage in a closing purchase transaction to realize a
profit or limit a loss, to prevent an underlying security from being called
or put or, in the case of a call option, to unfreeze an underlying security
(thereby permitting its sale or the writing of a new option on the security
prior to the outstanding option's expiration). To effect a closing purchase
transaction, the Fund would purchase, prior to the holder's exercise of an
option that the Fund has written, an option of the same series as that on
which the Fund desires to terminate its obligation. The obligation of the
Fund under an option that it has written would be terminated by a closing
purchase transaction, but the Fund would not be deemed to own an option as a
result of the transaction. There can be no assurance that the Fund will be
able to effect closing purchase transactions at a time when it wishes to do
so. To facilitate closing purchase transactions, however, the Fund will
ordinarily write options only if a secondary market for the options exists on
a national securities exchange or in the over-the-counter market.
CERTAIN PORTFOLIO SECURITIES
FOREIGN SECURITIES. The Fund may purchase securities of foreign
issuers and may invest in obligations of foreign branches of domestic banks
and domestic branches of foreign banks. Investment in foreign securities
presents certain risks, including those resulting from fluctuations in
currency exchange rates, revaluation of currencies, adverse political and
economic developments and the possi-
Page 8
ble imposition of currency exchange blockages or other foreign governmental
laws or restrictions, reduced availability of public information concerning
issuers, and the fact that foreign issuers are not generally subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements comparable to those applicable to
domestic issuers. Moreover, securities of many foreign issuers may be less
liquid and their prices more volatile than those of comparable domestic
issuers. In addition, with respect to certain foreign countries, there is the
possibility of expropriation, confiscatory taxation and limitations on the
use or removal of funds or other assets of the Fund, including withholding of
dividends. Foreign securities may be subject to foreign government taxes that
would reduce the yield on such securities.
ILLIQUID SECURITIES. The Fund will not knowingly invest more than 15%
of the value of its net assets in illiquid securities, including time
deposits and repurchase agreements having maturities longer than seven days.
Securities that have readily available market quotations are not deemed
illiquid for purposes of this limitation (irrespective of any legal or
contractual restrictions on resale). The Fund may invest in commercial
obligations issued in reliance on the so-called "private placement" exemption
from registration afforded by Section 4(2) of the Securities Act of 1933, as
amended ("Section 4(2) paper"). The Fund may also purchase securities that
are not registered under the Securities Act of 1933, as amended, but that can
be sold to qualified institutional buyers in accordance with Rule 144A under
that Act ("Rule 144A securities"). Section 4(2) paper is restricted as to
disposition under the federal securities laws, and generally is sold to
institutional investors, such as the Fund, that agree that they are purchasing
the paper for investment and not with a view to public distribution. Any
resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors like the Fund through or
with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. Rule 144A securities
generally must be sold to other qualified institutional buyers.
Determinations as to the liquidity of investments in Section 4(2) paper and
Rule 144A securities will be made by the Company's Board of Trustees or by
Dreyfus pursuant to guidelines established by the Board of Trustees. The
Board or Dreyfus will consider the availability of reliable price information
and other relevant information in making such determinations. If a particular
investment in Section 4(2) paper or Rule 144A securities is not determined to
be liquid, that investment will be included within the percentage limitation
on investment in illiquid securities. The ability to sell Rule 144A
securities to qualified institutional buyers is a recent development and it
is not possible to predict how this market will mature. Investing in Rule
144A securities could have the effect of increasing the level of Fund
illiquidity to the extent that qualified institutional buyers become, for a
time, uninterested in purchasing these securities.
LOW-RATED AND COMPARABLE UNRATED SECURITIES. Low-rated and comparable
unrated securities (collectively referred to in this discussion as "low-rated
securities") will likely have some quality and protective characteristics
that, in the judgment of the rating organization, are outweighed by large
uncertainties or major risk exposures to adverse conditions; and are
predominantly speculative with respect to the issuer's capacity to pay
interest and to repay principal in accordance with the terms of the
obligation. While the market values of low-rated securities tend to react
less to fluctuations in interest rate levels than the market values of
higher-rated securities, the market values of certain low-rated securities
tend to be more sensitive to individual corporate developments and changes in
economic conditions than higher-rated securities. In addition, low-rated
securities generally present a higher degree of credit risk. Issuers of
low-rated securities are often highly leveraged and may not have more
traditional methods of financing available to them so that their ability to
service their debt obligations during an economic downturn or during sustained
periods of rising interest rates may be impaired. The risk of loss due to
default by such issuers is significantly greater because low-rated securities
are generally unsecured and frequently are subordinated to the prior payment
of senior indebtedness. The Fund may incur additional expenses
Page 9
to the extent that it is required to seek recovery upon a default in the
payment of principal or interest on its portfolio holdings. The existence of
limited markets for low-rated securities may diminish the Fund's ability to
obtain accurate market quotations for purposes of valuing such securities and
calculating its net asset value. Further information regarding security
ratings is contained in the SAI.
STOCK INDEX OPTIONS. The Fund may purchase and write exchange-listed
put and call options on stock indexes to hedge against risks of market-wide
price movements. A stock index measures the movement of a certain group of
stocks by assigning relative values to the common stocks included in the
index. (Examples of well-known stock indexes are the Standard & Poor's 500
Composite Stock Price Index and the New York Stock Exchange Composite Index.)
Options on stock indexes are similar to options on securities. However,
because options on stock indexes do not involve the delivery of an underlying
security, the option represents the holder's right to obtain from the writer
in cash a fixed multiple of the amount by which the exercise price exceeds
(in the case of a put) or is less than (in the case of a call) the closing
value of the underlying index on the exercise date.
The advisability of using stock index options to hedge against the
risk of market-wide movements will depend on the extent of diversification of
the Fund's stock instruments and the sensitivity of its stock investments to
factors influencing the underlying index. The effectiveness of purchasing or
writing stock index options as a hedging technique will depend upon the
extent to which price movements in the portion of the portfolio being hedged
correlate with price movements in the stock index selected.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements.
A repurchase agreement involves the purchase of a security by the Fund and a
simultaneous agreement (generally with a bank or broker-dealer) to repurchase
that security from the Fund at a specified price and date or upon demand.
This technique offers a method of earning income on idle cash. A risk
associated with repurchase agreements is the failure of the seller to
repurchase the securities as agreed, which may cause the Fund to suffer a
loss if the market value of such securities declines before they can be
liquidated on the open market. Repurchase agreements with a duration of more
than seven days are considered illiquid securities and are subject to the
associated limits discussed above.
OTHER INVESTMENT COMPANIES. The Fund may invest in securities issued
by other investment companies to the extent that such investments are
consistent with the Fund's investment objectives and policies and permissible
under the Investment Company Act of 1940, as amended ("1940 Act"). As a
shareholder of another investment company, the Fund would bear, along with
other shareholders, its pro rata portion of the other investment company's
expenses, including advisory fees. These expenses would be in addition to the
advisory and other expenses that the Fund bears directly in connection with
its own operations.
PORTFOLIO TURNOVER. While securities are purchased for the Fund on
the basis of potential for long-term growth of capital and not for short-term
trading profits, the Fund's turnover rate may exceed 100%. A portfolio
turnover rate of 100% would occur, for example, if all the securities held by
the Fund were replaced once in a period of one year. A higher rate of
portfolio turnover involves correspondingly greater brokerage commissions and
other expenses that must be borne directly by the Fund and, thus, 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.
RISK FACTORS
As with any equity fund, the value of your investment in the Fund may
fluctuate in response to movements in the stock market as a whole. In
addition, the ability of the Fund to invest in foreign securities, illiquid
securities and low-rated and unrated debt securities, and to purchase and
sell certain instruments
Page 10
(including writing certain options), may increase the Fund's investment risks
and opportunities. See "Certain Portfolio Securities" and "Investment
Techniques-Covered Options Writing" in this Prospectus and "Investment
Objectives and Management Policies" in the SAI.
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. As a fundamental policy, the Fund
may not (i) borrow money in an amount exceeding 331/3% of the Fund's total
assets at the time of borrowing; (ii) make loans or lend securities in excess
of 331/3% of the Fund's total assets; (iii) purchase, with respect to 75% of
the Fund's total assets, securities of any one issuer representing more than
5% of the Fund's total assets (other than securities issued or guaranteed by
the U.S. Government, its agencies and instrumentalities) or more than 10% of
that issuer's outstanding voting securities; and (iv) invest more than 25% of
the value of the Fund's total assets in the securities of one or more issuers
conducting their principal activities in the same industry; provided that
there shall be no such limitation on investments in obligations of the U.S
Government, state and municipal governments and their political subdivisions
or investments in domestic banks, including U.S. branches of foreign banks
and foreign branches of U.S. banks. The SAI describes all of the Fund's
fundamental and non-fundamental restrictions.
The investment objectives, policies, restrictions, practices and
procedures of the Fund, unless otherwise specified, may be changed without
shareholder approval. If the Fund's investment objectives, 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.
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, 1997, Dreyfus managed or administered
approximately $82 billion in assets for more than 1.7 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 one or more third parties to provide, 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 a committee of portfolio managers of Dreyfus
and no person is primarily responsible for making recommendations to the
committee. This committee also comprises the Equity Policy Group of The
Boston Company Asset Management, Inc. which is an indirect wholly-owned
subsidiary of Mellon.
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 $233 billion in assets as of
December 31, 1996, including $86 billion in mutual fund assets. As of
December 31, 1996, Mellon, through various subsidiaries, provided
non-
Page 11
investment services, such as custodial or administration services, for
more than $1,046 billion in assets, including approximately $57 billion in
mutual fund assets.
Under the Investment Management Agreement, the Fund is contractually
obligated to pay a fee computed daily, and paid monthly, at the annual rate
of .90% of the Fund's average daily net assets. 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. In order to compensate Dreyfus for
paying virtually all of the Fund's expenses, the Fund's investment management
fee is higher than the investment advisory fees paid by most investment
companies. Most, if not all, such companies also pay for a portion of the
non-investment advisory expenses that are not paid by such companies'
investment advisers. Although Dreyfus does not pay the fees and expenses of
the non-interested Trustees (including counsel fees), Dreyfus is
contractually required to reduce its investment management fee by an amount
equal to the Fund's allocable share of such fees and expenses. 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 year ended December 31, 1996, the Fund paid Dreyfus
0.88% of its average daily net assets in investment management fees (net of
fees waived).
For the fiscal year ended December 31, 1996, total operating expenses
(excluding Rule 12b-1 fees) (net of fees waived) of the Fund were 0.88% of
the average daily net assets of the Investor Class, the Institutional Class
and Class R, respectively.
In addition, Investor and Institutional shares may be subject to
certain distribution and shareholder servicing fees. See "Distribution Plan."
Dreyfus may pay the Fund's distributor for shareholder services from
Dreyfus' own assets, including past profits but not including the management
fee paid by the Fund. The Distributor may use part or all of such payments to
pay Agents in respect of these services.
In allocating brokerage transactions for the Fund, Dreyfus seeks to
obtain the best execution of orders at the most favorable net price. Subject
to this determination, Dreyfus may consider, among other things, the receipt
of research services and/or the sale of shares of the Fund or other funds
managed, administered or advised by Dreyfus as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. See "Portfolio
Transactions" in the SAI.
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 objectives,
policies and restrictions, the Fund may invest in securities of companies with
which Mellon Bank has a lending relationship.
DISTRIBUTOR. The Fund's distributor is Premier Mutual Fund Services,
Inc. The Distributor is located at 60 State Street, Boston, Massachusetts
02109. The Distributor is a wholly-owned subsidiary of FDI Distribution
Services, Inc., a provider of mutual fund administration services, which in
turn is a wholly-owned 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,
Pennsylvania 15258) is the Fund's custodian. The Fund's Transfer and Dividend
Disbursing Agent is Dreyfus Transfer, Inc. (the "Transfer Agent"), a
wholly-owned subsidiary of Dreyfus, located at One American Express Plaza,
Providence, Rhode Island 02903. Premier Mutual Fund Services, Inc. serves as
the Fund's sub-administrator and, pursuant to a Sub-Administration Agreement,
provides various administrative and corporate secretarial services to the
Fund.
Page 12
HOW TO BUY FUND SHARES
GENERAL. Investor shares are offered to any investor and may be
purchased through the Distributor or Agents that have entered into Agreements
with the Distributor. Class R shares are sold primarily to Banks acting on
behalf of customers having a qualified trust or investment account or
relationship at such institution, or to customers who have received and hold
shares of the Fund distributed to them by virtue of such an account or
relationship. A "Retirement Plan" is a certain qualified or non-qualified
employee benefit plan or other program, including pension, profit-sharing and
other deferred compensation plans, whether established by corporations,
partnerships, non-profit entities or state and local governments. 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.
Agents effecting transactions in Fund shares may charge their clients direct
fees in connection with such transactions.
In addition to Investor shares and Class R shares, the Fund also
offers Institutional shares through a separate prospectus. Institutional
shares are not subject to a sales charge on purchases or on redemptions.
Institutional shares are subject to a Rule 12b-1 fee at an annual rate of up
to 0.15% of the Fund's average net assets attributable to Institutional
shares. Institutional shares are offered to those customers of certain
financial planners and investment advisers who held shares of a predecessor
class of the Fund on April 4, 1994. For more information concerning
Institutional shares, see the current prospectus for Institutional shares.
Stock certificates are issued only upon your written request. The
Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of an Agent which maintains an omnibus account in the Fund and has
made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant is $750, with no minimum on subsequent
purchases. Individuals who open an IRA also may open a non-working spousal IRA
with a minimum initial investment of $250. The initial investment must be
accompanied by the Fund's Account Application. For full-time or part-time
employees of Dreyfus or any of its affiliates or subsidiaries, directors of
Dreyfus, Board members of a fund advised by Dreyfus including members of the
Company's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment is $1,000. For full-time or part-time employees of
Dreyfus or any of its affiliates or subsidiaries who elect to have a portion
of their pay directly deposited into their Fund account, the minimum initial
investment is $50. The Fund reserves the right to offer Fund shares without
regard to minimum purchase requirements to employees participating in certain
qualified or non-qualified employee benefit plans or other programs where
contributions or account information can be transmitted in a manner and form
acceptable to the Fund. The Fund reserves the right to vary further the
initial and subsequent investment minimum requirements at any time.
Investor shares are also offered without regard to the minimum
initial investment requirements through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, Dreyfus Government Direct Deposit Privilege or
Dreyfus Payroll Savings Plan pursuant to the Dreyfus Step Program (described
under "Shareholder Services"). These services enable you to make regularly
scheduled investments and may provide you with a convenient way to invest for
long-term financial goals. You should be aware, however, that periodic
investment plans do not guarantee a profit and will not protect an investor
against loss in a declining market.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes
various limitations on the amounts that may be contributed annually to
Retirement Plans. These limitations apply with respect to participants at the
plan level, but generally do not directly affect the amount of plan assets
that may be invested in the Fund by a Retirement Plan. Participants and plan
sponsors should consult their tax advisers for details.
Page 13
You may purchase Investor shares and Class R shares by check or wire,
or through the Dreyfus TELETRANSFER Privilege described below. Checks should
be made payable to "The Dreyfus Family of Funds" or, if for Dreyfus
retirement plan accounts, to "The Dreyfus Trust Company, Custodian." For
accounts other than Dreyfus retirement plan accounts, payments which are
mailed should be sent to Dreyfus Core Value Fund, P.O. Box 6587, Providence,
Rhode Island 02940-6587. If you are opening a new account, please enclose
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. For Dreyfus retirement plan
accounts, payments which are mailed should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Neither initial nor subsequent investments should be made by third party
check. Purchase orders may be delivered in person only to a Dreyfus Financial
Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY
UPON RECEIPT THEREBY. For the location of the nearest Dreyfus Financial
Center, please call the telephone number listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to Boston Safe Deposit and Trust Company, together with
the DDA# 044210/Dreyfus Core Value Fund and applicable class for purchase of
Fund shares in your name. The wire must indicate which Class of shares is
being purchased and it must include your Fund account number (for new
accounts, your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable. If your
initial purchase of Fund shares is by wire, you should call 1-800-645-6561
after completing your wire payment in order to obtain your Fund account
number. Please include your Fund account number on the Fund's Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House ("ACH") member. You must
direct the institution to transmit immediately available funds through the
ACH System to Boston Safe Deposit and Trust Company with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and Fund account number PRECEDED BY THE DIGITS
"4440" Dreyfus Core Value Fund/Class R shares;
"4010" Dreyfus Core Value Fund/Investor shares.
The Distributor may pay dealers a fee of up to 0.5% 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
Page 14
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 PER SHARE ("NAV"). An investment portfolio's NAV
refers to the worth of one share. The NAV for Investor shares and Class R
shares is computed by adding, with respect to such Class of shares, the value
of the Fund's investments, cash, and other assets attributable to that Class,
deducting liabilities of the Class and dividing the result by number of
shares of that Class outstanding. The valuation of assets for determining NAV
for the Fund may be summarized as follows:
The portfolio securities of the Fund listed or traded on a stock
exchange, except as otherwise noted, are valued at the latest sale price. If
no sale is reported, the mean of the latest bid and asked prices is used.
Securities traded over-the-counter are priced at the mean of the latest bid
and asked prices but will be valued at the last sale price if required by
regulations of the SEC. When market quotations are not readily available,
securities and other assets are valued at a fair value as determined in good
faith in accordance with procedures established by the Board of Trustees.
Bonds are valued through valuations obtained from a commercial
pricing service or at the most recent mean of the bid and asked prices
provided by investment dealers in accordance with procedures established by
the Board of Trustees.
NAV is determined on each day that the New York Stock Exchange
("NYSE") is open (a "business day"), as of the close of business of the
regular session of the NYSE (usually 4 p.m. Eastern time). Investments and
requests to exchange or redeem shares received by the Transfer Agent in
proper form before such close of business are effective on, and will receive
the price determined on, that day (except investments made by electronic
funds transfer, which are effective two business days after your call).
Investment, exchange and redemption requests received after such close of
business are effective on, and receive the share price determined on, the next
business day.
The public offering price of Investor shares and Class R shares, both
of which are offered on a continuous basis, is the NAV of that Class.
DREYFUS 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 filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account designated
in one of these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an ACH member may be
so designated. The Fund may modify or terminate this Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of Fund shares by calling 1-800-645-6561 or,
if calling from overseas, 516-794-5452.
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
certain other eligible 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 ser-
Page 15
vice, please call 1-800-645-6561 to determine if it is available and whether
any conditions are imposed on its use. Shareholders are limited to six
exchanges out of the Fund during the calendar year. WITH RESPECT TO CLASS R
SHARES HELD BY RETIREMENT PLANS, EXCHANGES MAY BE MADE ONLY BETWEEN A
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S
RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
To request an exchange, you or your Agent acting on your behalf must
give exchange instructions to the Transfer Agent in writing, or by telephone.
Before any exchange, you must obtain and should review a copy of the current
prospectus of the fund into which the exchange is being made. Prospectuses
may be obtained by calling 1-800-645-6561. Except in the case of personal
retirement plans, the shares being exchanged must have a current value of at
least $500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made. The
ability to issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless you check the relevant "NO" box on the
Account Application, indicating that you specifically refuse this Privilege.
The Telephone Exchange Privilege may be established for an existing account
by written request, signed by all shareholders on the account, or by a
separate signed Shareholder Services Form, available by calling
1-800-645-6561 or, by oral request from any of the authorized signatories on
the account also by calling 1-800-645-6561. If you previously have
established the Telephone Exchange Privilege, you may telephone exchange
instructions (including over The Dreyfus TouchRegistration Mark Automated
Telephone System) by calling 1-800-645-6561. If calling from overseas, call
516-794-5452. See "How to Redeem Fund Shares_Procedures." Upon an exchange
into a new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Telephone Exchange Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER
Privilege and the dividends and distributions payment option (except for
Dreyfus Dividend Sweep) selected by you.
Shares will be exchanged at the next determined NAV; however, a sales
load may be charged with respect to exchanges of Investor shares into funds
sold with a sales load. If you are exchanging Investor shares into a fund
that charges a sales load, you may qualify for share prices which do not
include the sales load or which reflect a reduced sales load, if the shares
of the fund from which you are exchanging were: (a) purchased with a sales
load, (b) acquired by a previous exchange from shares purchased with a sales
load or, (c) acquired through reinvestment of dividends or other
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange you must notify the Transfer Agent or
your 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
and, therefore, an exchanging shareholder (other than a qualified Retirement
Plan) may realize a taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of certain other eligible funds in the Dreyfus Family of
Funds of which you are currently an investor. WITH RESPECT TO CLASS R SHARES
HELD BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE DREYFUS AUTO-EXCHANGE
PRIVILEGE MAY BE MADE
Page 16
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 Investor shares into funds
sold with a sales load. The right to exercise this Privilege may be modified
or canceled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
The Fund may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. The exchange of shares of one fund for shares of
another is treated for Federal income tax purposes as a sale of the shares
given in exchange by the shareholder and, therefore, an exchanging
shareholder (other than a tax-exempt Retirement Plan) may realize a taxable
gain or loss. For more information concerning this Privilege and the funds in
the Dreyfus Family of Funds eligible to participate in this Privilege, or to
obtain a Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. At your option, the bank account
designated by you will be debited in the specified amount, and Fund shares
will be purchased, once a month, on either the first or fifteenth day, or
twice a month, on both days. Only an account maintained at a domestic
financial institution which is an ACH member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of purchase at any time
by mailing written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if to Dreyfus retirement plan
accounts to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and other distributions, if any, paid by the Fund in shares of
certain other eligible funds in 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. See "Shareholder
Services" in the SAI. Dreyfus Dividend ACH permits you to transfer
electronically on the payment date dividends or dividends and other
distributions, if any, from the Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is an ACH member
may be so designated. Banks may charge a fee for this service.
For more information concerning these Privileges, or to request a
Dreyfus Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these Privileges by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment in
or cancellation of these Privileges is effective three business days
following receipt. These Privileges are available only for existing accounts
and may not be used to open new accounts. Minimum subsequent investments do
not apply for Dreyfus Dividend Sweep. The Fund may modify or terminate these
Privileges at any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement plans
are not eligible for Dreyfus Dividend Sweep.
Page 17
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. You
should consider whether Direct Deposit of your entire payment into a fund
with fluctuating NAV, such as the Fund, may be appropriate for you. To enroll
in Dreyfus Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in this Privilege. The appropriate form may be obtained by
calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to
you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon the direct deposit program of your employer, you may have part or all of
your paycheck transferred to your existing Dreyfus account electronically
through the ACH system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse side
of the form and return it to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of your employer, not the
Distributor, Dreyfus, the Fund, the Transfer Agent or any other person, to
arrange for transactions under the Dreyfus Payroll Savings Plan. The Fund may
modify or terminate this Privilege at any time or charge a service fee. No
such fee currently is contemplated.
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Investor shares without
regard to the Fund's minimum initial investment requirements through
Dreyfus-AUTOMATIC Asset BuilderRegistration Mark, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step
Program account, you must supply the necessary information on the Fund's
Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the
case may be, as provided under the terms of such Privilege(s). The Fund
reserves the right to redeem your account if you have terminated your
participation in the Program and your account's net asset value is $500 or
less. See "How to Redeem Fund Shares." The Fund may modify or terminate this
Program at any time. Investors who wish to purchase Investor shares through
Dreyfus Step Program in conjunction with a Dreyfus-sponsored retirement plan
may do so only for IRAs, SEP-IRAs and IRA "Rollover Accounts."
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
Page 18
Fund or the Transfer Agent. Shares for which certificates have been issued may
not be redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566;
for IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL. You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as described
below. When a request is received in proper form, the Fund will redeem the
shares at the next determined 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 when shares are redeemed directly through
the Distributor. Agents or other institutions may charge their clients a 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 DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH
MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY
THE TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE
OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if the NAV of your account is $500 or
less and remains so during the notice period.
PROCEDURES -- You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, the Wire Redemption
Privilege, the Telephone Redemption Privilege or the Dreyfus TELETRANSFER
Privilege. 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
Page 19
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 (including over The Dreyfus TouchRegistration
Mark Automated Telephone System) 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 redemption or an exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's NAV may fluctuate.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671, or if for Dreyfus
retirement plan accounts to the Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest financial center, please call the telephone
number listed under "General Information." Redemption requests must be signed
by each shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP"), and the Stock Exchanges Medallion
Program. For more information with respect to signature-guarantees, please
call the telephone number listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE. You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically
by check. Holders of jointly registered Fund or bank accounts may have
redemption proceeds of only up to $250,000 wired within any 30-day period.
You may telephone redemption requests by calling 1-800-645-6561 or, if
calling from overseas, 516-794-5452. The Fund reserves the right to refuse
any redemption request, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at any time by the Transfer
Agent or the Fund. The Fund's SAI sets forth instructions for transmitting
redemption requests by wire. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are not
eligible for this Privilege.
Page 20
TELEPHONE REDEMPTION PRIVILEGE. You may redeem Fund shares (maximum
$150,000 per day) by telephone if you checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452. The Fund reserves
the right to refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount involved or the
number of such requests. This Privilege may be modified or terminated at any
time by the Transfer Agent or the Fund. Shares held under Keogh Plans, IRAs
or other retirement plans, and shares for which certificates have been
issued, are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE. You may redeem Fund shares (minimum
$500 per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will
be transferred between your Fund account and the bank account designated in
one of these documents. Only such an account maintained in a domestic
financial institution which is an ACH member may be so designated. Redemption
proceeds will be on deposit in your account at an ACH member bank ordinarily
two days after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the Dreyfus
TELETRANSFER Privilege for transfer to their bank account only up to $250,000
within any 30-day period. The Fund reserves the right to refuse any request
made by telephone, including requests made shortly after a change of address,
and may limit the amount involved or the number of such requests. The Fund
may modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares issued in certificate
form, are not eligible for this Privilege.
DISTRIBUTION PLAN
Investor shares and Institutional shares are subject to a
Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1 under the 1940
Act ("Rule 12b-1"). The Investor shares and Institutional shares of the Fund
bear some of the cost of selling those shares under the Plan. The Plan allows
the Fund to spend annually up to 0.25% of its average daily net assets
attributable to Investor shares, and 0.15% of its average daily net assets
attributable to Institutional shares, to compensate Dreyfus Service
Corporation, an affiliate of Dreyfus, for shareholder servicing activities
and the Distributor for shareholder servicing activities and for activities
or expenses primarily intended to result in the sale of Investor and
Institutional shares of the Fund. The Plan allows the Distributor to make
payments from the Rule 12b-1 fees it collects from the Fund to compensate
Agents that have entered into 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 Investor shares or Institutional shares of the Fund.
The Fund and the Distributor may suspend or reduce payments under the
Plan at any time, and 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.
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.
Page 21
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund declares and pays dividends from its net investment income,
if any, four times yearly and distributes net realized capital 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 capital gains unless all capital loss
carryovers, if any, have been utilized or have expired. All expenses are
accrued daily and deducted before declaration of dividends to investors.
Dividends paid by each Class are calculated at the same time and in the same
manner and are in the same amount, except that the expenses attributable
solely to a particular Class will be borne exclusively by that Class.
Investor shares will receive lower per share dividends than Class R shares
because of the higher expenses borne by the Investor shares. See "Expense
Summary."
Investors other than qualified Retirement Plans may choose whether to
receive dividends and other distributions in cash or to receive dividends in
cash and reinvest other distributions in additional Fund shares at NAV, or to
reinvest both dividends and other distributions in additional Fund shares;
dividends and other distributions paid to qualified Retirement Plans are
reinvested automatically in additional Fund shares at NAV.
It is expected that the Fund will continue to qualify for treatment
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 and realized gains 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 (collectively, "dividend distributions"), paid by the Fund are
taxable to U.S. shareholders, including certain non-qualified Retirement
Plans, as ordinary income to the extent of the Fund's earnings and profits,
whether received in cash or reinvested in additional Fund shares. Distribution
s from the Fund's net capital gain (the excess of net long-term capital gain
over short-term capital loss) are taxable to such shareholders as long-term
capital gains, regardless of how long the shareholders have held their Fund
shares and whether such distributions are received in cash or reinvested in
additional 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.
Dividend distributions paid by the Fund to a non-resident foreign
investor generally are subject to U.S. withholding tax at the rate of 30%,
unless the non-resident foreign investor claims the benefit of a lower rate
specified in a tax treaty. Capital gain distributions paid by the Fund to a
non-resident foreign investor, as well as the proceeds of any redemptions by
such an investor, regardless of the extent to which gain or loss may be
realized, generally are not 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 capital gain
distributions, if any, paid during the year.
Dividends and other distributions 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 distributions paid to such plans. Generally, distributions from
qualified retirement plans, except those representing returns of
non-deductible contributions thereto, will be taxable as ordi-
Page 22
nary income and, if made prior to the time the participant reaches age 591/2,
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 701/2 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. If a distributee of an "eligible rollover
distribution" from a qualified retirement plan does not elect to have the
eligible rollover distribution paid directly from the Plan to an eligible
retirement plan in a "direct rollover," the eligible rollover distribution is
subject to a 20% income tax withholding.
With respect to individual investors and certain non-qualified
retirement plans, Federal laws and regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury 31% of
dividends, capital gain distributions and any redemption proceeds, regardless
of the extent to which gain or loss may be realized, paid to such a
shareholder if the 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 that the shareholder is 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
that a shareholder's TIN is incorrect or that a shareholder has failed to
properly report taxable dividend and interest income on a Federal income tax
return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account and may be claimed as a credit on the record
owner's Federal income tax return.
The Fund may be subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income
and capital gains.
You should consult your tax advisers regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may be
calculated on the basis of average annual total return and/or total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made by
the Fund during the measuring period were reinvested in shares of the same
Class. These figures also take into account any applicable distribution and
shareholder servicing fees. As a result, at any given time, the performance
of the Investor shares should be expected to be lower than that of Class R
shares. Performance for each Class will be calculated separately.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment was purchased with an initial
payment of $1,000 and that the investment was redeemed at the end of a stated
period of time, after giving effect to the reinvestment of dividends and
other distributions during the period. The return is expressed as a
percentage rate which, if applied on a compounded annual basis, would result
in the redeemable value of the investment at the end of the period.
Advertisements of the Fund's performance will include the Fund's average
annual total return for one, five and ten year periods, or for shorter periods
depending upon the length of time during which the Fund has operated.
Computations of average annual total return for periods of less than one year
represent an annualization of the Fund's actual total return for the
applicable period.
Page 23
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 per
share at the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a hypothetical
investment at the end of the period which assumes the application of the
percentage rate of total return.
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 of such class on the last day of that period. Since yields fluctuate,
yield data cannot necessarily be used to compare an investment in a Class of
shares with bank deposits, savings accounts, and similar investment
alternatives which often provide an agreed-upon or guaranteed fixed yield for
a stated period of time.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
The Fund may compare the performance of its shares with various
industry standards of performance including Lipper Analytical Services, Inc.
ratings, Standard and Poor's 500 Composite Stock Price Index, the Consumer
Price Index, and the Dow Jones Industrial Average. Performance rankings as
reported in CHANGING TIMES, BUSINESS WEEK, INSTITUTIONAL INVESTOR, THE WALL
STREET JOURNAL, MUTUAL FUND FORECASTER, NO LOAD INVESTOR, MONEY MAGAZINE,
MORNINGSTAR MUTUAL FUND VALUES, U.S. NEWS AND WORLD REPORT, FORBES, FORTUNE,
BARRON'S and similar publications may also be used in comparing the Fund's
performance. Furthermore, the Fund may quote its shares' total returns and
yields in advertisements or in shareholder reports. The Fund may also
advertise non-standardized performance information, such as total return for
periods other than those required to be shown or cumulative performance data.
The Fund may advertise a quotation of yield or other similar quotation
demonstrating the income earned or distributions made by the Fund.
GENERAL INFORMATION
The Company was organized as a business trust under the laws of the
Commonwealth of Massachusetts on March 30, 1979 under the name The Boston
Company Fund, changed its name effective April 4, 1994 to The Laurel Funds
Trust, and then changed its name to The Dreyfus/Laurel Funds Trust on October
17, 1994. The Company is registered with the SEC under the 1940 Act, as a
management investment company. The Fund is one of three investment portfolios
authorized by the Company's Board of Trustees. The Fund's shares are
classified into three Classes_ Institutional shares, Investor shares and
Class R shares. The Company's Agreement and Declaration of Trust permits the
Board of Trustees to create an unlimited number of investment portfolios
(each a "fund") without shareholder approval. The Company may in the future
seek to achieve the Fund's investment objectives by investing all of the
Fund's net investable assets in another investment company having the same
investment objectives 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.
Each share (regardless of Class) has one vote. All shares of all
funds (and Classes thereof) vote together as a single class, except as to any
matter for which a separate vote of any fund or Class is required by the 1940
Act, and except as to any matter which affects the interests of one or more
particular funds or Classes, in which case only the shareholders of the
affected fund or Classes are entitled to vote, each as
Page 24
a separate class. Only holders of Investor shares and Institutional shares
will be entitled to vote on matters submitted to shareholders pertaining to
the Distribution 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, or by calling toll free
1-800-645-6561.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 25
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Page 26
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Page 27
Core Value
Fund --
Investor shares
Class R shares
Prospectus
Registration Mark
Copy Rights 1997 Dreyfus Service Corporation
312/712p050197
Page 28
- ------------------------------------------------------------------------------
PROSPECTUS MAY 1, 1997
DREYFUS CORE VALUE FUND
- ------------------------------------------------------------------------------
Dreyfus Core Value Fund (the "Fund") is a separate, diversified
portfolio of The Dreyfus/Laurel Funds Trust, an open-end management
investment company (the "Company"), known as a mutual fund. The Fund seeks
long-term growth of capital, with current income as a secondary objective,
primarily through equity investments, such as common stocks and securities
convertible into common stock.
BY THIS PROSPECTUS, THE FUND IS OFFERING INSTITUTIONAL SHARES.
SHARES OF THE FUND ARE SOLD WITHOUT A SALES LOAD. INSTITUTIONAL
SHARES OF THE FUND ARE SUBJECT TO DISTRIBUTION AND SHAREHOLDER SERVICING
FEES.
SHARES OF THE FUND MAY BE PURCHASED OR REDEEMED BY TELEPHONE USING
THE DREYFUS TELETRANSFER PRIVILEGE.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER. THE
DREYFUS CORPORATION IS REFERRED TO AS "DREYFUS."
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.
THE STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1997 ("SAI"),
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. THE SEC MAINTAINS
A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE SAI, MATERIAL INCORPORATED
BY REFERENCE, AND OTHER INFORMATION REGARDING THE FUND. FOR A FREE COPY OF
THE SAI, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK
11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS AN AFFILIATE OF
MELLON BANK, N.A. ("MELLON BANK") 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.
Table of Contents
Page
Expense Summary....................................... 3
Financial Highlights.................................. 4
Description of the Fund............................... 5
Management of the Fund................................ 9
How to Buy Fund Shares................................ 10
Shareholder Services.................................. 12
How to Redeem Fund Shares............................. 15
Distribution Plan..................................... 17
Dividends, Other Distributions and Taxes.............. 18
Performance Information............................... 19
General Information................................... 20
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
[This Page Intentionally Left Blank]
Page 2
<TABLE>
<CAPTION>
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES: INSTITUTIONAL SHARES
----------------------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases........ none
Maximum Sales Load Imposed on Reinvestments.... none
Deferred Sales Load............................ none
Redemption Fee................................. none
Exchange Fee................................... none
ESTIMATED ANNUAL FUND OPERATING EXPENSES:
(as a percentage of net assets)
Management Fee................................. 0.90%
12b-1 Fee(1)................................... 0.15%
Other Expenses(2).............................. 0.00%
______
Total Fund Operating Expenses.................. 1.05%
EXAMPLE:
You would pay the following expenses
on a $1,000 investment, assuming (1) a 5% annual
return and (2) redemption at the end of each
TIME PERIOD: INSTITUTIONAL SHARES
----------------------
1 Year $ 11
3 Years $ 33
5 Years $ 58
10 Years $128
(1) See "Distribution Plan" for a description of the Fund's Distribution Plan for the Institutional 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 less than .01% of the Fund's net assets.
(See "Management of the Fund.")
</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 Institutional 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. The information in the foregoing
table does not reflect any fee waivers or expense reimbursements that may be
in effect. Certain Agents (as described below) may charge their clients
direct fees for effecting transactions in Fund shares; such fees are not
reflected in the foregoing table. See "Management of the Fund," "How to Buy
Fund Shares" and "Distribution Plan."
The Company understands that banks, securities brokers or dealers and
other financial institutions (including Mellon Bank and its affiliates)
(collectively "Agents") may charge fees to their clients who are owners of
Fund 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 (the "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 clients for various
services provided in connection with their accounts.
Institutional shares are offered to holders of shares of a
predecessor class of the Fund as of April 4, 1994. The Fund also offers
Investor shares and Class R shares. Investor shares are primarily sold to
retail investors by the Distributor and by Agents that have entered into an
Agreement with the Distributor. 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. Investor shares and Class
R shares are offered pursuant to a separate Prospectus.
Page 3
FINANCIAL HIGHLIGHTS
The table below is based upon a single Institutional share outstanding
throughout each fiscal year or period and should be read in conjunction with
the financial statements, related notes and report of independent auditors
that appear in the Fund's Annual Report dated December 31, 1996 and which are
incorporated by reference in the SAI. The financial statements included in
the Fund's Annual Report for the year ended December 31, 1996 have been
audited by KPMG Peat Marwick LLP, independent auditors. Further information
about, and management's discussion of, the Fund's performance is contained in
the Fund's Annual Report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
<TABLE>
<CAPTION>
DREYFUS CORE VALUE FUND
FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.*
Year YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
12/31/96 12/31/95 12/31/94# 12/31/93
<S> <C> <C> <C> <C>
Net asset value, beginning of period $30.12 $24.56 $27.80 $25.96
-------- -------- -------- --------
Income from investment operations:
Net investment income 0.36 0.47 0.47 0.32
Net realized and unrealized gain (loss) on investments 6.01 8.20 (0.31) 3.38
------- ------- ------- -------
Total from investment operations 6.37 8.67 0.16 3.70
------- ------- ------- -------
Less distributions:
Distributions from net investment income (0.34) (0.48) (0.43) (0.33)
Distributions from net realized gains on investments (5.77) (2.63) (2.97) (1.53)
------- ------- ------- -------
Total distributions (6.11) (3.11) (3.40) (1.86)
------- ------- ------- -------
Net asset value, end of period $30.38 $30.12 $24.56 $27.80
======= ======= ======= =======
Total return 21.57% 35.60% 0.49% 14.38%**
------- ------- ------- -------
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $71,894 $75,607 $59,435 $79,656
Ratio of expenses to average net assets 1.03% 1.03% 1.02% 0.95%**
Ratio of net investment income to average net assets 1.07% 1.53% 1.57% 1.13%**
Decrease reflected in above expense ratios due to
undertakings by Dreyfus 0.02% 0.02% 0.01% --
Portfolio turnover rate 88.46% 54.42% 73.00% 75.00%
Average commission rate paid## $.0522 __ __ __
* The Fund commenced selling Institutional shares on February 1, 1993.
** Not annualized.
+ Per share amounts have been calculated using the monthly average
share method, which more appropriately presents the per share data for this
year because the use of the undistributed method did not accord with results of operations.
# 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.
## For fiscal years beginning January 1, 1996, the Fund is required to
disclose its average commission rate paid per share for purchases and sales
of investment securities.
Page 4
++ For the fiscal year ended December 31, 1996, Dreyfus voluntarily
waived its management fee by 0.02% of the value of the Fund's average daily
net assets.
</TABLE>
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund is a diversified fund that seeks long-term growth of
capital, with current income as a secondary objective, primarily through
equity investments, such as common stocks and stocks convertible into common
stocks.
MANAGEMENT POLICIES
Securities are selected for the Fund based on a quantitative and
qualitative study of trends in industries and companies, earning power,
growth features and other investment criteria. Major emphasis is placed on
industries and issuers that are considered by Dreyfus to have characteristics
that reflect attractive valuations as compared to the stock market as a whole
such as a low price to earnings ratio, a low ratio of market price to book
value and better than average cash flows. Dreyfus also focuses on other
"value" oriented investment criteria. In general, the Fund's investments are
broadly diversified over a number of industries and, as a matter of operating
policy, the Fund will not invest more than 25% of its total assets in any one
industry.
Up to 20% of the Fund's total net assets may be invested in foreign
securities. Such investments will be made principally in foreign equity
securities. The Fund may invest up to 5% of its total net assets in
fixed-income securities of companies that are close to entering, or already
in, reorganization proceedings. These obligations will likely be rated below
the four highest ratings of Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Rating Service, a division of McGraw-Hill Companies, Inc.
("S&P"). See "Certain Portfolio Securities -- Low-Rated and Comparable
Unrated Securities". In addition, the Fund may write covered put and call
options on its portfolio securities, and purchase and write put and call
options on stock indexes to hedge its portfolio. The Fund may also lend its
portfolio securities. These techniques are discussed in more detail below
under "Investment Techniques."
The Fund may reduce the proportion of its investments in equity
securities and temporarily invest its assets in fixed-income securities and
in U.S. Government Securities and other high-grade, short-term money market
instruments, including repurchase agreements with respect to such
instruments, when, in the opinion of Dreyfus, a defensive posture is
warranted. To this extent, the Fund may not achieve its investment objective.
INVESTMENT TECHNIQUES
In connection with its investment objectives and policies, the Fund
may employ, among others, the following investment techniques:
BORROWING. The Fund is authorized, within specified limits, to borrow
money for temporary administrative purposes and to pledge its assets in
connection with such borrowings.
SECURITIES LENDING. From time to time, the Fund may lend portfolio
securities to brokers, dealers and other financial organizations. Such loans
will not exceed 331/3% of the Fund's total assets, taken at value. Loans of
portfolio securities by the Fund will be collateralized by cash, letters of
credit or securities issued or guaranteed by the U.S. Government or its
agencies, which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities.
COVERED OPTION WRITING. From time to time, the Fund may write covered
put and call options on portfolio securities and may purchase put and call
options on securities. The Fund could realize fees (referred to as
"premiums") for granting the rights evidenced by the options. However, in
return for the premium, the Fund forfeits the right to any appreciation in
the value of the underlying security while the option is outstanding. A put
option embodies the right of its purchaser to compel the writer of the option
to purchase from the option holder an underlying security at the specified
price at any time during the option period. In contrast, a call option
embodies the right of its purchaser to compel the writer of the option to
sell the option holder an underlying security at a specified price at any
time during the option period.
Page 5
Upon the exercise of a put option written by the Fund, the Fund may
suffer a loss equal to the difference between the price at which the Fund is
required to purchase the underlying security and its market value at the time
of the option exercise, less the premium received for writing the option.
Upon the exercise of a call option written by the Fund, the Fund may suffer a
loss equal to the excess of the security's market value at the time of the
option exercise over the Fund's acquisition cost of the security, less the
premium received for writing the option.
Whenever the Fund writes a call option it will continue to own or
have the present right to acquire the underlying security for as long as it
remains obligated as the writer of the option. To support its obligation to
purchase the underlying security if a put option is exercised, the Fund will
either (a) deposit with the Fund's custodian in a segregated account, cash,
U.S. Government Securities or other high-grade debt obligations having a
value at least equal to the exercise price of the underlying securities or
(b) continue to own an equivalent number of puts of the same "series" (that
is, puts on the same underlying security having the same exercise prices and
expiration dates as those written by the Fund), or an equivalent number of
puts of the same "class" (that is, puts on the same underlying security) with
exercise prices greater than those that it has written (or, if the exercise
prices of the puts it holds are less than the exercise prices of those it has
written, it will deposit the difference with the Fund's custodian in a
segregated account).
The Fund may engage in a closing purchase transaction to realize a
profit or limit a loss, to prevent an underlying security from being called
or put or, in the case of a call option, to unfreeze an underlying security
(thereby permitting its sale or the writing of a new option on the security
prior to the outstanding option's expiration). To effect a closing purchase
transaction, the Fund would purchase, prior to the holder's exercise of an
option that the Fund has written, an option of the same series as that on
which the Fund desires to terminate its obligation. The obligation of the
Fund under an option that it has written would be terminated by a closing
purchase transaction, but the Fund would not be deemed to own an option as
the result of the transaction. There can be no assurance that the Fund will
be able to effect closing purchase transactions at a time when it wishes to
do so. To facilitate closing purchase transactions, however, the Fund will
ordinarily write options only if a secondary market for the options exists on
a national securities exchange or in the over-the-counter market.
CERTAIN PORTFOLIO SECURITIES
FOREIGN SECURITIES. The Fund may purchase securities of foreign
issuers, and may invest in obligations of foreign branches of domestic banks
and domestic branches of foreign banks. Investment in foreign securities
presents certain risks, including those resulting from fluctuations in
currency exchange rates, revaluation of currencies, adverse political and
economic developments and the possible imposition of currency exchange
blockages or other foreign governmental laws or restrictions, reduced
availability of public information concerning issuers, and the fact that
foreign issuers are not generally subject to uniform accounting, auditing and
financial reporting standards or to other regulatory practices and
requirements comparable to those applicable to domestic issuers. Moreover,
securities of many foreign issuers may be less liquid and their prices more
volatile than those of securities 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 are readily marketable 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 which can be sold
Page 6
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 Company's Board of Trustees. 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 institutional buyers become, for a time, uninterested in
purchasing these securities.
LOW-RATED AND COMPARABLE UNRATED SECURITIES. Low-rated and comparable
unrated securities (collectively referred to in this discussion as "low
rated" securities) will likely have some quality and protective
characteristics that, in the judgment of the rating organization, are
outweighed by large uncertainties or major risk exposures to adverse
conditions; and are predominantly speculative with respect to the issuer's
capacity to pay interest and 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.
STOCK INDEX OPTIONS. The Fund may purchase and write exchange-listed
put and call options on stock indexes to hedge against risks of market-wide
price movements. A stock index measures the movement of a certain group of
stocks by assigning relative values to the common stocks included in the
index. (Examples of well-known stock indexes are the Standard & Poor's 500
Composite Stock Price Index and the New York Stock Exchange Composite Index.)
Options on stock indexes are similar to options on securities. However,
because options on stock indexes do not involve the delivery of an underlying
security, the option represents the holder's right to obtain from the writer
in cash a fixed multiple of the amount by which the exercise price exceeds
(in the case of a put) or is less than (in the case of a call) the closing
value of the underlying index on the exercise date.
The advisability of using stock index options to hedge against the
risk of market-wide movements will depend on the extent of diversification of
the Fund's stock investments and the sensitivity of its stock investments to
factors influencing the underlying index. The effectiveness of purchasing or
writing stock index options as a hedging technique will depend upon the
extent to which price movements in the portion of the portfolio being hedged
correlate with price movements in the stock index selected.
Page 7
REPURCHASE AGREEMENTS. The Fund may engage in repurchase agreements
transactions in pursuit of its investment objective. 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 limit on illiquid securities
stated above.
OTHER INVESTMENT COMPANIES. The Fund may invest in securities issued
by other investment companies to the extent that such investments are
consistent with its investment objectives and policies and 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 long-term growth of capital not for short-term
trading profits, Fund's turnover rate of the Fund 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, security transactions for the Fund
will be based only upon investment considerations and will not be limited by
any other considerations when Dreyfus deems it appropriate to make changes in
the Fund's assets.
RISK FACTORS
As with any equity fund, the value of your investment in the Fund may
fluctuate in response to movements in the stock market as a whole. In
addition, the ability of the Fund to invest in foreign securities, illiquid
securities and low-rated and unrated debt securities, and to purchase and
sell certain instruments (including writing certain options), may increase
the Fund's investment risks and opportunities. See "Certain Portfolio
Securities" and "Investment Techniques-Covered Options Writing" in this
Prospectus and "Investment Objectives and Management Policies" in the SAI.
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. As a fundamental policy, the Fund
may not (i) borrow money in an amount exceeding 331/3% of the Fund's total
assets at the time of borrowing; (ii) make loans or lend securities in excess
of 331/3% of the Fund's total assets; (iii) purchase, with respect to 75% of
the Fund's total assets, securities of any one issuer representing more than
5% of the Fund's total assets (other than securities issued or guaranteed by
the U.S. Government, its agencies and instrumentalities) or more than 10% of
that issuer's outstanding voting securities; and (iv) invest more than 25% of
the value of the Fund's total assets in the securities of one or more issuers
conducting their principal activities in the same industry; provided that
there shall be no such limitation on investments in obligations of the U.S
Government, state and municipal governments and their political subdivisions
or investments in domestic banks, including U.S. branches of foreign banks
and foreign branches of U.S. banks. The SAI describes all of the Fund's
fundamental and non-fundamental restrictions.
The investment objectives, policies, restrictions, practices and
procedures of the Fund, unless otherwise specified, may be changed without
shareholder approval. If the Fund's investment objectives, polici-
Page 8
es, restrictions, practices or procedures change, shareholders should consider
whether the Fund remains an appropriate investment in light of their then
current position and needs.
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, 1997, Dreyfus managed or administered
approximately $82 billion in assets for more than 1.7 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 one or more third parties to provide, 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 a committee of portfolio managers of Dreyfus
and no person is primarily responsible for making recommendations to the
committee. This committee also comprises the Equity Policy Group of The
Boston Company Asset Management, Inc. which is an indirect wholly-owned
subsidiary of Mellon.
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 $233 billion in assets as of
December 31, 1996, including $86 billion in mutual fund assets. As of
December 31, 1996, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
more than $1,046 billion in assets, including approximately $57 billion in
mutual fund assets.
Under the Investment Management Agreement, the Fund is contractually
obligated to pay a fee computed daily, and paid monthly, at the annual rate
of .90% of the Fund's average daily net assets. 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. In order to compensate Dreyfus for
paying virtually all of the Fund's expenses, the Fund's investment management
fee is higher than the investment advisory fees paid by most investment
companies. Most, if not all, such companies also pay for a portion of the
non-investment advisory expenses that are not paid by such companies'
investment advisers. Although Dreyfus does not pay the fees and expenses of
the non-interested Trustees (including counsel fees), Dreyfus is
contractually required to reduce its investment management fee by an amount
equal to the Fund's allocable share of such fees and expenses. 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 year ended December 31, 1996, the Fund paid Dreyfus 0.88% of
its average daily net assets in investment management fees (net of fees
waived).
For the fiscal year ended December 31, 1996, total operating expenses
(excluding Rule 12b-1 fees) (net of fees waived) of the Fund were 0.88% of
the average daily net assets of the Investor Class, the Institutional Class
and Class R, respectively. For more information concerning Investor or Class
R shares, see the current prospectus for Investor or Class R shares.
Page 9
In addition, Institutional and Investor shares may be subject to
certain distribution and shareholder servicing fees. See "Distribution Plan."
Dreyfus may pay the Fund's distributor for shareholder services from
Dreyfus' own assets, including past profits but not including the management
fee paid by the Fund. The Distributor may use part or all of such payments to
pay Agents in respect of these services.
In allocating brokerage transactions for the Fund, Dreyfus seeks to
obtain the best execution of orders at the most favorable net price. Subject
to this determination, Dreyfus may consider, among other things, the receipt
of research services and/or the sale of shares of the Fund or other funds
managed, advised or administered by Dreyfus as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. See "Portfolio
Transactions" in the SAI.
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 objectives,
policies and restrictions, the Fund may invest in securities of companies
with which Mellon Bank has a lending relationship.
DISTRIBUTOR. The Fund's distributor is Premier Mutual Fund Services,
Inc. The Distributor is located at 60 State Street, Boston, Massachusetts
02109. The Distributor is a wholly-owned subsidiary of FDI Distribution
Services, Inc., a provider of mutual fund administration services, which in
turn is a wholly-owned 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,
Pennsylvania 15258) is the Fund's custodian. The Fund's Transfer and Dividend
Disbursing Agent is Dreyfus Transfer, Inc. (the "Transfer Agent"), a
wholly-owned subsidiary of Dreyfus, located at One American Express Plaza,
Providence, Rhode Island 02903. Premier Mutual Fund Services, Inc. serves as
the Fund's sub-administrator and, pursuant to a Sub-Administration Agreement,
provides various administrative and corporate secretarial services to the
Fund.
HOW TO BUY FUND SHARES
GENERAL. Institutional shares are offered to those customers of
certain financial planners and investment advisers who held shares of a
predecessor class of the Fund on April 4, 1994. In addition to Institutional
shares, the Fund also offers Investor and Class R shares through a separate
prospectus. Investor shares are offered to any investor and may be purchased
through the Distributor or Agents that have entered into Agreements with the
Distributor. Investor and Class R shares are not subject to a sales charge on
purchases or redemptions. Investor shares are subject to a Rule 12b-1 fee at
an annual rate of up to .25 of 1% of the Fund's average net assets
attributable to Investor shares. 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. For more information concerning Investor or Class R shares, see
the current prospectus for Investor and Class R shares. You may be charged a
fee if you effect transactions in Fund shares through an Agent.
Stock certificates are issued only upon your written request. The
Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500. Subsequent investments must
be at least $100.
Shares may be purchased by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds" or, if for Dreyfus retirement plan accounts, to "The
Dreyfus Trust Company, Custodian." For accounts other than Dreyfus retirement
plan accounts, payments which are mailed should be sent to Dreyfus Core Value
Fund, P.O. Box
Page 10
6587, Providence, Rhode Island 02940-6587. For subsequent investments, your
Fund account number should appear on the check and an investment slip should
be enclosed. For Dreyfus retirement plan accounts, payments which are mailed
should be sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor subsequent
investments should be made by third party check.
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. To purchase Institutional shares in
your name, immediately available funds may be transmitted by wire to Boston
Safe Deposit and Trust Company, together with the DDA# 044121/Dreyfus Core
Value Fund and applicable Class for purchase of Fund shares in your name. The
wire must indicate which Class of shares is being purchased and it must
include your Fund account number, account registration and dealer number, if
applicable. If your initial purchase of Fund shares is by wire, you should
call 1-800-645-6561 after completing your wire payment in order to obtain
your Fund account number. Please include your Fund account number on the
Fund's Account Application and promptly mail the Account Application to the
Fund, as no redemptions will be permitted until the Account Application is
received. You may obtain further information about remitting funds in this
manner from your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear. The
Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House ("ACH") member. You must
direct the institution to transmit immediately available funds through the
ACH System to Boston Safe Deposit and Trust Company with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and Fund account number PRECEDED BY THE DIGITS "4020".
The Distributor may pay dealers a fee of up to 0.5% 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 Taxpayer
Identification Number ("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 PER SHARE ("NAV"). An investment portfolio's NAV
refers to the worth of one share. The NAV for the Institutional shares of the
Fund is computed by adding with respect to that class of shares the value of
all the class' investments, cash, and other assets, deducting liabilities 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:
Page 11
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 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.
NAV is determined on each day that the New York Stock Exchange
("NYSE") is open (a "business day"), as of the close of business of the
regular session of the NYSE (usually 4 p.m. Eastern time). Investments and
requests to exchange or redeem shares received by the Transfer Agent in
proper form before such close of business are effective on, and will receive
the price determined on, that day (except investments made by electronic
funds transfer, which are effective two business days after your call). Invest
ment, exchange and redemption requests received after such close of business
are effective on, and receive the share price determined on, the next
business day.
The public offering price of Institutional shares, Investor shares
and Class R shares, all of which are offered on a continuous basis, is the
NAV of each respective Class.
DREYFUS 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 filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an ACH member
may be so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of Institutional shares by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452.
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 Institutional shares of the Fund,
shares of certain other eligible funds managed or administered by Dreyfus, to
the extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, please call 1-800-645-6561 to determine if
it is available and whether any conditions are imposed on its use.
Shareholders are limited to six exchanges out of the Fund during the calendar
year.
To request an exchange, you or 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
Page 12
account, or by a separate signed Shareholder Services Form, available by
calling 1-800-645-6561 or, by oral request from any of the authorized
signatories on the account, also by calling 1-800-645-6561. If you previously
have established the Telephone Exchange Privilege, you may telephone exchange
instructions (including over The Dreyfus TouchRegistration Mark Automated
Telephone System) by calling 1-800-645-6561. If calling from overseas, call
516-794-5452. See "How to Redeem Fund Shares_Procedures." Upon an exchange
into a new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Telephone Exchange Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER
Privilege and the dividends and distributions payment option (except for
Dreyfus Dividend Sweep) selected by you.
Shares will be exchanged at the next determined NAV; however, a sales
load may be charged with respect to exchanges of Institutional shares into
funds sold with a sales load. If you are exchanging Institutional shares into
a fund that charges a sales load, you may qualify for share prices which do
not include the sales load or which reflect a reduced sales load, if the
shares of the fund from which you are exchanging were: (a) purchased with a
sales load, (b) acquired by a previous exchange from shares purchased with a
sales load or, (c) acquired through reinvestment of dividends or other
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange you must notify the Transfer Agent or
your 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
and, therefore, an exchanging shareholder (other than a qualified Retirement
Plan) may realize a taxable gain or loss.
Dreyfus Auto-Exchange Privilege
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for
Institutional shares of the Fund, in shares of certain other eligible funds
in the Dreyfus Family of Funds of which you are currently an investor. 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 Institutional shares into
funds sold with a sales load. The right to exercise this Privilege may be
modified or canceled by the Fund or the Transfer Agent. You may modify or
cancel your exercise of this Privilege at any time by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 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 (other than a tax-exempt Retirement Plan) may realize
a taxable gain or loss. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain a Dreyfus Auto-Exchange Authorization Form, please
call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. At your option, the bank account
des-
Page 13
ignated by you will be debited in the specified amount, and Fund shares
will be purchased, once a month, on either the first or fifteenth day, or
twice a month, on both days. Only an account maintained at a domestic
financial institution which is an ACH member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of purchase at any time
by mailing written notification to The Dreyfus Family of Funds, P.O. Box
6587, Providence, Rhode Island 02940-6587, or, if to Dreyfus retirement plan
accounts to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and other distributions, if any, paid by the Institutional
shares of the Fund in shares of certain other eligible funds in 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. See "Shareholder Services" in the SAI. Dreyfus Dividend ACH
permits you to transfer electronically on the payment date dividends or
dividends and other distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial institution which
is an ACH member may be so designated. Banks may charge a fee for this
service.
For more information concerning these Privileges, or to request a
Dreyfus Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these Privileges by mailing written notification to The Dreyfus Family
of Funds, P.O. Box 6587, Providence, Rhode Island 02940-6587. Enrollment in
or cancellation of these Privileges is effective three business days
following receipt. These Privileges are available only for existing accounts
and may not be used to open new accounts. Minimum subsequent investments do
not apply for Dreyfus Dividend Sweep. The Fund may modify or terminate these
Privileges at any time or charge a service fee. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement plans
are not eligible for Dreyfus Dividend Sweep.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. You
should consider whether Direct Deposit of your entire payment into a fund
with fluctuating NAV, such as the Fund, may be appropriate for you. To enroll
in Dreyfus Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in this Privilege. The appropriate form may be obtained by
calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to
you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon the direct deposit program of your employer, you may have part or all of
your paycheck transferred to your existing Dreyfus account electronically
through the ACH system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you
Page 14
must file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 6587, Providence, Rhode Island 02940-6587.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, Dreyfus, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Dreyfus Payroll Savings
Plan. The Fund may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
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.
RETIREMENT PLANS
The Fund offers a variety of pension and profit-sharing plans,
including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts," 401(k)
Salary Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL. You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as described
below. When a request is received in proper form, the Fund will redeem the
shares at the next determined 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 when shares are redeemed directly through
the Distributor. Agents or other institutions may charge their clients a 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 DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH
MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE
Page 15
DREYFUS TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER
RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER
PURCHASE OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH
REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE
PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED
BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY
REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE,
AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has received your
Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if the NAV of your account is $500 or
less and remains so during the notice period.
PROCEDURES -- You may redeem Fund shares by using the regular
redemption procedure through the Transfer Agent, the Wire Redemption
Privilege, the Telephone Redemption Privilege or the Dreyfus TELETRANSFER
Privilege. 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 (including over The Dreyfus TouchRegistration Mark Automated
Telephone System) 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 redemption or an exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's NAV may fluctuate.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 6587, Providence, Rhode Island 02940-6587, or if for the Dreyfus
retirement plan accounts to the Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. THESE REQUESTS WILL BE FORWARDED
TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location
of the nearest Financial Center, please call the telephone number listed
under "General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature must
be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program. For
more information with respect to signature-guarantees, please call the
telephone number 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.
Page 16
WIRE REDEMPTION PRIVILEGE. You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check (maximum
$150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically
by check. Holders of jointly registered Fund or bank accounts may have
redemption proceeds of only up to $250,000 wired within any 30-day period.
You may telephone redemption requests by calling 1-800-645-6561 or, if
calling from overseas, 516-794-5452. The Fund reserves the right to refuse
any redemption request, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at any time by the Transfer
Agent or the Fund. The Fund's SAI sets forth instructions for transmitting
redemption requests by wire. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are not
eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE. You may redeem Fund shares (maximum
$150,000 per day) by telephone if you checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452. The Fund reserves
the right to refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount involved or the
number of such requests. This Privilege may be modified or terminated at any
time by the Transfer Agent or the Fund. Shares held under Keogh Plans, IRAs
or other retirement plans, and shares for which certificates have been
issued, are not eligible for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE. You may redeem Fund shares (minimum
$500 per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will
be transferred between your Fund account and the bank account designated in
one of these documents. Only such an account maintained in a domestic
financial institution which is an ACH member may be so designated. Redemption
proceeds will be on deposit in your account at an ACH member bank ordinarily
two days after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the Dreyfus
TELETRANSFER Privilege for transfer to their bank account only up to $250,000
within any 30-day period. The Fund reserves the right to refuse any request
made by telephone, including requests made shortly after a change of address,
and may limit the amount involved or the number of such requests. The Fund
may modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares issued in certificate
form, are not eligible for this Privilege.
DISTRIBUTION PLAN
Institutional and Investor shares are subject to a Distribution Plan
(the "Plan") adopted pursuant to Rule 12b-1 under the 1940 Act ("Rule
12b-1"). The Institutional and Investor shares of the Fund bear some of the
cost of selling those shares under the Plan. The Plan allows the Fund to
spend annually up to 0.15% of its average daily net assets attributable to
Institutional shares, and 0.25% of its average daily net assets attributable
to Investor shares, to compensate Dreyfus Service Corporation, an affiliate
of Dreyfus,
Page 17
for shareholder servicing activities and the Distributor for shareholder
servicing activities and for activities or expenses primarily intended to
result in the sale of Institutional and Investor shares of the
Fund. The Plan allows the Distributor to make payments from the Rule 12b-1
fees it collects from the Fund to compensate Agents that have entered into
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 Institutional or
Investor 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.
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.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund declares and pays dividends from its net investment income,
if any, four times yearly and distributes net realized capital 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 capital gains unless all capital loss
carryovers, if any, have been utilized or have expired. All expenses are
accrued daily and deducted before declaration of dividends to investors.
Dividends paid by each Class are calculated at the same time and in the same
manner and are in the same amount, except that the expenses attributable
solely to a particular Class will be borne exclusively by that Class.
Investor shares will receive lower per share dividends than Institutional and
Class R shares because of the higher expenses borne by the Investor shares.
Institutional shares will receive lower per share dividends than Class R
shares because of the higher expenses borne by the Institutional shares. See
"Expense Summary."
Investors other than qualified retirement plans may choose whether to
receive dividends and other distributions in cash or to receive dividends in
cash and reinvest other distributions in additional Fund shares at NAV, or to
reinvest both dividends and other distributions in additional Fund shares;
dividends and other distributions paid to qualified retirement plans are
reinvested automatically in additional Fund shares at NAV.
It is expected that the Fund will continue to qualify for treatment
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 and realized gains 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 (collectively, "divided distributions"), paid by the Fund are
taxable to U.S. shareholders, including certain non-qualified retirement
plans, as ordinary income whether to the extent of the Fund's earnings and
profits received in cash or reinvested in additional Fund shares. Distribution
s from the Fund's capital gain (the excess of net long-term capital gain over
short-term capital loss) are taxable to such shareholders as long-term
capital gains, regardless of how long the shareholders have held their Fund
shares and whether such distributions are received in cash or reinvested in
additional 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.
Dividend distributions paid by the Fund to a non-resident foreign
investor generally are subject to U.S. withholding tax at the rate of 30%,
unless the non-resident foreign investor claims the benefit of
Page 18
a lower rate specified in a tax treaty. Capital gain distributions paid by
the Fund to a non-resident foreign investor, as well as the proceeds of any
redemptions by such an investor regardless of the extent to which gain or
loss may be realized, generally are not 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 capital gain
distributions, if any, paid during the year.
Dividends and other distributions 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 distributions 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 591/2, 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 701/2 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. If a distributee of an "eligible rollover distribution" from a
qualified retirement plan does not elect to have the eligible rollover
distribution paid directly from the Plan to an eligible retirement plan in a
"direct rollover," the eligible rollover distribution is subject to a 20%
income tax withholding.
With respect to individual investors and certain non-qualified
retirement plans, Federal laws and regulations generally require the Fund to
withhold ("backup withholding") and remit to the U.S. Treasury 31% of
dividends, capital gain distributions and any redemption proceeds, regardless
of the extent to which gain or loss may be realized, paid to such a
shareholder if the 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 that the shareholder's 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 that a
shareholder's TIN is incorrect or if that shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account and may be claimed as a credit on the record
owner's Federal income tax return.
The Fund may be subject to a non-deductible 4% excise tax, measured
with respect to certain undistributed amounts of taxable investment income
and capital gains.
You should consult your tax advisers regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may be
calculated on the basis of average annual total return and/or total return.
These total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gains distributions made by
the Fund during the measuring period were reinvested in shares of the same
Class. These figures also take into account any applicable distribution and
shareholder servicing fees. As a result, at any given time, the
Page 19
performance of the Investor shares should be expected to be lower than that of
the Institutional shares and the performance of the Institutional shares
should be expected to be lower than that of Class R shares. Performance for
each Class will be calculated separately.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment was purchased with an initial
payment of $1,000 and that the investment was redeemed at the end of a stated
period of time, after giving effect to the reinvestment of dividends and
other distributions during the period. The return is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment at the end of the period. Advertisements
of the Fund's performance will include the Fund's average annual total
return for one, five and ten year periods, or for shorter periods depending
upon the length of time during which the Fund has operated. Computations of
average annual total return for periods of less than one year represent an
annualization of the Fund's actual total return for the applicable period.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and other distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the application
of the percentage rate of total return.
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 of such Class on the last day of that period. Since yields fluctuate,
yield data cannot necessarily be used to compare an investment in a Class of
shares with bank deposits, savings accounts, and similar investment
alternatives which often provide an agreed-upon or guaranteed fixed yield for
a stated period of time.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
The Fund may compare the performance of its shares with various
industry standards of performance including Lipper Analytical Services, Inc.
ratings, Standard and Poor's 500 Composite Stock Price Index, the Consumer
Price Index, and the Dow Jones Industrial Average. Performance rankings as
reported in CHANGING TIMES, BUSINESS WEEK, INSTITUTIONAL INVESTOR, THE WALL
STREET JOURNAL, MUTUAL FUND FORECASTER, NO LOAD INVESTOR, MONEY MAGAZINE,
MORNINGSTAR MUTUAL FUND VALUES, U.S. NEWS AND WORLD REPORT, FORBES, FORTUNE,
BARRON'S and similar publications may also be used in comparing the Fund's
performance. Furthermore, the Fund may quote its shares' total returns and
yields in advertisements or in shareholder reports. The Fund may also
advertise non-standardized performance information, such as total return for
periods other than those required to be shown or cumulative performance data.
The Fund may advertise a quotation of yield or other similar quotation
demonstrating the income earned or distributions made by the Fund.
GENERAL INFORMATION
The Company was organized as a business trust under the laws of the
Commonwealth of Massachusetts on March 30, 1979 under the name The Boston
Company Fund, changed its name effective April 4, 1994 to The Laurel Funds
Trust, and then changed its name to The Dreyfus/Laurel Funds Trust on October
17, 1994. The Company is registered with the SEC under the 1940 Act, as a
management investment company. The Fund is one of three investment portfolios
authorized by the
Page 20
Company's Board of Trustees. The Fund's shares are classified into three
Classes_ Institutional shares, Investor shares and Class R. The Company's
Agreement and Declaration of Trust permits the Board of Trustees to create an
unlimited number of investment portfolios (each a "fund") without shareholder
approval. The Company may in the future seek to achieve the Fund's investment
objectives by investing all of the Fund's net investable assets in another
investment company having the same investment objectives 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.
Each share (regardless of Class) has one vote. All shares of all
funds (and Classes thereof) vote together as a single class, except as to any
matter for which a separate vote of any fund or Class is required by the 1940
Act, and except as to any matter which affects the interests of one or more
particular funds or Classes, in which case only the shareholders of the
affected fund or Classes are entitled to vote, each as a separate class. Only
holders of Institutional or Investor shares will be entitled to vote on
matters submitted to shareholders pertaining to the Distribution 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, or by calling toll free
1-800-645-6561.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 21
[This Page Intentionally Left Blank]
Page 22
[This Page Intentionally Left Blank]
Page 23
Core Value
Fund --
Institutional Shares
Prospectus
Registration Mark
Copy Rights 1997 Dreyfus Service Corporation
392p050197
Page 24
DREYFUS PREMIER MANAGED INCOME FUND
PROSPECTUS MAY 1, 1997
Dreyfus Premier Managed Income Fund (the "Fund"), formerly
called the "Premier Managed Income Fund," is a separate, diversified
portfolio of The Dreyfus/Laurel Funds Trust, an open-end management
investment company (the "Company"), known as a mutual fund. The Fund
seeks high current income consistent with what is believed
to be prudent risk of capital. The Fund invests primarily 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.
The Statement of Additional Information ("SAI") dated May 1,
1997, 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. The SEC maintains a Web site (http://www.sec.gov) that
contains the SAI, material incorporated by reference, and other
information regarding the Fund. For a free copy of the SAI, 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 144.
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 AN
AFFILIATE OF MELLON BANK, N.A. ("MELLON BANK") 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.
- ------------------------------------------------------------------------------
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 maximum 4.0% 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.
Each Class of shares may be purchased or redeemed by
telephone using the TELETRANSFER Privilege.
TABLE OF CONTENTS
Expense Summary................................ 3
Financial Highlights........................... 4
Alternative Purchase Methods................... 9
Description of the Fund........................ 10
Management of the Fund......................... 17
How to Buy Fund Shares......................... 19
Shareholder Services........................... 24
How to Redeem Fund Shares...................... 28
Distribution Plans (Class A Plan and Class B and C Plans) 32
Dividends, Other Distributions and Taxes....... 33
Performance Information........................ 35
General Information............................ 36
Appendix....................................... 38
Page 2
<TABLE>
<CAPTION>
EXPENSE SUMMARY
CLASS A CLASS B CLASS C CLASS R
<S> <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 $59/173 $27/173 $ 7
3 YEARS $75 $87/543 $54 $22
5 YEARS $97 $116/923 $93 $39
10 YEARS $161 $164** $202 $87
</TABLE>
* A contingent deferred sales charge of 1.00% may be imposed on certain
redemptions of Class A shares purchased without an initial sales charge as
part of an investment of $1 million or more. See "How to Buy Fund
Shares--Class A Shares."
**Assumes conversion of Class B shares to Class A shares approximately six
years after the date of purchase and, therefore, reflects Class A expenses
for years seven through ten.
1 See "Distribution Plans (Class A Plan and Class B and C Plans)" for a
description of the Fund's Distribution Plans 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 less than .01% of the Fund's
net assets. (See "Management of the Fund")
3 Assuming no redemption of shares.
- ------------------------------------------------------------------------------
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. The information in the foregoing table does not reflect any fee
waivers or expense reimbursement arrangements that may be in effect.
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"). Certain banks, securities brokers and
dealers ("Securities Dealers") or other financial institutions (including
Mellon Bank and its affiliates) (collectively "Agents") may charge their
clients direct fees for effecting transactions in Fund shares; such fees are
not reflected in the foregoing table. See "Management of the Fund," "How to
Buy Fund Shares" and "Distribution Plans (Class A Plan and Class B and C
Plans)."
The Company understands that Agents (including Mellon Bank and its
affiliates) may charge fees to their clients who are owners of Fund 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 clients for various services provided in
connection with their accounts.
Page 3
FINANCIAL HIGHLIGHTS
The tables below are based upon a single Class A, Class B, Class C
and Class R share outstanding throughout each year or period and should
be read in conjunction with the financial statements, related notes and
report of independent auditors that appear in the Fund's Annual Report
dated December 31, 1996, and that are incorporated by reference in the
SAI. The financial statements included in the Fund's Annual Report dated
December 31, 1996
<TABLE>
<CAPTION>
DREYFUS PREMIER MANAGED INCOME FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR.*
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/96 12/31/95 12/31/94** 12/31/93## 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of year $11.08 $10.12 $11.38 $11.45 $11.41 $10.55 $11.12 $11.43 $11.29 $11.91
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations: 0.69 0.75 0.69# 0.78# 0.87 0.86 0.93 0.98 1.01 1.20
Net realized and
unrealized gain/(loss)
on investments (0.35) 0.96 (1.26) 0.83 0.10 0.86 (0.47) (0.36) 0.09 (0.52)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations 0.34 1.71 (0.57) 1.61 0.97 1.72 0.46 0.62 1.10 0.68
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net
investment income (0.69) (0.75) (0.69) (0.75) (0.87) (0.86) (1.03) (0.93) (0.96) (1.20)
Distributions in excess
of net investment income ._ ._ ._ ._ (0.06) ._ ._ ._ ._ ._
Distributions from net
realized gains ._ ._ ._ (0.57) ._ ._ ._ ._ ._ (0.10)
Distributions in excess
of net realized gains
on investments ._ ._ ._ (0.36) ._ ._ ._ ._ ._ ._
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total Distributions (0.69) (0.75) (0.69) (1.68) (0.93) (0.86) (1.03) (0.93) (0.96) (1.30)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value,
end of year $10.73 $11.08 $10.12 $11.38 $11.45 $11.41 $10.55 $11.12 $11.43 $11.29
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Total Return 3.42% 17.32% (5.14)% 14.54% 8.77% 17.03% 4.40% 5.56% 10.05% 5.96%
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Ratios/Supplemental data:
Net assets, end of
year (in 000's) $77,305 $80,782 $79,548 $58,052 $98,207 $84,203 $71,132 $83,912 $65,105 $51,765
Ratio of expenses to
average net assets 0.95% 0.95% 0.98% 1.14% 1.02% 1.13% 1.19% 1.15% 1.14% 0.94%
Ratio of net income to
average net assets 6.48% 7.08% 6.32% 6.55% 7.58% 7.91% 8.65% 8.76% 8.81% 10.30%
Portfolio turnover
rate 251.66% 236.10% 270% 333% 216% 119% 183% 142% 139% 306%
</TABLE>
* 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.
Page 4
FINANCIAL HIGHLIGHTS (CONTINUED)
have been audited by KPMG Peat Marwick LLP, independent
auditors. Further information about, and management's discussion of, the
Fund's performance is included in the Fund's Annual Report which may be
obtained without charge by writing to the address or calling the number
set forth on the cover page of this Prospectus.
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.
# 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.
Page 5
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
DREYFUS PREMIER MANAGED INCOME FUND
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT THE YEAR.
Class B Shares
YEAR YEAR
ENDED ENDED
12/31/96 12/31/95(1)
----------- -----------
<S> <C> <C>
Net Asset Value, beginning of period $11.08 $10.12
------- -------
INVESTMENT OPERATIONS:
Investment income-net 0.61 0.67
Net realized and unrealized gain on investments (0.35) 0.96
------- -------
Total from investment operations 0.26 1.63
------- -------
DISTRIBUTIONS:
Dividends from investment income-net (0.61) (0.67)
------- -------
TOTAL DISTRIBUTIONS (0.61) (0.67)
------- -------
Net Asset Value, end of period $10.73 $11.08
======= =======
TOTAL INVESTMENT RETURN(2) 2.54% 16.55%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.70% 1.69%
Ratio of net investment income to average net assets 5.77% 6.41%
Portfolio turnover rate 251.66% 236.10%
Net Assets, end of period (in 000's) $4,973 $2,236
(1) The Fund commenced offering Class B shares on December 19, 1994. Financial highlights for the period ended December 31,
1994 for Class B shares are not present because no shares had been issued
to the public as of that date.
(2) Exclusive of Sales Load.
</TABLE>
Page 6
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
DREYFUS PREMIER MANAGED INCOME FUND
FOR A CLASS C SHARE OUTSTANDING THROUGHOUT THE YEAR.
Class C Shares
YEAR YEAR
ENDED ENDED
12/31/96 12/31/95(1)
----------- -----------
<S> <C> <C>
Net Asset Value, beginning of period $11.08 $10.12
------- -------
INVESTMENT OPERATIONS:
Investment income-net 0.61 0.67
Net realized and unrealized gain on investments (0.35) 0.96
------- -------
Total from investment operations 0.26 1.63
------- -------
DISTRIBUTIONS:
Dividends from investment income-net (0.61) (0.67)
------- -------
TOTAL DISTRIBUTIONS (0.61) (0.67)
------- -------
Net Asset Value, end of period $10.73 $11.08
======= =======
TOTAL INVESTMENT RETURN(2) 2.49% 16.54%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.68% 1.66%
Ratio of net investment income to average net assets 5.69% 6.03%
Portfolio turnover rate 251.66% 236.10%
Net Assets, end of period (in 000's) $420 $67
(1) The Fund commenced offering Class C shares on December 19, 1994. Financial highlights for the period ended December 31,
1994 for Class C shares are not present because no shares had been issued
to the public as of that date.
(2) Exclusive of Sales Load.
</TABLE>
Page 7
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
DREYFUS PREMIER MANAGED INCOME FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED* ENDED
12/31/96 12/31/95 12/31/94** 12/31/93*##
Net asset value, beginning of period $11.08 $10.12 $11.38 $11.62
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Income from investment operations:
Net investment income 0.72 0.78 0.72# 0.74#
Net Realized and unrealized
gain/(loss) on investments (0.35) 0.96 (1.26) 0.67
-------- -------- -------- --------
Total from investment operations 0.37 1.74 (0.54) 1.41
-------- -------- -------- --------
Less Distributions:
Dividends from net investment income (0.72) (0.78) (0.72) (0.71)
Distributions from net realized
gains on investments ._ ._ ._ (0.61)
Distributions in excess of net realized gains
on investments ._ ._ ._ (0.33)
-------- -------- -------- --------
Total Distributions (0.72) (0.78) (0.72) (1.65)
-------- -------- -------- --------
Net Asset Value, end of period $10.73 $11.08 $10.12 $11.38
======== ======== ======== ========
Total Return 3.58% 17.70% (4.88)% 12.59%(1)
-------- -------- -------- --------
Ratios/Supplemental data:
Net Assets, end of period (in 000's) $12,567 $11,532 $9,588 $1,338(1)
Ratio of operating expenses to
average net assets 0.70% 0.70% 0.71% 0.83%(1)
Ratio of net investment income to
average net assets 6.74% 7.31% 6.59% 6.86%(1)
Portfolio turnover rate 251.66% 236.10% 270% 333%***
</TABLE>
* 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.
*** Not annualized.
Exclusive of sales load.
Without the voluntary reimbursement of expenses and/or waiver of fees
by the investment adviser and transfer agent, the ratio of 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 net investment income method
did not accord with results of operations.
(1) Annualized.
Page 8
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 shares."
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 (or, in the case of
Class B shares of the Fund acquired through exchanges of Class B shares
of another fund advised by Dreyfus, the date of purchase of the original
Class B shares of the fund exchanged), 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 service
plan fee of Class B shares and will be subject to the lower distribution
fee of Class A shares. (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 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 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. In addition, 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 and service fees 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 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
Page 9
account or relationship. Class A, Class B and Class C shares are primarily
sold to clients of Agents that have entered into Agreements with the
Distributor.
The decision as to which Class of shares is most 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, service fee and
CDSC, if any, on Class B or Class C shares would be less than the
accumulated distribution fee and initial sales charge on Class A shares
purchased at the same time, and to 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 and service fees
on Class B or Class C shares may exceed the accumulated distribution fee
and 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 ongoing distribution and service
fees. 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. The Fund
invests primarily in investment-grade corporate and U.S. Government
obligations and in obligations having maturities of 10 years or less.
The Fund seeks to achieve this objective by investing in U.S. Government
and agency securities, mortgage-backed securities and their derivatives,
debt securities of corporations including convertible and convertible
preferred issues, asset-backed securities, tax-exempt securities, foreign
issues including Yankee bonds, Eurobonds and non-U.S. dollar securities,
money market instruments, Rule 144A securities and derivative securities.
There is no assurance that the Fund will achieve its objective.
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 ("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. A discussion of the
Moody's and S&P rating categories is contained in Appendix B 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 cate-
Page 10
gories 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.
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 backed by the full faith and credit of the United
States or issued or guaranteed as to both principal and interest by the
U.S. Government or its agencies or instrumentalities. In addition to
direct obligations of the U.S. Treasury, 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 ("GNMA"), General Services
Administration and Maritime Administration carry the full faith and
credit of the United States. Other agencies obligations in which the Fund
may invest include those issued by the Federal Home Loan Mortgage
Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA"),
Federal Home Loan Banks and Student Loan Marketing Association.
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
Page 11
condition of the issuing entities. The Fund's net asset value generally
will not be stable and should fluctuate based upon changes 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 331\3% of the Fund's total
assets, taken at value. Loans of portfolio securities by the Fund will be
collateralized by cash, letters of credit or securities issued or
guaranteed by the U.S. Government or its agencies, which will be
maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities.
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 marketplace, 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 at least equal at all times to
the amounts of its when-issued and delayed delivery commitments.
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 as certain other forms of debt
securities. Conversely, in periods of sharply rising rates, prepayments
generally slow, increasing the security's average life and its potential
for price depreciation.
Page 12
COMMERCIAL PAPER. The Fund may invest in commercial paper.
These instruments are short-term obligations issued by banks and
corporations that have maturities ranging from 2 to 270 days. Each
instrument may be backed only by the credit of the issuer or may be
backed by some form of credit enhancement, typically in the form of a
guarantee by a commercial bank. Commercial paper backed by guarantees of
foreign banks may involve additional risk due to the difficulty of
obtaining and enforcing judgments against such banks and the generally
less restrictive regulations to which such banks are subject. The Fund
will only invest in commercial paper of U.S. and foreign companies rated
at the time of purchase at least A-1 by S&P, Prime-1 by Moody's, F-1 by
Fitch Investors Service LLP, Duff 1 by Duff & Phelps Rating Co., or A1 by
IBCA, Inc.
ECDS, ETDS AND YANKEE CDS. The Fund may invest in
EuroCertificates of Deposit ("ECDs"), EuroTime Deposits ("ETDs") and
Yankee CDs. ECDs are U.S. dollar-denominated certificates of deposit
issued by foreign branches of domestic banks. ETDs are U.S.
dollar-denominated time deposits in a foreign branch of a U.S. bank or a
foreign bank. Yankee CDs are certificates of deposit issued by a U.S.
branch of a foreign bank denominated in U.S. dollars and held in the
United States. ECDs, ETDs and Yankee CDs are subject to somewhat
different risks than are the obligations of domestic banks. See ("Foreign
Securities.")
EURODOLLAR BONDS AND NOTES. The Fund may invest in Eurodollar
bonds and notes. Eurodollar bonds and notes are obligations which pay
principal and interest in U.S. dollars held in banks outside the United
States, primarily in Europe. Investments in Eurodollar bonds and notes
involve risks that differ from investments in securities of domestic
issuers. See ("Foreign Securities.")
FOREIGN SECURITIES. The Fund may purchase securities of
foreign issuers and may invest in obligations of foreign branches of
domestic banks and domestic branches of foreign banks. 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,
adverse political and economic developments and the possible imposition
of currency exchange blockages or other foreign governmental laws or
restrictions, reduced availability of public information concerning
issuers, and the fact that foreign issuers are not generally subject to
uniform accounting, auditing and financial reporting standards or to
other regulatory practices and requirements comparable to those
applicable to domestic issuers. Moreover, securities of many foreign
issuers may be less liquid and their prices more volatile than those of
comparable domestic issuers. In addition, with respect to certain foreign
countries, there is the possibility of expropriation, confiscatory
taxation and limitations on the use or removal of funds or other assets
of the Fund, including withholding of dividends. Foreign securities may
be subject to foreign government taxes that would reduce the yield on
such securities.
ILLIQUID SECURITIES. The Fund will not knowingly invest more
than 15% of the value of its net assets in illiquid securities, including
time deposits and repurchase agreements having maturities longer than
seven days. Securities that have readily available market quotations are
not deemed illiquid for purposes of this limitation (irrespective of any
legal or contractual restric-
Page 13
tions 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. Securities rated B by
Moody's are judged to lack characteristics of desirable investment;
assurance of interest and principal payments or of maintenance or other
terms over any long period may be small. Securities rated B by S&P are
judged currently to have capacity to meet interest and principal payments,
but adverse business, financial or economic conditions will likely impair
capacity or willingness to make such payments. Securities rated Caa by
Moody's are judged to be of poor standing and may be in default or reflect
present elements of danger with respect to
Page 14
principal or interest. Securities rated CCC by S&P have a currently
identifiable vulnerability to default, and are dependent upon favorable
business, financial and economic conditions to meet timely payment of
interest and principal. Securities rated Ca by Moody's are judged to be
speculative in a high degree, often being in default or having other
marked short-comings. Securities rated CC by S&P typically are subordinated
to senior debt which is assigned an actual or implied CCC rating.
Securities rated C by S&P typically are subordinated to senior
debt which is assigned an actual or implied CCC- rating and may be used
to cover situations where a bankruptcy petition has been filed, but debt
service payments are continued.
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
government-related organizations, such as GNMA, FNMA and 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,
Page 15
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 a Fund that invests in mortgage-related
securities may be affected by reinvestment of prepayments at higher or
lower rates than the original investment.
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
Page 16
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 and/or long-term capital gains that, when
distributed to the Fund's shareholders, are taxable to them at the then
current rate. 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. As a fundamental policy,
the Fund may not (i) borrow money in an amount exceeding 331\3% of the
Fund's total assets at the time of borrowing; (ii) make loans or lend
securities in excess of 331\3% of the Fund's total assets; (iii) purchase,
with respect to 75% of the Fund's total assets, securities of any one
issuer representing more than 5% of the Fund's total assets (other than
securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities) or more than 10% of that issuer's outstanding voting
securities; and (iv) invest more than 25% of the value of the Fund's
total assets in the securities of one or more issuers conducting their
principal activities in the same industry; provided that there shall be
no such limitation on investments in obligations of the U.S Government,
state and municipal governments and their political subdivisions or
investments in domestic banks, including U.S. branches of foreign banks
and foreign branches of U.S. banks. 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.
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, 1997, Dreyfus managed or
administered approximately $82 billion in assets for more than 1.7 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 one or more third parties to provide,
investment advisory, administrative, custody, fund accounting and
transfer agency services to the Fund. As the Fund's investment manager,
Dreyfus manages the Fund by making investment decisions based on the
Fund's investment objective, policies and restrictions.
The Fund is managed by Arthur J. MacBride, III. Mr. MacBride
is an officer of The Boston Company Asset Management, Inc. He has been
employed by Dreyfus as a portfolio manager of the Fund since October 17,
1994.
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
Page 17
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 $233 billion in assets as of December 31,
1996, including approximately $86 billion in mutual fund assets. As of
December 31, 1996, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services,
for more than $1,046 billion in assets, including approximately $57
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. In order to
compensate Dreyfus for paying virtually all of the Fund's expenses, the
Fund's investment management fee is higher than the investment advisory
fees paid by most investment companies. Most, if not all, such companies
also pay for additional non-investment advisory expenses that are not
paid by such companies' investment advisers. Although Dreyfus does not
pay the fees and expenses of the non-interested Trustees (including
counsel fees), Dreyfus is contractually required to reduce its investment
management fee by an amount equal to the Fund's allocable share of such
fees and expenses. From time to time, Dreyfus may voluntarily waive a
portion of the investment management fees payable by the Fund. For the
fiscal year ended December 31, 1996, the Fund paid Dreyfus 0.70% of its
average daily net assets in investment management fees.
For the fiscal year ended December 31, 1996, total operating
expenses (excluding Rule 12b-1 fees) of each Class of the Fund were 0.70%
of the average daily net assets of each Class.
In addition, Class A, B and C shares may be subject to
certain distribution and shareholder servicing fees. See "Distribution
Plans (Class A Plan and Class B and C Plans)."
Dreyfus may pay the Fund's distributor for shareholder
services from Dreyfus' 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.
In allocating brokerage transactions for the Fund, Dreyfus
seeks to obtain the best execution of orders at the most favorable net
price. Subject to this determination, Dreyfus may consider, among other
things, the receipt of research services and/or the sale of shares of the
Fund or other funds managed, advised or administrated by Dreyfus as
factors in the selection of broker-dealers to execute portfolio
transactions for the Fund. See "Portfolio Transactions" in the SAI.
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.
Page 18
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
Services, Inc. The Distributor is located at 60 State Street, Boston,
Massachusetts 02109. The Distributor is a wholly-owned subsidiary of FDI
Distribution 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,
Pennsylvania 15258, is the Fund's custodian. The Fund's Transfer and
Dividend Disbursing Agent is Dreyfus Transfer, Inc. (the "Transfer
Agent"), a wholly-owned subsidiary of Dreyfus, located at One American
Express Plaza, Providence, Rhode Island 02903. Premier Mutual Fund
Services, Inc. serves as the Fund's sub-administrator and, pursuant to a
Sub-Administration Agreement, provides various administrative and
corporate secretarial services to 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 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.
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.
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 effecting
transactions in Fund shares for the accounts of their clients may charge
their clients direct fees in connection with such transactions.
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
Page 19
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 amounts that may be contributed
annually 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")
but these limitations generally 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
"The Dreyfus Premier Family of Funds," or if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments which are
mailed should be sent to Dreyfus Premier Managed Income Fund, P.O. Box
6587, Providence, Rhode Island 02940-6587. If you are opening a new
account, please enclose 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. For Dreyfus retirement plan accounts, payments which are
mailed should be sent to The Dreyfus Trust Company, Custodian, P.O. Box
6427, Providence, Rhode Island 02940-6427. Neither initial nor subsequent
investments should be made by third party check.
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 and
Trust Company together with the Fund's DDA # 044350/Dreyfus Premier
Managed Income Fund and applicable Class for purchase of Fund shares in
your name.
The wire must indicate which Class of shares is being
purchased and it 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 Company with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and Fund account number PRECEDED BY THE
DIGITS "4370" for Class A Shares, "4380" for Class B Shares, "4390" for
Class C Shares and "4400" for 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
Page 20
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 PER SHARE ("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. Shares of each Class of the
Fund are offered on a continuous basis. 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
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.
NAV is determined on each day that the New York Stock
Exchange ("NYSE") is open (a "business day"), as of the close of business
of the regular session of the NYSE (usually 4 p.m. Eastern time). Orders
received by the Transfer Agent in proper form before such close of
business are effective on, and will receive the price determined on, that
day (except purchase orders made through the Dreyfus TELETRANSFER
Privilege which are effective one business day after your call). Orders
received after such close of business are generally effective on and
receive the share price determined on the next business day, except as
provided below.
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 dealers'
responsibility to transmit orders so that they will be received by the
Distributor or its designee before the close of its business day.
CLASS A SHARES. The public offering price of Class A shares
is the NAV per share of that class plus a sales load as shown below:
Page 21
<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 one year of 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 Shares" (other
than the amount of the CDSC and its time periods) and "How to Redeem Fund
Shares -- Waiver of CDSC" 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
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 Benefit 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 Dreyfus 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.
Page 22
Class A shares also may be purchased at NAV, subject to
appropriate documentation, through a broker-dealer or other financial
institution with the proceeds from the redemption of shares of a
registered open-end management investment company not managed by Dreyfus
or its affiliates. The purchase of Class A shares of the Fund must be
made within 60 days of such redemption and the shareholder must have
either (i) paid an initial sales charge or a CDSC or (ii) been obligated
to pay at any time during the holding period, but did not actually pay on
redemption, a deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at NAV, subject to
appropriate documentation, by
(i) qualified separate accounts maintained by an insurance
company pursuant to the laws of any State or territory of the United
States, (ii) a State, county or city or instrumentality thereof, (iii) a
charitable organization (as defined in Section 501(c)(3) of the Code)
investing $50,000 or more in Fund shares, and (iv) a charitable remainder
trust (as defined in Section 501(c)(3) of the Code).
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 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 of that Class. No initial sales charge is imposed at the time of
purchase. A CDSC is imposed, however, 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 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 Dreyfus
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 previously 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.
Page 23
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 calling 1-800-554-4611
or, if calling from overseas, 516-794-5452.
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 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
1-800-554-4611 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, you or 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 1-800-554-4611.
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, available by calling 1-800-554-4611, or by
oral request from any of the authorized signatories on the account, by
calling 1-800-554-4611. If you previously have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including
over The Dreyfus TouchRegistration Mark Automated Telephone System) by
calling 1-800-554-4611 or, if calling from overseas, 516-794-5452. 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: 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
Page 24
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 Dreyfus
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 Dreyfus
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 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 con-
Page 25
cerning this privilege and the funds in the Dreyfus 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 1-800-554-4611.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction) at
regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both days. Only
an account maintained at a domestic financial institution which is an ACH
member may be so designated. To establish a Dreyfus-AUTOMATIC Asset
Builder account, you must file an authorization form with the Transfer
Agent. You may obtain the necessary authorization form by calling
1-800-554-4611. You may cancel your participation in this privilege or
change the amount of purchase at any time by mailing written notification
to Dreyfus 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 other distributions, if any, paid by the Fund in shares
of the same class of another fund in the Dreyfus Premier Family of Funds
or certain other funds in 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 other 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 1-800-554-4611.
You may cancel these privileges by mailing written notification to
Dreyfus 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
Page 26
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 Government Direct Deposit, you must file with the
Transfer Agent a completed Direct Deposit Sign-Up Form for each type of
payment that you desire to include in this privilege. The appropriate form
may be obtained by calling 1-800-554-4611. Death or legal incapacity will
terminate your participation in this privilege. You may elect at any time
to terminate your participation by notifying in writing the appropriate
Federal agency. Further, the Fund may terminate your participation upon
30 days' notice to you.
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 from the Automatic Withdrawal Plan. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-554-4611. 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.
No CDSC with respect to Class B shares will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the
amounts withdrawn under the plan do not exceed on an annual basis 12% of
the account value at the time the shareholder elects to participate in
the Automatic Withdrawal Plan. Withdrawals with respect to Class B shares
under the Automatic Withdrawal Plan that exceed on an annual basis 12% of
the value of the shareholder's account will be subject to a CDSC on the
amounts exceeding 12% of the initial account value. Class C shares, and
Class A shares to which a CDSC applies, that are 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
1-800-554-4611; 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.
Page 27
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.
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 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 DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY
SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR
PURCHASE CHECK, TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER
ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE
FUND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR
PURSUANT TO THE TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS
AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST
WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF
YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A
SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH
SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE
ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed
until the Transfer Agent has received your Account Application.
Page 28
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:
<TABLE>
<CAPTION>
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
----------------- ------------------------
<S> <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.
Page 29
For purposes of determining the applicable CDSC payable with
respect to redemption of Class B shares of the Fund where such shares
were acquired through exchange of Class B shares of another fund advised
by Dreyfus, the year since purchase payment was made is based on the date
of purchase of the original Class B shares of the fund exchanged.
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
(and to certain Class A 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
701\2 in the case of an IRA or Keogh plan or custodial account pursuant to
Section 403(b) of the Code, (e) with respect to Class B shares,
redemptions made pursuant to the Automatic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of
the value of the shareholder's account at the time the shareholder elects
to participate in the Plan, and (f) redemptions by such shareholders as
the SEC or its staff may permit. If the Company's Board of Trustees
determines 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. 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 (including over The Dreyfus
TouchRegistration Mark Automated Telephone System) 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.
Page 30
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 Dreyfus 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
1-800-554-4611.
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 calling
1-800-554-4611 or, if calling from overseas, 516-794-5452. Shares held
under 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.
Page 31
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. Upon written request, you may
reinvest up to the number of Class A or Class B shares you have redeemed,
within 45 days of redemption, at the then-prevailing NAV without a sales
load, or reinstate your account for the purpose of exercising Fund
Exchanges. Upon reinstatement, a Class B shareholder's account will be
credited with an amount equal to the CDSC previously paid upon redemption
of the Class B shares reinvested. The Reinvestment Privilege may be
exercised only once.
DISTRIBUTION PLANS
(CLASS A PLAN AND CLASS B AND 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 the Distributor for shareholder servicing
activities and for activities or expenses primarily intended to result in
the sale of Class A shares of the Fund. The Plan allows the Distributor
to make payments from the Rule 12b-1 fees it collects from the Fund to
compensate Agents that have entered into 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 SHARES -- 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 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
Page 32
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 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. See the SAI for more details on the Distribution and
Service Plans.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund declares daily and pays dividends monthly from its
net investment income, if any, and distributes net realized capital
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 capital gains
unless all capital loss carryovers, if any, have been utilized or have
expired. 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 through the business day prior to the day of redemption.
Dividends paid by each Class are calculated at the same time and in the
same manner and are in the same amount, except that the expenses
attributable solely to a particular Class are 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."
Investors other than qualified Retirement Plans may choose
whether to receive dividends and other distributions in cash to receive
distributions in cash and reinvest other distributions in additional Fund
shares at NAV, or to reinvest both dividends and other distributions in
additional Fund shares at NAV; dividends and other distributions paid to
qualified Retirement Plans are reinvested automatically in additional
Fund shares at NAV.
It is expected that the Fund will continue to qualify for
treatment 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 (collectively, "dividend distributions"),
paid by the Fund are taxable to U.S. shareholders, including certain
non-qualified Retirement Plans, as ordinary income to the extent of the
Fund's earnings and profits whether received in cash or reinvested in
Fund shares. Distributions from the Fund's net capital gain (the excess
of net long-term capital gain over short-term capital loss) are taxable
to such shareholders as long-term capital gains, regardless of how long
the shareholders have held their Fund shares and whether such
distributions are received in cash or reinvested in additional Fund
shares. The
Page 33
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.
Dividend distributions paid by the Fund to a non-resident
foreign investor generally are subject to U.S. withholding tax at the
rate of 30%, unless the non-resident foreign investor claims the benefit
of a lower rate specified in a tax treaty. Capital gain distributions
paid by the Fund to a non-resident foreign investor, as well as the
proceeds of any redemptions by such an investor, regardless of the extent
to which gain or loss may be realized, generally are not 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 capital gain distributions, 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 and other distributions 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 distributions 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 591\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 701\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. If a
distributee of an "eligible rollover distribution" from a qualified
Retirement Plan does not elect to have the eligible rollover distribution
paid directly from the Plan to an eligible retirement plan in a "direct
rollover," the eligible rollover distribution is subject to a 20% income
tax withholding.
With respect to individual investors and certain
non-qualified Retirement Plans, Federal laws and regulations generally
require the Fund to withhold ("backup withholding") and remit to the U.S.
Treasury 31% of dividends, distributions and any redemption proceeds,
regardless of the extent to which gain or loss may be realized, paid to
such shareholder if the 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 that the shareholder is
subject to backup
Page 34
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
that shareholder's TIN is incorrect or if that shareholder has failed to
properly report taxable dividend and interest income on a Federal income
tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account and may be
claimed as a credit on the record owner's Federal income tax return.
The Fund may be subject to a non-deductible 4% excise tax,
measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax advisers regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class may
be calculated on the basis of average annual total return and/or total
return. These total return figures reflect changes in the price of the
shares and assume that any income dividends and/or capital gain
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 distribution and shareholder servicing 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. Advertisements of the Fund's performance will include the
Fund's average annual total return for one, five and ten year periods, or
for shorter periods depending upon the length of time during which the
Fund has operated. Computations of average annual total return for
periods of less than one year represent an annualization of the Fund's
actual total return for the applicable period.
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 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
Page 35
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, 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 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") without shareholder approval. The Company may in the future
seek to achieve the Fund's investment objective by investing all of the
Fund's net investable assets in another investment company having the
same investment objective and substantially the same investment policies
and restrictions as those applicable to the Fund. Shareholders of the
Fund will be given at least 30 days prior notice of any such investment.
Each share (regardless of Class) has one vote. All shares of
all funds (and Classes thereof) vote together as a single class, except
as to any matter for which a separate vote of any fund or Class is
required by the 1940 Act, and except as to any matter which affects the
interests of one or more particular funds or Classes, in which case only
the shareholders of the affected fund or Classes are entitled to vote,
each as a separate class. Only holders of Class A, B or C shares, as the
case may be, will be entitled to vote on matters submitted to
shareholders pertaining to Distribution or Service Plans 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
Page 36
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 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.
Page 37
APPENDIX
RATINGS--Securities rated Ba by Moody's are judged to have
speculative elements; their future cannot be considered as well assured
and often the protection of interest and principal payments may be very
moderate. Securities rated BB by S&P are regarded as having predominantly
speculative characteristics and, while such obligations have less
near-term vulnerability to default than other speculative grade debt,
they face major ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to inadequate capacity
to meet timely interest and principal payments. Securities rated Caa by
Moody's are of poor standing and may be in default or there may be
present elements of danger with respect to principal or interest. S&P
typically assign a CCC rating to debt which has a current identifiable
vulnerability to default and is dependent upon favorable business,
financial and economic conditions to meet timely payments of interest and
repayment of principal. Such securities, though high yielding, are
characterized by great risk. See "Appendix" in the SAI for a general
description of securities ratings.
The ratings of Moody's and S&P represent their opinions as to
the quality of the obligations which they undertake to rate. Ratings are
relative and subjective and, although ratings may be useful in evaluating
the safety of interest and principal payments, they do not evaluate the
market value risk of such obligations. Although these ratings may be an
initial criterion for selection of portfolio investments, Dreyfus also
will evaluate these securities and the ability of the issuers of such
securities to pay interest and principal. The Fund's ability to achieve
its investment objective may be more dependent on Dreyfus' credit
analysis than might be the case for a fund that invested in higher rated
securities.
The average distribution of investments of the Dreyfus
Premier Managed Income Fund in corporate bonds by ratings for the fiscal
year ended December 31, 1996, calculated monthly on a dollar weighted
basis, was as follows:
MOODY'S OR S&P PERCENTAGE
------------- ------ -----------------
Aaa AAA 58.8%
Aa AA 2.8%
A A 14.2%
Baa BBB 6.5%
Ba BB 11.1%
B B 6.0%
-------
99.4%*
=======
The actual distribution of the Dreyfus Premier Managed Income
Fund's corporate bond investments by ratings on any given date will vary.
In addition, the distribution of the Dreyfus Premier Managed Income
Fund's investments by ratings as set forth above should not be considered
as representative of the Dreyfus Premier Managed Income Fund's future
portfolio composition.
* Approximately .6% of the Fund's assets were invested in cash or cash
equivalents.
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 38
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Page 39
Copy Rights 1997 Dreyfus Service Corporation 349p050197
Page 40
_____________________________________________________________________________
DREYFUS CORE VALUE FUND
INVESTOR, INSTITUTIONAL AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
May 1, 1997
_____________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
describing the Class R and Investor shares of the Dreyfus Core Value Fund
(formerly, the Laurel Capital Appreciation Fund) (the "Fund") and the current
Prospectus describing the Institutional shares of the Fund, each dated
May 1, 1997, as they may be revised from time to time. The Fund is a
separate, diversified portfolio of The Dreyfus/Laurel Funds Trust (the
"Trust"), an open-end management investment company known as a mutual fund.
To obtain a copy of the Fund's Prospectuses, please write to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call the
following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and outside of Canada -- Call 516-794-5452
The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
manager.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies B-2
Management of the Fund B-15
Management Arrangements B-21
Purchase of Fund Shares B-23
Distribution Plan B-24
Redemption of Fund Shares B-25
Shareholder Services B-26
Determination of Net Asset Value B-30
Dividends, Other Distributions and Taxes B-30
Portfolio Transactions B-35
Performance Information B-37
Information About the Fund B-38
Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors B-39
Financial Statements B-40
INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Description of the Fund."
Portfolio Securities
Foreign Securities. The Fund may invest in securities of foreign
issuers, including investments in obligations of foreign branches of domestic
banks and domestic branches of foreign banks. Investment in foreign
securities presents certain risks, including those resulting from
fluctuations in currency exchange rates, reevaluation of currencies, future
political and economic developments and the possible imposition of currency
exchange blockages or other foreign governmental laws or restrictions,
reduced availability of public information concerning issuers and the fact
that foreign issuers are not generally subject to uniform accounting,
auditing and financial reporting standards or to other regulatory practices
and requirements comparable to those applicable to domestic issuers.
Moreover, securities of many foreign issuers may be less liquid and their
prices more volatile than those of securities 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
dividends.
U.S. Government Securities. The Fund may invest in U.S. Government
Securities that are direct obligations of the U. S. Treasury, or that are
issued by agencies and instrumentalities of the U.S. Government and supported
by the full faith and credit of the U.S. Government. These include Treasury
notes, bills and bonds and securities issued by the Government National
Mortgage Association ("GNMA"), the Federal Housing Administration, the
Department of Housing and Urban Development, the Export-Import Bank, the
Farmers Home Administration, the General Services Administration, the
Maritime Administration and the Small Business Administration.
The Fund may also invest in U.S. Government Securities that are not
supported by the full faith and credit of the U.S. Government. These include
securities issued by the Federal National Mortgage Association ("FNMA"), the
Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Home Loan Banks,
Tennessee Valley Authority, Student Loan Marketing Association and District
of Columbia Armory Board. Because the U.S. Government is not obligated by law
to provide support to an instrumentality it sponsors, the Fund will invest in
obligations issued by such an instrumentality only when Dreyfus determines
that the credit risk with respect to the instrumentality does not make its
securities unsuitable for investment by the Fund.
GNMA certificates represent ownership interests in a pool of mortgages
issued by a mortgage banker or other mortgagee. Distributions on GNMA
certificates include principal and interest components. GNMA, a corporate
instrumentality of the U.S. Department of Housing and Urban Development,
guarantees timely payment of principal and interest on GNMA certificates;
this guarantee is deemed a general obligation of the United States, backed by
its full faith and credit.
Each of the mortgages in a pool supporting a GNMA certificate is insured
by the Federal Housing Administration or the Farmers Home Administration, or
is insured or guaranteed by the Veterans Administration. The mortgages have
maximum maturities of 40 years. Government statistics indicate, however,
that the average life of the underlying mortgages is shorter, due to
scheduled amortization and unscheduled repayments (attributable to voluntary
prepayments or foreclosures).
FNMA and FHLMC are Government sponsored corporations owned entirely by
private stockholders. Each is subject to general regulation by an official
of the Department of Housing and Urban Development. FNMA and FHLMC purchase
residential mortgages from a list of approved seller/services which include
state and federally-chartered savings and loan associations, mutual savings
banks, commercial banks and credit unions and mortgage bankers. Pass-through
securities issued by FNMA and FHLMC are guaranteed by those entities as to
payment of principal and interest.
Bank Obligations. The Fund is permitted to invest in high-quality,
short-term money market instruments. The Fund may invest temporarily, and
without limitation in bank certificates of deposit, time deposits, and
bankers' acceptances when, in Dreyfus' opinion, a "defensive" investment
posture is warranted.
Certificates of deposit ("CDs") are short-term negotiable obligations of
commercial banks; time deposits ("TDs") are non-negotiable deposits
maintained in banking institutions for specified periods of time at stated
interest rates; and bankers' acceptances are time drafts drawn on commercial
banks by borrowers, usually in connection with international transactions.
Domestic commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to be members of
the Federal Reserve System and to be insured by the Federal Deposit Insurance
Corporation (the "FDIC"). Domestic banks organized under state law are
supervised and examined by state banking authorities but are members of the
Federal Reserve System only if they elect to join. In addition, all banks
whose certificates of deposit may be purchased by the Trust are insured by
the FDIC and are subject to Federal examination and to a substantial body of
Federal law and regulation. As a result of governmental regulations, domestic
branches of foreign banks are, among other things, generally required to
maintain specified levels of reserves, and are subject to other supervision
and regulations designed to promote financial soundness.
Obligations of foreign branches of domestic banks, such as CDs and TDs,
may be general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and by
governmental regulations. Payment of interest and principal upon obligations
of foreign banks and foreign branches of domestic banks may be affected by
governmental action in the country of domicile of the branch (generally
referred to as sovereign risk). Examples of such action would be the
imposition of currency controls, interest limitations, seizure of assets, or
the declaration of a moratorium. Evidence of ownership of portfolio
securities may be held outside of the United States, and the Trust may be
subject to the risks associated with the holdings of such property overseas.
Obligations of domestic branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by Federal and state
regulation as well as by governmental action in the countries in which the
foreign bank has its head office. In addition, there may be less publicly
available information about a domestic branch of a foreign bank than about a
domestic bank. The Trust will carefully consider these factors in making such
investments.
Low-Rated Securities. The Fund may invest in low-rated and comparable
unrated securities. The effect a recession might have on such securities is
not known. Any such recession, however, could severely disrupt the market for
such securities and adversely affect the value of such securities. Any such
economic downturn also could adversely affect the ability of the issuers of
such securities to repay principal and pay interest thereon.
The ratings of the various nationally recognized statistical rating
organizations ("NRSROs") such as Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's Ratings Service, a division of McGraw-Hill Companies,
Inc. ("S&P") generally represent the opinions of those organizations as to
the quality of the securities that they rate. Such ratings, however, are
relative and subjective, are not absolute standards of quality and do not
evaluate the market risk of the securities. Although Dreyfus uses these
ratings as a criterion for the selection of securities for the Fund, Dreyfus
also relies on its independent analysis to evaluate potential investments for
the Fund. The Fund's achievement of its investment objective may be more
dependent on Dreyfus' credit analysis of low-rated and unrated securities
than would be the case for a portfolio of higher-rated securities.
Subsequent to its purchase by the Fund, an issue of securities may cease
to be rated or its rating may be reduced below the minimum required for
purchase by the Fund. In addition, it is possible that an NRSRO might not
timely change its ratings of a particular issue to reflect subsequent events.
None of these events will require the sale of the securities by the Fund,
although Dreyfus will consider these events in determining whether the Fund
should continue to hold the securities. To the extent that the ratings given
by an NRSRO for securities may change as a result of changes in the rating
systems or due to a corporate reorganization of the NRSRO, the Fund will
attempt to use comparable ratings as standards for its investments in
accordance with the investment objectives and policies of the Fund.
The Fund intends to invest in these securities when their issuers will
be close to, or already have entered, reorganization proceedings. As a
result, it is expected that at or shortly after the time of acquisition by
the Fund, these securities will have ceased to meet their interest payment
obligations, and accordingly would trade in much the same manner as an equity
security. Consequently, the Fund intends to make such investments on the
basis of potential appreciation in the price of these securities, rather than
any expectation of realizing income.
Repurchase Agreements. The Fund may enter into repurchase agreements
with U.S. Government Securities dealers recognized by the Federal Reserve
Board, with member banks of the Federal Reserve System, or with other brokers
or dealers that meet the credit guidelines of the Board of Trustees. In a
repurchase agreement, the Fund buys a security from a seller that has agreed
to repurchase the same security at a mutually agreed upon date and price. The
Fund's resale price will be in excess of the purchase price, reflecting an
agreed upon interest rate. This interest rate is effective for the period of
time the Fund is invested in the agreement and is not related to the coupon
rate on the underlying security. Repurchase agreements may also be viewed as
a fully collateralized loan of money by the Fund to the seller. The period of
these repurchase agreements will usually be short, from overnight to one
week, and at no time will the Fund invest in repurchase agreements for more
than one year. The Fund will always require that it receive as collateral
securities whose market value including accrued interest is, and during the
entire term of the agreement remains, at least equal to 100% of the dollar
amount invested by the Fund in each agreement, and the Fund will make payment
for such securities only upon physical delivery or upon evidence of book
entry transfer to the account of the custodian. If the seller defaults, the
Fund might incur a loss if the value of the collateral securing the
repurchase agreement declines and might incur disposition costs in connection
with liquidating the collateral. In addition, if bankruptcy proceedings are
commenced with respect to the seller of a security which is the subject of a
repurchase agreement, realization upon the collateral by the Fund may be
delayed or limited. The Fund seeks to minimize the risk of loss through
repurchase agreements by analyzing the creditworthiness of the obligors under
repurchase agreements, in accordance with the credit guidelines of the
Trust's Board of Trustees.
Commercial Paper. The Fund may invest in commercial paper issued in
reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act of 1933 ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition under the
federal securities laws and generally is sold to investors who agree that
they are purchasing the paper for an investment and not with a view to public
distribution. Any resale by the purchaser must be pursuant to registration
or exemption therefrom. Section 4(2) paper is normally resold to other
investors through or with the assistance of the issuer or investment dealers
who make a market in Section 4(2) paper, thus providing liquidity. Pursuant
to guidelines established by the Trust's Board of Trustees, Dreyfus may
determine that Section 4(2) paper is liquid for the purposes of complying
with the Fund's investment restriction relating to investments in illiquid
securities.
Management Policies
The Fund engages, except as noted, in the following practices in
furtherance of its investment objective.
Derivative Instruments. The Fund may purchase and sell various
financial instruments ("Derivative Instruments"), such as options on U.S. and
foreign securities or indices of such securities. The index Derivative
Instruments the Fund may use may be based on indices of U.S. or foreign
equity securities. These Derivative Instruments may be used, for example, to
preserve a return or spread or to facilitate or substitute for the sale or
purchase of securities.
Hedging strategies can be broadly categorized as "short hedges" and
"long hedges." A short hedge is a purchase or sale of a Derivative
Instrument intended partially or fully to offset potential declines in the
value of one or more investments held in the Fund's portfolio. Thus, in a
short hedge the Fund takes a position in a Derivative Instrument whose price
is expected to move in the opposite direction of the price of the investment
being hedged.
Conversely, a long hedge is a purchase or sale of a Derivative
Instrument intended partially or fully to offset potential increases in the
acquisition cost of one or more investments that the Fund intends to acquire.
Thus, in a long hedge the Fund takes a position in a Derivative Instrument
whose price is expected to move in the same direction as the price of the
prospective investment being hedged. A long hedge is sometimes referred to
as an anticipatory hedge. In an anticipatory hedge transaction, the Fund
does not own a corresponding security and, therefore, the transaction does
not relate to a security the Fund owns. Rather, it relates to a security
that the Fund intends to acquire. If the Fund does not complete the hedge by
purchasing the security it anticipated purchasing, the effect on the Fund's
portfolio is the same as if the transaction were entered into for speculative
purposes.
Derivative Instruments on securities generally are used to hedge against
price movements in one or more particular securities positions that the Fund
owns or intends to acquire. Derivative Instruments on indices, in contrast,
generally are used to attempt to hedge against price movements in market
sectors in which the Fund has invested or expects to invest.
The use of Derivative Instruments is subject to applicable regulations
of the Securities and Exchange Commission ("SEC"), the several options and
futures exchanges upon which they are traded, the Commodity Futures Trading
Commission ("CFTC") and various state regulatory authorities. In addition,
the Fund's ability to use Derivative Instruments will be limited by tax
considerations. See "Dividends, Other Distributions and Taxes."
In addition to the instruments, strategies and risks described below and
in the Prospectus, Dreyfus expects to discover additional opportunities in
connection with other Derivative Instruments. These new opportunities may
become available as Dreyfus develops new techniques, as regulatory
authorities broaden the range of permitted transactions and as new techniques
are developed. Dreyfus may utilize these opportunities to the extent that
they are consistent with the Fund's investment objective, and permitted by
the Fund's investment policies and applicable regulatory authorities.
Special Risks. The use of Derivative Instruments involves special
considerations and risks, certain of which are described below. Risks
pertaining to particular Derivative Instruments are described in the sections
that follow.
(1) Successful use of most Derivative Instruments depends upon Dreyfus'
ability to predict movements of the overall securities and interest rate
markets, which requires different skills than predicting changes in the
prices of individual securities. There can be no assurance that any
particular strategy will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of a Derivative Instrument and price movements of the
investments being hedged. For example, if the value of a Derivative
Instrument used in a short hedge increased by less than the decline in value
of the hedged investment, the hedge would not be fully successful. Such a
lack of correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which Derivative Instruments are traded. The effectiveness of
hedges using Derivative Instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
securities being hedged.
Because there are a limited number of types of exchange-traded options
and futures contracts, it is likely that the standardized contracts available
will not match the Fund's current or anticipated investments exactly. The
Fund may invest in options contracts based on securities with different
issuers, maturities, or other characteristics from the securities in which it
typically invests, which involves a risk that the options position will not
track the performance of the Fund's other investments.
Options prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments match the Fund's investments
well. Options are affected by such factors as current and anticipated short-
term interest rates, changes in volatility of the underlying instrument, and
the time remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result from
differing levels of demand in the options markets and the securities markets,
from structural differences in how options and securities are traded, or from
imposition of daily price fluctuation limits or trading halts. The Fund may
purchase or sell options contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the Fund's options positions are poorly correlated with its other
investments, the positions may fail to produce anticipated gains or result in
losses that are not offset by gains in other investments.
(3) If successful, the above-discussed strategies can reduce risk of
loss by wholly or partially offsetting the negative effect of unfavorable
price movements. However, such strategies can also reduce opportunity for
gain by offsetting the positive effect of favorable price movements. For
example, if the Fund entered into a short hedge because Dreyfus projected a
decline in the price of a security in the Fund's portfolio, and the price of
that security increased instead, the gain from that increase might be wholly
or partially offset by a decline in the price of the Derivative Instrument.
Moreover, if the price of the Derivative Instrument declined by more than the
increase in the price of the security, the Fund could suffer a loss. In
either such case, the Fund would have been in a better position had it not
attempted to hedge at all.
(4) As described below, the Fund might be required to maintain assets
as "cover," maintain segregated accounts or make margin payments when it
takes positions in Derivative Instruments involving obligations to third
parties (i.e., Derivative Instruments other than purchased options). If the
Fund were unable to close out its positions in such Derivative Instruments,
it might be required to continue to maintain such assets or accounts or make
such payments until the position expired or matured. These requirements
might impair the Fund's ability to sell a portfolio security or make an
investment at a time when it would otherwise be favorable to do so, or
require that the Fund sell a portfolio security at a disadvantageous time.
The Fund's ability to close out a position in a Derivative Instrument prior
to expiration or maturity depends on the existence of a liquid secondary
market or, in the absence of such a market, the ability and willingness of
the other party to the transaction ("counterparty") to enter into a
transaction closing out the position. Therefore, there is no assurance that
any position can be closed out at a time and price that is favorable to the
Fund.
Cover for Derivative Instruments. Transactions using Derivative
Instruments may expose the Fund to an obligation to another party. The Fund
will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, futures or options, or (2)
cash and short-term liquid debt securities with a value sufficient at all
times to cover its potential obligations to the extent not covered as
provided in (1) above. The Fund will comply with SEC guidelines regarding
cover for Derivative Instruments and will, if the guidelines so require, set
aside cash, U.S. Government Securities or other liquid, high-grade debt
securities in a segregated account with its custodian in the prescribed
amount.
Assets used as cover or held in a segregated account cannot be sold
while the position in the corresponding Derivative Instrument is open, unless
they are replaced with other appropriate assets. As a result, the commitment
of a large portion of the Fund's assets to cover or segregated accounts could
impede portfolio management or the Fund's ability to meet redemption requests
or other current obligations.
Options. A call option gives the purchaser the right to buy, and
obligates the writer to sell, the underlying investment at the agreed upon
exercise price during the option period. A put option gives the purchaser
the right to sell, and obligates the writer to buy, the underlying investment
at the agreed upon exercise price during the option period. A purchaser of
an option pays an amount, known as the premium, to the option writer in
exchange for rights under the option contract.
Options on indices are similar to options on securities except that all
settlements are in cash and gain or loss depends on changes in the index in
question rather than on price movements in individual securities.
The purchase of call options can serve as a long hedge, and the purchase
of put options can serve as a short hedge. Writing put or call options can
enable the Fund to enhance income or yield by reason of the premiums paid by
the purchasers of such options. However, if the market price of the security
or other instrument underlying a put option declines to less than the
exercise price on the option, minus the premium received, the Fund would
expect to suffer a loss.
Writing call options can also serve as a limited short hedge because
declines in the value of the hedged investment would be offset to the extent
of the premium received for writing the option. However, if the investment
appreciates to a price higher than the exercise price of the call option, it
can be expected that the option will be exercised and the Fund will be
obligated to sell the investment at less than its market value.
Writing put options can serve as a limited long hedge because increases
in the value of the hedged investment would be offset to the extent of the
premium received for writing the option. However, if the investment
depreciates to a price lower than the exercise price of the put option, it
can be expected that the put option will be exercised and the Fund will be
obligated to purchase the investment at more than its market value.
The value of an option position will reflect, among other things, the
current market value of the underlying investment, the time remaining until
expiration, the relationship of the exercise price to the market price of the
underlying investment, the historical price volatility of the underlying
investment and general market conditions. Options that expire unexercised
have no value.
The Fund may effectively terminate its right or obligation under an
option by entering into a closing transaction. For example, the Fund may
terminate its obligation under a call or put option that it had written by
purchasing an identical call or put option; this is known as a closing
purchase transaction. Conversely, the Fund may terminate a position in a put
or call option it had purchased by writing an identical put or call option;
this is known as a closing sale transaction. Closing transactions permit the
Fund to realize profits or limit losses on an option position prior to its
exercise or expiration.
The Fund may purchase and sell both exchange-traded and over-the-counter
("OTC") options. Exchange-traded options in the United States are issued by
a clearing organization that, in effect, guarantees completion of every
exchange-traded option transaction. In contrast, OTC options are contracts
between the Fund and its counterparty (usually a securities dealer or a bank)
with no clearing organization guarantee. Thus, when the Fund purchases an
OTC option, it relies on the counterparty from whom it purchased the option
to make or take delivery of the underlying investment upon exercise of the
option. Failure by the counterparty to do so would result in the loss of any
premium paid by the Fund as well as the loss of any expected benefit of the
transaction. The Fund will enter into only those option contracts that are
listed on a national securities or commodities exchange or traded in the OTC
market for which there appears to be a liquid secondary market.
The Fund will not purchase or write OTC options if, as a result of such
transaction, the sum of (i) the market value of outstanding OTC options
purchased by the Fund, (ii) the market value of the underlying securities
covered by outstanding OTC call options written by the Fund, and (iii) the
market value of all other assets of the Fund that are illiquid or are not
otherwise readily marketable, would exceed 15% of the net assets of the Fund,
taken at market value. However, if an OTC option is sold by the Fund to a
primary U.S. Government Securities dealer recognized by the Federal Reserve
Bank of New York and the Fund has the unconditional contractual right to
repurchase such OTC option from the dealer at a predetermined price, then the
Fund will treat as illiquid such amount of the underlying securities as is
equal to the repurchase price less the amount by which the option is "in-the-
money" (the difference between the current market value of the underlying
securities and the option's strike price). The repurchase price with primary
dealers is typically a formula price that is generally based on a multiple of
the premium received for the option plus the amount by which the option is
"in-the-money."
The Fund's ability to establish and close out positions in exchange-
listed options depends on the existence of a liquid market. However, there
can be no assurance that such a market will exist at any particular time.
Closing transactions can be made for OTC options only by negotiating directly
with the counterparty, or by a transaction in the secondary market if any
such market exists. Although the Fund will enter into OTC options only with
major dealers in unlisted options, there is no assurance that the Fund will
in fact be able to close out an OTC option position at a favorable price
prior to expiration. In the event of insolvency of the counterparty, the
Fund might be unable to close out an OTC option position at any time prior to
its expiration.
If the Fund were unable to effect a closing transaction for an option it
had purchased, it would have to exercise the option to realize any profit.
The inability to enter into a closing purchase transaction for a covered call
option written by the Fund could cause material losses because the Fund would
be unable to sell the investment used as cover for the written option until
the option expires or is exercised.
The Fund may write only covered call options on securities. A call
option is covered if the Fund owns the underlying security or a call option
on the same security with a lower strike price.
Foreign Currency Strategies - Special Considerations. The Fund may use
Derivative Instruments on foreign currencies to hedge against movements in
the values of the foreign currencies in which the Fund's securities are
denominated. Such currency hedges can protect against price movements in a
security that the Fund owns or intends to acquire that are attributable to
changes in the value of the currency in which it is denominated. Such hedges
do not, however, protect against price movements in the securities that are
attributable to other causes.
The Fund might seek to hedge against changes in the value of particular
currency when no Derivative Instruments on that currency are available or
such Derivative Instruments are more expensive than certain other Derivative
Instruments. In such cases, the Fund may hedge against price movements in
that currency by entering into transactions using Derivative Instruments on
another currency or a basket of currencies, the values of which Dreyfus
believes will have a high degree of positive correlation to the value of the
currency being hedged. The risk that movements in the price of the
Derivative Instrument will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
The value of Derivative Instruments on foreign currencies depends on the
value of the underlying currency relative to the U.S. dollar. Because
foreign currency transactions occurring in the interbank market might involve
substantially larger amounts than those involved in the use of foreign
currency Derivative Instruments, the Fund could be disadvantaged by having to
deal in the odd lot market (generally consisting of transactions of less than
$1 million) for the underlying foreign currencies at prices that are less
favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis.
Quotation information generally is representative of very large transactions
in the interbank market and thus might not reflect odd-lot transactions where
rates might be less favorable. The interbank market in foreign currencies is
a global, round-the-clock market.
Settlement of transactions involving foreign currencies might be
required to take place within the country issuing the underlying currency.
Thus, the Fund might be required to accept or make delivery of the underlying
foreign currency in accordance with any U.S. or foreign regulations regarding
the maintenance of foreign banking arrangements by U.S. residents and might
be required to pay any fees, taxes and charges associated with such delivery
assessed in the issuing country.
Forward Contracts. A forward foreign currency exchange contract
("forward contract") is a contract to purchase or sell a currency at a future
date. The two parties to the contract set the number of days and the price.
Forward contracts are used as a hedge against future movements in foreign
exchange rates. The Fund may enter into forward contracts to purchase or
sell foreign currencies for a fixed amount of U.S. dollars or other foreign
currency.
Forward contracts may serve as long hedges -- for example, the Fund may
purchase a forward contract to lock in the U.S. dollar price of a security
denominated in a foreign currency that the Fund intends to acquire. Forward
contracts may also serve as short hedges -- for example, the Fund may sell a
forward contract to lock in the U.S. dollar equivalent of the proceeds from
the anticipated sale of a security denominated in a foreign currency or from
anticipated dividend or interest payments denominated in a foreign currency.
Dreyfus may seek to hedge against changes in the value of a particular
currency by using forward contracts on another foreign currency or basket of
currencies, the value of which Dreyfus believes will bear a positive
correlation to the value of the currency being hedged.
The cost to the Fund of engaging in forward contracts varies with
factors such as the currency involved, the length of the contract period and
the market conditions then prevailing. Because forward contracts are usually
entered into a principal basis, no fees or commissions are involved. When
the Fund enters into a forward contract, it relies on the counterparty to
make or take delivery of the underlying currency at the maturity of the
contract. Failure by the counterparty to do so would result in the loss of
any expected benefit of the transaction.
Buyers and sellers of forward contracts can enter into offsetting
closing transactions by selling or purchasing, respectively, an instrument
identical to the instrument purchased or sold. Secondary markets generally
do not exist for forward contracts, with the result that closing transactions
generally can be made for forward contracts only by negotiating directly with
the counterparty. Thus, there can be no assurance that the Fund will in fact
be able to close out a forward contract at a favorable price prior to
maturity. In addition, in the event of insolvency of the counterparty, the
Fund might be unable to close out a forward contract at any time prior to
maturity. In either event, the Fund would continue to be subject to market
risk with respect to the position, and would continue to be required to
maintain a position in the securities or currencies that are the subject of
the hedge or to maintain cash or securities in a segregated account.
The precise matching of forward currency contract amounts and the value
of the securities involved generally will not be possible because the value
of such securities measured in the foreign currency will change after the
forward contract has been established. Thus, the Fund might need to purchase
or sell foreign currencies in the spot (cash) market to the extent such
foreign currencies are not covered by forward contracts. The projection of
short-term currency market movements is extremely difficult, and the
successful execution of a short-term hedging strategy is highly uncertain.
Lending of Portfolio Securities. The Fund may lend securities from its
portfolio to brokers, dealers and other financial organizations. Such loans,
if and when made, may not exceed 33 1/3% of the Fund's total assets, taken at
value. The Fund may not lend portfolio securities to its affiliates without
specific authorization from the SEC. 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. From time to time, the Fund may return a part of
the interest earned from the investment of collateral received for securities
loaned to the borrower and/or a third party, which is unaffiliated with the
Fund and which is acting as a "finder."
By lending portfolio securities, the Fund can increase its income by
continuing to receive interest on the loaned securities as well as by either
investing the cash collateral in short-term instruments or by obtaining yield
in the form of interest paid by the borrower when U.S. Government Securities
are used as collateral. Requirements of the SEC, which may be subject to
future modifications, currently provide that the following conditions must be
met whenever portfolio securities are loaned: (1) the Fund must receive at
least 100% cash collateral or equivalent securities from the borrower; (2)
the borrower must increase such collateral whenever the market value of the
loaned securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loaned securities and any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection with
the loan; and (6) voting rights on the loaned securities may pass to the
borrower; however, if a material event adversely affecting the investment
occurs, the Trustees must terminate the loan and regain the right to vote the
securities. The risks in lending portfolio securities, as well as with other
extensions of secured credit, consist of possible delay in receiving
additional collateral or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially. Loans will
be made to firms deemed by Dreyfus to be of good standing and will not be
made unless, in the judgment of Dreyfus, the consideration to be earned from
such loans would justify the risk.
Master/Feeder Option. The Trust may in the future seek to achieve the
Fund's investment objectives by investing all of the Fund's assets in another
investment company having the same investment objectives and substantially
the same investment policies and restrictions as those applicable to the
Fund. Shareholders of the Fund will be given at least 30 days' prior notice
of any such investment. Such investment would be made only if the Trustees
determine it to be in the best interest of the Fund and its shareholders. In
making that determination, the Trustees will consider, among other things,
the benefits to shareholders and/or the opportunity to reduce costs and
achieve operational efficiencies. Although the Fund believes that the
Trustees will not approve an arrangement that is likely to result in higher
costs, no assurance is given that costs will be materially reduced if this
option is implemented.
Investment Restrictions
The following limitations have been adopted by the Fund. The Fund may
not change any of these fundamental investment limitations without the
consent of: (a) 67% or more of the shares present at a meeting of
shareholders duly called if the holders of more than 50% of the outstanding
shares of the Fund are present or represented by proxy; or (b) more than 50%
of the outstanding shares of the Fund, whichever is less. The Fund may not:
1. Purchase any securities which would cause more than 25% of the
value of the Fund's total assets at the time of such purchase to be invested
in the securities of one or more issuers conducting their principal
activities in the same industry. (For purposes of this limitation, U.S.
Government securities, and state or municipal governments and their political
subdivisions are not considered members of any industry. In addition, this
limitation does not apply to investments in domestic banks, including U.S.
branches of foreign banks and foreign branches of U.S. banks).
2. Borrow money or issue senior securities as defined in the
Investment Company Act of 1940, as amended (the "1940 Act") except that (a)
the Fund may borrow money in an amount not exceeding one-third of the Fund's
total assets at the time of such borrowings, and (b) the Fund may issue
multiple classes of shares. The purchase or sale of futures contracts and
related options shall not be considered to involve the borrowing of money or
issuance of senior securities.
3. Purchase with respect to 75% of the Fund's total assets securities
of any one issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more than
5% of the Fund's total assets would be invested in the securities of that
issuer, or (b) the Fund would hold more than 10% of the outstanding voting
securities of that issuer.
4. Make loans or lend securities, if as a result thereof more than
one-third of the Fund's total assets would be subject to all such loans. For
purposes of this limitation debt instruments and repurchase agreements shall
not be treated as loans.
5. Purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
Fund from investing in securities or other instruments backed by real estate,
including mortgage loans, or securities of companies that engage in real
estate business or invest or deal in real estate or interests therein).
6. Underwrite securities issued by any other person, except to the
extent that the purchase of securities and later disposition of such
securities in accordance with the Fund's investment program may be deemed an
underwriting.
7. Purchase or sell commodities except that the Fund may enter into
futures contracts and related options, forward currency contacts and other
similar instruments.
The Fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its investable assets in securities of a single
open-end management investment company with substantially the same investment
objectives, policies and limitations as the Fund.
The Fund has adopted the following additional non-fundamental
restrictions. These non-fundamental restrictions may be changed without
shareholder approval, in compliance with applicable law and regulatory
policy.
1. The Fund shall not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amounts to the securities
sold short, and provided that transactions in futures contracts and options
are not deemed to constitute selling short.
2. The Fund shall not purchase securities on margin, except that the
Fund may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection with futures
contracts and options shall not constitute purchasing securities on margin.
3. The Fund shall not purchase oil, gas or mineral leases (the Fund
may, however, purchase and sell the securities of companies engaging in the
exploration, development, production, refining, transportation, and marketing
of oil, gas, or minerals.)
4. The Fund will not purchase or retain the securities of any issuer
if the officers, Trustees of the Fund, its advisers, or managers, owning
beneficially more than one half of one percent of the securities of such
issuer, together own beneficially more than 5% of such securities.
5. The Fund will not purchase securities of issuers (other than
securities issued or guaranteed by domestic or foreign governments or
political subdivisions thereof), including their predecessors, that have been
in operation for less than three years, if by reason thereof, the value of
the Fund's investment in securities would exceed 5% of the Fund's total
assets. For purposes of this limitation, sponsors, general partners,
guarantors and originators of underlying assets may be treated as the issuer
of a security.
6. The Fund will invest no more than 15% of the value of its net
assets in illiquid securities, including repurchase agreements with remaining
maturities in excess of seven days, time deposits with maturities in excess
of seven days and other securities which are not readily marketable. For
purposes of this limitation, illiquid securities shall not include Section
4(2) paper and securities which may be resold under Rule 144A under the
Securities Act of 1933, provided that the Board of Trustees, or its delegate,
determines that such securities are liquid based upon the trading markets for
the specific security.
7. The Fund may not invest in securities of other investment
companies, except as they may be acquired as part of a merger, consolidation
or acquisition of assets and except to the extent otherwise permitted by the
1940 Act.
8. The Fund shall not purchase any security while borrowings
representing more than 5% of the Fund's total assets are outstanding.
9. The Fund will not purchase warrants if at the time of such
purchase: (a) more than 5% of the value of the Fund's assets would be
invested in warrants, or (b) more than 2% of the value of the Fund's assets
would be invested in warrants that are not listed on the New York or American
Stock Exchange (for purposes of this undertaking, warrants acquired by the
Fund in units or attached to securities will be deemed to have no value).
10. The Fund will not purchase puts, calls, straddles, spreads and any
combination thereof if by reason thereof the value of its aggregate
investment in such classes of securities will exceed 5% of its total assets
except that: (a) this limitation shall not apply to standby commitments, and
(b) this limitation shall not apply to the Fund's transactions in futures
contracts and options.
As an operating policy, the Fund will not invest more than 25% of the
value of the Fund's total assets, at the time of such purchase, in domestic
banks, including U.S. branches of foreign banks and foreign branches of U.S.
banks. The Board of Trustees may change this operating policy without
shareholder approval. Notice will be given to shareholders if this policy is
changed by the Board of Trustees.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in such percentage resulting from a change in the
values of assets will not constitute a violation of such restriction, except
as otherwise required by the 1940 Act.
MANAGEMENT OF THE FUND
Principal Shareholders
There were no shareholder(s) who owned 5% or more of the outstanding
Institutional shares of the Fund at March 31, 1997.
The following shareholder(s) owned 5% or more of the outstanding Class R
shares of the Fund at March 31, 1997: Boston Safe Deposit and Trust Company,
P.O. Box 3198, Pittsburgh, PA 15230-3198, 96% record.
There were no shareholder(s) who owned 5% or more of the outstanding
Investor shares of the Fund at March 31, 1997.
Federal Law Affecting Mellon Bank
The Glass-Steagall Act of 1933 prohibits national banks from engaging in the
business of underwriting, selling or distributing securities and prohibits a
member bank of the Federal Reserve System from having certain affiliations
with an entity engaged principally in that business. The activities of
Mellon Bank, N.A. ("Mellon Bank") in informing its customers of, and
performing, investment and redemption services in connection with the Fund,
and in providing services to the Fund as custodian, as well as Dreyfus'
investment advisory activities, may raise issues under these provisions.
Mellon Bank has been advised by counsel that the activities contemplated
under these arrangements are consistent with its statutory and regulatory
obligations.
Changes in either federal or state statutes and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as further judicial or administrative decisions or interpretations of
such future statutes and regulations, could prevent Mellon Bank or Dreyfus
from continuing to perform all or a part of the above services for its
customers and/or the Fund. If Mellon Bank or Dreyfus were prohibited from
serving the Fund in any of its present capacities, the Board of Trustees
would seek an alternative provider(s) of such services.
Trustees and Officers of the Trust
The Trust has a Board composed of eleven Trustees which supervises the
Trust's investment activities and reviews contractual arrangements with
companies that provide the Fund with services. The following lists the
Trustees and officers and their positions with the Trust and their present
and principal occupations during the past five years. Each Trustee who is an
"interested person" of the Trust as defined in the 1940 Act is indicated by
an asterisk. Each of the Trustees also serves as a Trustee of The
Dreyfus/Laurel Tax-Free Municipal Funds and as a Director of The
Dreyfus/Laurel Funds, Inc. (collectively, with the Trust, the "Dreyfus/Laurel
Funds").
o+RUTH MARIE ADAMS. Trustee of the Trust; Professor of English and Vice
President Emeritus, Dartmouth College; Senator, United Chapters of Phi
Beta Kappa; Trustee, Woods Hole Oceanographic Institution; from November
1995 to January 1997, Director, Access Capital Strategic Community
Investment Fund, Inc. - Institutional Investment Portfolio. Age: 81
years old. Address: 1026 Kendal Lyme Road, Hanover, New Hampshire
03755.
o+FRANCIS P. BRENNAN. Chairman of the Board of Trustees and Assistant
Treasurer of the Trust; Director and Chairman, Massachusetts Business
Development Corp. and from November 1995 to January 1997, Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio. Age: 79 years old. Address: Massachusetts Business
Development Corp., 50 Milk Street, Boston, Massachusetts 02109.
o+JOSEPH S. DiMARTINO. Trustee of the Trust since February 1995. Since
January 1995, Mr. DiMartino has served as Chairman of the Board of
various funds in the Dreyfus Family of Funds.. He is also Chairman of
the Board of Noel Group, Inc., a venture capital company and a Director
of the Muscular Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway, Inc., Curtis Industries, Inc., Simmons Outdoor
Corporation and Staffing Resources, Inc. Mr. DiMartino is also a Board
member of 152 other funds in the Dreyfus Family of Funds. For more than
five years prior to January 1995, he was President and a director of
Dreyfus and Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus. From August 1994 to
December 31, 1994, he was a director of Mellon Bank Corporation. From
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio and
Bank Portfolio. Age: 53 years old. Address: 200 Park Avenue, New York,
New York 10166.
o+JAMES M. FITZGIBBONS. Trustee of the Trust; Chairman, Howes Leather
Company, Inc.; Director, Fiduciary Trust Company. Chairman, CEO and
Director, Fieldcrest-Cannon Inc.; Director, Lumber Mutual Insurance
Company; Director, Barrett Resources, Inc.; from November 1995 to
January 1997, Director, Access Capital Strategic Community Investment
Fund, Inc. - Bank Portfolio. Age: 61 years old. Address: 40 Norfolk
Road, Brookline, Massachusetts 02167.
o*J. TOMLINSON FORT. Trustee of the Trust; Partner, Reed, Smith, Shaw &
McClay (law firm). From November 1995 to January 1997, Director, Access
Capital Strategic Community Investment Fund, Inc. - Bank Portfolio.
Age: 68 years old. Address: 204 Woodcock Drive, Pittsburgh,
Pennsylvania 15215.
o+ARTHUR L. GOESCHEL. Trustee of the Trust; Chairman of the Board and
Director, Rexene Corporation; Director, Calgon Carbon Corporation;
Director, Cerex Corporation; Director, National Picture Frame
Corporation; Chairman of the Board and Director, Tetra Corporation 1991-
1993; Director, Medalist Corporation 1992-1993; from November 1995 to
January 1997, Director, Access Capital Strategic Community Investment
Fund, Inc. - Institutional Investment Portfolio. Age: 74 years old.
Address: Way Hollow Road and Woodland Road, Sewickley, Pennsylvania
15143.
o+KENNETH A. HIMMEL. Trustee of the Trust; Director, The Boston Company,
Inc. ("TBC") and Boston Safe Deposit and Trust Company; President and
Chief Executive Officer, Himmel & Co., Inc.; Vice Chairman, Sutton Place
Gourmet, Inc.; Managing Partner, Franklin Federal Partners. From
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Bank Portfolio. Age: 49 years old.
Address: Himmel and Company, Inc., 399 Boylston St., 11th Floor, Boston,
Massachusetts 02116.
o*ARCH S. JEFFERY. Trustee of the Trust; Financial Consultant. From
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 78 years old. Address: 1817 Foxcroft Lane, Unit 306, Allison Park,
Pennsylvania 15101.
o+STEPHEN J. LOCKWOOD. Trustee of the Trust; President and CEO, LDG
Management Company Inc.; CEO, LDG Reinsurance Underwriters, SRRF
Management Inc. and Medical Reinsurance Underwriters Inc.; from November
1995 to January 1997, Director, Access Capital Strategic Community
Investment Fund, Inc. - Institutional Investment Portfolio. Age: 48
years old. Address: 401 Edgewater Place, Wakefield, Massachusetts
01880.
o+JOHN J. SCIULLO. Trustee of the Trust; Dean Emeritus and Professor of Law,
Duquesne University Law School; Director, Urban Redevelopment Authority
of Pittsburgh; from November 1995 to January 1997, Director, Access
Capital Strategic Community Investment Fund, Inc. - Institutional
Investment Portfolio. Member of Advisory Committee on Decendents'
Estate Laws of Pennsylvania. Age: 64 years old. Address: 321 Gross
Street, Pittsburgh, Pennsylvania 15224
o+ROSLYN M. WATSON. Trustee of the Trust; Principal, Watson Ventures;
Director, American Express Centurion Bank; Director, Harvard/Pilgrim
Community Health Plan, Inc.; from November 1995 to January 1997,
Director, Access Capital Strategic Community Investment Fund, Inc. -
Bank Portfolio; Director, Massachusetts Electric Company; Director, The
Hymans Foundation, Inc., prior to February, 1993; Real Estate
Development Project Manager and Vice President, The Gunwyn Company. Age:
46 years old. Address: 25 Braddock Park, Boston, Massachusetts 02116-
5816.
#MARIE E. CONNOLLY. President and Treasurer of the Trust, The Dreyfus/Laurel
Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal Funds (since
September 1994); Vice President of the Trust, The Dreyfus/Laurel Funds,
Inc. and The Dreyfus/Laurel Tax-Free Municipal Funds (March 1994 to
September 1994); President, Funds Distributor, Inc. (since 1992);
Treasurer, Funds Distributor, Inc. (July 1993 to April 1994); COO, Funds
Distributor, Inc. (since April 1994); Director, Funds Distributor, Inc.
(since July 1992); President, COO and Director, Premier Mutual Fund
Services, Inc. (since April 1994); Senior Vice President and Director of
Financial Administration, The Boston Company Advisors, Inc. (December
1988 to May 1993). Age: 37 years old. Address: 60 State Street, Boston,
Massachusetts 02109.
#DOUGLAS C. CONROY, Vice President and Assistant Secretary of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Supervisor of Treasury Services and
Administration of Funds Distributor, Inc. From April 1993 to January
1995, Mr. Conroy was a Senior Fund Accountant for Investors Bank & Trust
Company. From December 1991 to March 1993, Mr. Conroy was employed as a
fund accountant at TBC. Age: 27 years old. Address: 60 State Street,
Boston, Massachusetts 02109.
#RICHARD W. INGRAM, Vice President and Assistant Treasurer of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Senior Vice President and Director of Client
Services and Treasury Operations of Funds Distributor, Inc. From March
1994 to November 1995, Mr. Ingram was Vice President and Division
Manager for First Data Investor Services Group. From 1989 to 1994, Mr.
Ingram was Vice President, Assistant Treasurer and Tax Director - Mutual
Funds of TBC. Age: 40 years old. Address: 60 State Street, Boston,
Massachusetts 02109.
#MARK A. KARPE, Vice President and Assistant Secretary of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since October 1996). Senior Paralegal of Funds Distributor, Inc.
From August 1993 to May 1996, he attended Hofstra University School of
Law. Prior to August 1993, he was employed as an Associate Examiner at
the National Association of Securities Dealers, Inc. Age: 27 years old.
Address: 200 Park Avenue, New York, New York 10166.
#ELIZABETH KEELEY. Vice President and Assistant Secretary of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since January 1996); Counsel, Premier Mutual Fund Services, Inc.
Prior to September 1995, she was enrolled at the Fordham University
School of Law and received her J.D. in May 1995. Prior to September
1992, she was an Assistant at the National Association for Public
Interest Law. Age: 27 years old. Address: 200 Park Avenue, New York,
New York 10166.
#MARY A. NELSON, Vice President and Assistant Treasurer of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Vice President and Manager of Treasury
Services and Administration of Funds Distributor, Inc. From September
1989 to July 1994, Ms. Nelson was an Assistant Vice President and Client
Manager for TBC. Age: 32 years old. Address: 60 State Street, Boston,
Massachusetts 02109.
#JOHN E. PELLETIER. Vice President and Secretary of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since September 1994); Senior Vice President, General Counsel and
Secretary, Funds Distributor, Inc. (since April 1994); Senior Vice
President, General Counsel and Secretary, Premier Mutual Fund Services,
Inc. (since August 1994); Counsel, The Boston Company Advisors, Inc.
(February 1992 to March 1994); Associate, Ropes & Gray (August 1990 to
February 1992). Age: 31 years old. Address: 60 State Street, Boston,
Massachusetts 02109.
#MICHAEL S. PETRUCELLI. Vice President and Treasurer of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since January 1997); Director of Strategic Client Initiatives
for Funds Distributor, Inc. From December, 1989 through November, 1996
he was employed with GE Investment Services where he held various
financial, business development and compliance positions. He also
served as Treasurer of the GE Funds and as Director of the GE Investment
Services. Age: 35 years old. Address: 200 Park Avenue, New York, New
York 10166.
#JOSEPH F. TOWER, III. Vice President and Assistant Treasurer of the Trust,
The Dreyfus/Laurel Fund, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since January 1996); Senior Vice President, Treasurer and Chief
Financial Officer of Premier Mutual Fund Services, Inc. From 1988 to
August 1994, he was employed by TBC where he held various management
positions in the Corporate Finance and Treasury areas. Age: 33 years
old. Address: 60 State Street, Boston, Massachusetts 02109.
____________________________
* "Interested person" of the Company, as defined in the 1940 Act.
o Member of the Audit Committee.
+ Member of the Nominating Committee.
# Officer also serves as an officer for other investment companies advised
by Dreyfus.
The officers and Trustees of the Trust as a group owned beneficially
less than 1% of the total shares of the Fund outstanding as of March 31,
1997.
No officer or employee of the Distributor (or of any parent, subsidiary
or affiliate thereof) receives any compensation from the Trust for serving as
an officer or Trustee of the Trust. In addition, no officer or employee of
Dreyfus (or of any parent, subsidiary or affiliate thereof) serves as an
officer or Trustee of the Trust. The Dreyfus/Laurel Funds pay each
Trustee/Director who is not an "interested person" of the Trust (as defined
in the 1940 Act), $27,000 per annum (and an additional $25,000 for the
Chairman of the Board of Trustees/Directors of the Dreyfus/Laurel Funds). In
addition, the Dreyfus/Laurel Funds pay each Trustee/Director who is not an
"interested person" of the Trust (as defined in the 1940 Act) $1,000 per
joint Dreyfus/Laurel Funds Board meeting attended, plus $750 per joint
Dreyfus/Laurel Funds Audit Committee meeting attended, and reimburse each
Trustee/Director who is not an "interested person" of the Trust (as defined
in the 1940 Act) for travel and out-of-pocket expenses.
For the fiscal year ended December 31, 1996, the aggregate amount of fees
and expenses received by each current Trustee from the Trust and all other
funds in the Dreyfus Family of Funds for which such person is a Board member
were as follows:
Total Compensation
Aggregate From the Trust and
Compensation Fund Complex Paid to
Name of Board Member From the Trust# Board Member****
Ruth Marie Adams $10,833.33 $ 31,500
Francis P. Brennan* 19,098 70,000
James M. Fitzgibbons 10,833.33 31,500
Joseph S. DiMartino** None 517,075***
J. Tomlinson Fort** None None
Arthur L. Goeschel 11,500 32,500
Kenneth A. Himmel 10,250 30,750
Arch S. Jeffery** None None
Stephen J. Lockwood 10,833.33 31,500
John J. Sciullo 11,500 32,500
Roslyn M. Watson 11,166.67 32,500
# Amounts required to be paid by the Trust directly to the non-interested
Trustees, that would be applied to offset a portion of the management fee
payable to Dreyfus, are in fact paid directly by Dreyfus to the non-
interested Trustees. Amount does not include reimbursed expenses for
attending Board meetings, which amounted to $16,473.54 for the Trust.
* Compensation of Francis P. Brennan includes $25,000 paid by the
Dreyfus/Laurel Funds to be the Chairman of the Board. Effective May 1,
1996, the retainer was reduced from $75,000 to $25,000 annually.
** For the fiscal year ended December 31, 1996, Joseph S. DiMartino, J.
Tomlinson Fort and Arch S. Jeffery were paid directly by Dreyfus for serving
as Board members of the Trust and the funds in the Dreyfus/Laurel Funds.
For the fiscal year ended December 31, 1996, the aggregate amount of fees
and expenses received by Joseph S. DiMartino, J. Tomlinson Fort and Arch S.
Jeffery from Dreyfus for serving as a Board member of the Trust were
$11,500, $11,500 and $11,500, respectively, and for serving as a Board
member of all funds in the Dreyfus/Laurel Funds (including the Trust) were
$32,500, $32,500 and $32,500, respectively. In addition, Dreyfus reimbursed
Messrs. DiMartino, Fort and Jeffery a total of $4,895.49 for expenses
attributable to the Trust's Board meetings which is not included in the
$16,473.54 amount noted above.
*** Amount paid to Joseph S. DiMartino from the funds in the Fund Complex for
the year ended December 31, 1996.
****The Dreyfus Family of Funds consists of 152 mutual funds.
MANAGEMENT ARRANGEMENTS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
Management Agreement. Dreyfus serves as the investment manager for the
Fund pursuant to an Investment Management Agreement with the Trust dated
April 4, 1994 (the "Management Agreement"), transferred to Dreyfus as of
October 17, 1994. Pursuant to the Management Agreement, Dreyfus provides, or
arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. As investment manager, Dreyfus manages the Fund by making investment
decisions based on the Fund's investment objectives, policies and
restrictions. The Management Agreement is subject to review and approval at
least annually by the Board of Trustees.
The Management Agreement will continue from year to year provided that a
majority of the Trustees who are not interested persons of the Trust and
either a majority of all Trustees or a majority of the shareholders of the
Fund approve its continuance. The Trustees may terminate the Agreement,
without prior notice to Dreyfus, upon the vote of a majority of the Board of
Trustees or upon the vote of a majority of the outstanding voting securities
of the Fund on 60 days written notice to Dreyfus. Dreyfus may terminate the
Management Agreement upon written notice to the Trustees. The Management
Agreement will terminate immediately and automatically upon its assignment.
The following persons are officers and/or directors of Dreyfus: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E. Canter,
Vice Chairman, Chief Investment Officer and a director; Lawrence S. Kash,
Vice Chairman-Distribution and a director; William T. Sandalls, Jr., Senior
Vice President and Chief Financial Officer; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President-Corporate
Communications; Mary Beth Leibig, Vice President-Human Resources; Jeffrey N.
Nachman, Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice
President-Information Systems; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Burton C. Borgelt and Frank V. Cahouet, directors.
For the last three fiscal years, the Fund has had the following
expenses:
For the Fiscal Year Ended December 31,
1996 1 1995 2 1994
Advisory and/or $4,489,878 $3,796,468 $3,413,996
Management Fee
________________
1. For the fiscal year ended December 31, 1996, the management fee payable by
the Fund amounted to $4,593,348, which amount was reduced by $103,470
pursuant to undertakings then in effect, resulting in a net fee paid to
Dreyfus of $4,489,878 for fiscal 1996.
2. For the fiscal year ended December 31, 1995, the management fee payable by
the Fund amounted to $3,863,417, which amount was reduced by $66,949 pursuant
to undertakings then in effect, resulting in a net fee paid to
Dreyfus of $3,796,468 for fiscal 1995.
Prior to April 4, 1994, The Boston Company Advisors, Inc. served as the
Fund's investment adviser. From April 4, 1994 to October 16, 1994, Mellon
Bank served as the Fund's investment manager. With respect to the 1994
fiscal year fee, $59,679 was waived by the investment manager
PURCHASE OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made at any time. Purchase orders received by 4:00 P.M., New York
time, on any business day that Dreyfus Transfer, Inc., the Fund's Transfer
and dividend disbursing agent (the "Transfer Agent"), and the New York Stock
Exchange ("NYSE") are open for business will be credited to the shareholder's
Fund account on the next bank business day following such purchase order.
Purchase orders made after 4:00 P.M., New York time, on any business day the
Transfer Agent and the NYSE are open for business, or orders made on
Saturday, Sunday or any Fund holiday (e.g., when the NYSE is not open for
business), will be credited to the shareholder's Fund account on the second
bank business day following such purchase order.
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
In-Kind Purchases. If the following conditions are satisfied, the Fund
may at its discretion, permit the purchase of shares through an "in-kind"
exchange of securities. Any securities exchanged must meet the investment
objectives, policies and limitations of the Fund, must have a readily
ascertainable market value, must be liquid and must not be subject to
restrictions on resale. The market value of any securities exchanged, plus
any cash, must be at least equal to $25,000. Shares purchased in exchange
for securities generally cannot be redeemed for fifteen days following the
exchange in order to allow time for the transfer to settle.
The basis for the exchange will depend upon the relative net asset value
("NAV") of the shares purchased and securities exchanged. Securities
accepted by the Fund will be valued in the same manner as the Fund values its
assets. Any interest earned on the securities following their delivery to
the Fund and prior to the exchange will be considered in valuing the
securities. All interest, dividends, subscription or other rights attached
to the securities become the property of the Fund, along with the securities.
For further information about "in-kind" purchases, call 1-800-645-6561.
DISTRIBUTION PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plan."
Distribution Plan - Investor and Institutional Shares. The Securities
and Exchange Commission ("SEC") has adopted Rule 12b-1 under the 1940 Act
("Rule") regulating the circumstances under which investment companies such
as the Trust may, directly or indirectly, bear the expenses of distributing
their shares. The Rule defines distribution expenses to include expenditures
for "any activity which is primarily intended to result in the sale of fund
shares." The Rule, among other things, provides that an investment company
may bear such expenses only pursuant to a plan adopted in accordance with the
Rule.
With respect to the Investor and Institutional shares of the Fund, the
Trust has adopted a Distribution Plan ("Plan"), pursuant to which the
Distributor may enter into agreements with Agents pursuant to that Class
Plan. Under the Plan, the Fund may spend annually up to 0.25% of the average
of the net asset values attributable to the Investor shares, and up to 0.15%
of the average of its net asset values attributable to the Institutional
shares, for costs and expenses incurred in connection with the distribution
of, and shareholder servicing with respect to, shares of those respective
Classes.
The Plan provides that a report of the amounts expended under the Plan,
and the purposes for which such expenditures were incurred, must be made to
the Trustees for their review at least quarterly. In addition, the Plan
provides that it may not be amended to increase materially the costs which
the Fund may bear for distribution pursuant to the Plan without approval of
the Fund's shareholders, and that other material amendments of the Plan must
be approved by the vote of a majority of the Trustees and of the Trustees who
are not "interested persons" of the Trust (as defined in the 1940 Act) and
who do not have any direct or indirect financial interest in the operation of
the Plan, cast in person at a meeting called for the purpose of considering
such amendments. The Plan is subject to annual approval by the entire Board
of Trustees and by the Trustees who are neither interested persons nor have
any direct or indirect financial interest in the operation of the Plan, by
vote cast in person at a meeting called for the purpose of voting on the
Plan. The Plan was so approved at a meeting of the Board of Trustees held on
January 31, 1997. The Plan is terminable, as to the Fund's Class of shares,
at any time by vote of a majority of the Trustees who are not interested
persons and have no direct or indirect financial interest in the operation of
the Plan or by vote of the holders of a majority of the outstanding shares of
such class of the Fund.
For the fiscal year ended December 31, 1996, the Fund paid $1,105,214,
$32,437 of which was paid to the Distributor and $1,072,777 of which was paid
to Dreyfus Service Corporation attributable to its Investor shares and
$98,736, of which $15,063 was paid to the Distributor and $83,673 of which
was paid to Dreyfus Service Corporation attributable to its Institutional
shares, pursuant to the Plan.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Fund
Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Agent, and reasonably
believed by the Transfer Agent to be genuine. Ordinarily, the Fund will
initiate payment for shares redeemed pursuant to this Privilege on the next
business day after receipt if the Transfer Agent receives the redemption
request in proper form. Redemption proceeds will be transferred by Federal
Reserve wire only to the commercial bank account specified by the investor on
the Account Application or Shareholder Services Form. Redemption proceeds,
if wired, must be in the amount of $1,000 or more and will be wired to the
investor's account at the bank of record designated in the investor's file at
the Transfer Agent, if the investor's bank is a member of the Federal Reserve
System, or to a correspondent bank if the investor's bank is not a member.
Fees ordinarily are imposed by such bank and usually are borne by the
investor. Immediate notification by the correspondent bank to the investor's
bank is necessary to avoid a delay in crediting the funds to the investor's
bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-
7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each shareholder, including each holder
of a joint account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also 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 NYSE Medallion Signature
Program, the Securities Transfer Agents Medallion Program ("STAMP") and the
Stock Exchanges Medallion Program. Guarantees must be signed by an
authorized signatory of the guarantor and "Signature-Guaranteed" must appear
with the signature. The Transfer Agent may request additional documentation
from corporations, executors, administrators, trustees or guardians, and may
accept other suitable verification arrangements from foreign investors, such
as consular verification. For more information with respect to signature-
guarantees, please call one of the telephone numbers listed on the cover.
Dreyfus TeleTransfer Privilege. Investors should be aware that if they
have selected the Dreyfus TeleTransfer Privilege, any request for a wire
redemption will be effected as a TeleTransfer transaction through the ACH
system unless more prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Fund Shares--Dreyfus TeleTransfer Privilege."
Redemption Commitment. The Fund has committed itself to pay in cash all
redemption requests by any shareholder of record of the Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value
of the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the SEC. In the case of requests
for redemptions in excess of such amount, the Board of Trustees reserves the
right to make payments in whole or in part in securities or other assets in
case of an emergency or any time a cash distribution would impair the
liquidity of the Fund to the detriment of the existing shareholders. In this
event, the securities would be valued in the same manner as the Fund's
portfolio is valued. If the recipient sold such securities, brokerage
charges might be incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the NYSE is closed
(other than customary weekend and holiday closings), (b) when trading in the
markets the Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the SEC so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the SEC by order may permit to protect the Fund's
shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Fund Exchanges. Investor, Institutional and Class R shares of the Fund
may be exchanged for shares of certain other funds managed or administered by
Dreyfus. Shareholders are limited to six exchanges out of the Fund during
the calendar year. Shares of such funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged without a
sales load for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds acquired
by a previous exchange from shares purchased with a sales
load and additional shares acquired through reinvestment of
dividends or other distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load applicable to
the Offered Shares exceeds the maximum sales load that could have
been imposed in connection with the Purchased Shares (at the time
the Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To request an exchange, an investor, or an investor's Agent acting on
the investor's behalf, must give exchange instructions to the Transfer Agent
in writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this Privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer Agent
to act on telephonic instructions (including over The Dreyfus Touchr
Automated Telephone System) from any person representing himself or herself
to be the investor, or a representative of the investor's Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone exchanges
may be subject to limitations as to the amount involved or the number of
telephone exchanges permitted. Shares issued in certificate form are not
eligible for telephone exchange.
Exchanges of Class R shares held by a Retirement Plan may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. For Dreyfus-
sponsored Keogh Plans, IRAs and SEP-IRAs with only one participant, the
minimum initial investment is $750. To exchange shares held in Corporate
Plans, 403(b)(7) Plans and IRAs set up under a Simplified Employee Pension
Plan ("SEP-IRAs") with more than one participant, the minimum initial
investment is $100 if the plan has at least $2,500 invested among the funds
in the Dreyfus Family of Funds. To exchange shares held in a personal
retirement plan account, the shares exchanged must have a current value of at
least $100.
Dreyfus Auto-Exchange Privilege. The Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for Investor, Institutional and
Class R shares of the Fund, shares of certain other eligible funds in the
Dreyfus Family of Funds. This Privilege is available only for existing
accounts. With respect to Class R shares held by a Retirement Plan,
exchanges may be made only between the investor's Retirement Plan account in
one fund and such investor's Retirement Plan account in another fund. Shares
will be exchanged on the basis of relative net asset value as described above
under " Fund Exchanges." Enrollment in or modification or cancellation of
this Privilege is effective three business days following notification by the
investor. An investor will be notified if the investor's account falls below
the amount designated to be exchanged under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are made
in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible
for this Privilege. Exchanges of IRA shares may be made between IRA accounts
and from regular accounts to IRA accounts, but not from IRA accounts to
regular accounts. With respect to all other retirement accounts, exchanges
may be made only among those accounts.
Fund Exchanges and Dreyfus Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being acquired
may legally be sold. Shares may be exchanged only between accounts having
identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchange service or
Dreyfus Auto-Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the yield
on the shares. If withdrawal payments exceed reinvested dividends and distri
butions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be established by completing the
appropriate application available from the Distributor. Automatic Withdrawal
may be terminated at any time by the investor, the Fund or the Transfer
Agent. Shares for which certificates have been issued may not be redeemed
through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest automatically their dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of certain other eligible
funds in the Dreyfus Family of Funds of which the investor is a shareholder.
Shares of such other funds purchased pursuant to this Privilege will be
purchased on the basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not
charge a sales load may be invested in shares of other funds sold
with a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a
sales load may be invested in shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided that,
if the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any reduced
loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in shares
of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
Corporate Pension/Profit-Sharing and Retirement Plans. The Fund makes
available to corporations a variety of prototype pension and profit-sharing
plans including a 401(k) Salary Reduction Plan. In addition, the Fund makes
available Keogh Plans, IRAs, including SEP-IRAs and IRA "Rollover Accounts,"
and 403(b)(7) Plans. Plan support services also are available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including an SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans may
not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, is $2,500
with no minimum on subsequent purchases. The minimum initial investment for
Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only
one participant, is normally $750, with no minimum on subsequent purchases.
Individuals who open an IRA may also open a non-working spousal IRA with a
minimum investment of $250.
The investor should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details on eligibility,
service fees and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or which are not valued by a
pricing service approved by the Board of Trustees, are valued at fair value
as determined in good faith by the Board of Trustees. The Board of Trustees
will review the method of valuation on a current basis. In making their good
faith valuation of restricted securities, the Trustees generally will take
the following factors into consideration: restricted securities which are
securities of the same class of securities for which a public market exists
usually will be valued at market value less the same percentage discount at
which purchased. This discount will be revised periodically by the Board of
Trustees if the Trustees believe that it no longer reflects the value of the
restricted securities. Restricted securities not of the same class as
securities for which a public market exists usually will be valued initially
at cost. Any subsequent adjustment from cost will be based upon
considerations deemed relevant by the Board of Trustees.
New York Stock Exchange Closings. The holidays (as observed) on which
the NYSE is closed currently are: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Other
Distributions and Taxes."
The term "regulated investment company" does not imply the supervision
of management or investment practices or policies by any government agency.
To qualify for treatment as a regulated investment company ("RIC") under
the Internal Revenue Code of 1986, as amended (the "Code"), the Fund -- which
is treated as a separate corporation for federal tax purposes-- (1) must
distribute to its shareholders each taxable year at least 90% of its invest
ment company taxable income (generally consisting of net investment income,
net short-term capital gains and net gains from certain foreign currency
transactions), ("Distribution Requirement") (2) must derive at least 90% of
its annual gross income from specified sources ("Income Requirement"), (3)
must derive less than 30% of its annual gross income from the sale or
disposition of any of the following that are held for less than three months
- -- (i) securities, (ii) non-foreign-currency options and futures and
(iii) foreign currencies (or foreign currency options, futures and forward
contracts) that are not directly related to the Fund's principal business of
investing in securities (or options and futures with respect thereto) ("Short-
Short Limitation") -- and (4) must meet certain asset diversification and
other requirements.
Any dividend or other distribution paid shortly after an investor's
purchase of shares may have the effect of reducing the net asset value of the
shares below the cost of his or her investment. Such a dividend or other
distribution would be a return on investment in an economic sense, although
taxable as stated in the Fund's Prospectus. In addition, if a shareholder
sells shares of the Fund held for six months or less and receives a capital
gain distribution with respect to those shares, any loss incurred on the sale
of those shares will be treated as a long-term capital loss to the extent of
the capital gain distribution received.
Dividends and other distributions declared by the Fund in October,
November or December of any year and payable to shareholders of record on a
date in any of those months are deemed to have been paid by the Fund and
received by the shareholders on December 31 of that year if the distributions
are paid by the Fund during the following January. Accordingly, those
distributions will be taxed to shareholders for the year in which that
December 31 falls.
A portion of the dividends paid by the Fund, whether received in cash or
reinvested in additional Fund shares, may be eligible for the dividends-
received deduction allowed to corporations. The eligible portion may not
exceed the aggregate dividends received by the Fund from U.S. corporations.
However, dividends received by a corporate shareholder and deducted by it
pursuant to the dividends-received deduction are subject indirectly to the
alternative minimum tax.
Foreign Taxes. Dividends and interest received by the Fund may be
subject to income, withholding or other taxes imposed by foreign countries
and U.S. possessions that would reduce the yield on its securities. Tax
conventions between certain countries and the United States may reduce or
eliminate these foreign taxes, however, and many foreign countries do not
impose taxes on capital gains in respect of investments by foreign investors.
If more than 50% of the value of the Fund's total assets at the close of its
taxable year consists of securities of foreign corporations, it will be
eligible to, and may, file an election ("Election") with the Internal Revenue
Service that will enable its shareholders, in effect, to receive the benefit
of the foreign tax credit with respect to any foreign or U.S. possessions'
income taxes paid by it. Pursuant to the Election, the Fund would treat
those taxes as dividends paid to its shareholders and each shareholder would
be required to (1) include in gross income, and treat as paid by him or her,
his or her proportionate share of those taxes, (2) treat his or her share of
those taxes and of any dividend paid by the Fund that represents income from
foreign or U.S. possession sources as his or her own income from those
sources and (3) either deduct the taxes deemed paid by him or her in
computing his or her taxable income or, alternatively, use the foregoing
information in calculating the foreign tax credit against his or her federal
income tax. No deduction for foreign taxes may be claimed by a shareholder
who does not itemize deductions. Generally, a credit for foreign taxes may
not exceed the shareholder's federal income tax attributable to his total
foreign source taxable income. The Fund will report to its shareholders
shortly after each taxable year their respective shares of the income from
sources within, and taxes paid to, foreign countries and U.S. possessions if
it makes the Election.
Dividends and interest received by the Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between cer
tain countries and the United States may reduce or eliminate these foreign
taxes, however, and many foreign countries do not impose taxes on capital
gains in respect of investments by foreign investors.
Foreign Currency, Futures, Forward and Hedging Transactions. Gains from
the sale or other disposition of foreign currencies (except certain gains
therefrom that may be excluded by future regulations), and gains from
options, futures and forward contracts derived by the Fund with respect to
its business of investing in securities or foreign currencies, will qualify
as permissible income under the Income Requirement. However, income from the
disposition of options and futures contracts (other than those on foreign
currencies) will be subject to the Short-Short Limitation if they are held
for less than three months. Income from the disposition of foreign
currencies, and options, futures and forward contracts thereon, that are not
directly related to the Fund's principal business of investing in securities
(or options and futures with respect to securities) also will be subject to
the Short-Short Limitation if they are held for less than three months.
If the Fund satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease
in value (whether realized or not) of the offsetting hedging position during
the period of the hedge for purposes of determining whether the Fund
satisfies the Short-Short Limitation. Thus, only the net gain (if any) from
the designated hedge will be included in gross income for purposes of that
limitation. The Fund will consider whether it should seek to qualify for
this treatment for its hedging transactions. To the extent the Fund does not
so qualify, it may be forced to defer the closing out of certain options,
futures, forward contracts and foreign currency positions beyond the time
when it otherwise would be advantageous to do so, in order for the Fund to
continue to qualify as a RIC.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain and loss. However, a portion of the gains or
losses from the disposition of foreign currencies and certain foreign-
currency-denominated instruments (including debt instruments and financial
forward, futures and option contracts) may be treated as ordinary income or
loss under Section 988 of the Code. In addition, all or a portion of any
gain realized from the sale or other disposition of certain market discount
bonds will be treated as ordinary income. Moreover, all or a portion of the
gain realized from engaging in "conversion transactions" that otherwise would
be treated as capital gain may be treated as ordinary income under Section
1258 of the Code. "Conversion transactions" are defined to include certain
straddle transactions, transactions marketed or sold as producing capital
gains, and other transactions described in Treasury regulations to be issued
in the future.
Under Section 1256 of the Code, any gain or loss realized by the Fund
from certain futures, forward contracts and options transactions will be
treated as 60% long-term capital gain or loss and 40% short-term capital gain
or loss. Gain or loss will arise upon exercise or lapse of such contracts
and options as well as from closing transactions. In addition, any such
contracts or options remaining unexercised at the end of the Fund's taxable
year will be treated as sold for their then fair market value (a process
known as "marking-to-market"), resulting in additional gain or loss to the
Fund characterized in the manner described above.
Offsetting positions held by the Fund involving certain contracts or
options may constitute "straddles", which are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
straddles is governed by Sections 1092 and to the extent noted above, 1258 of
the Code, which in certain circumstances override or modify Sections 1256 and
988. As a result, all or a portion of any capital gain from certain straddle
transactions may be recharacterized as ordinary income. If the Fund were
treated as entering into straddles by reason of its engaging in certain
forward contracts or options transactions, such straddles would be
characterized as "mixed straddles" if the forward contracts or options
transactions comprising a part of such straddles were governed by Section
1256. The Fund may make one or more elections with respect to mixed
straddles; depending on which election is made, if any, the results to the
Fund may differ. If no election is made, then to the extent the straddle and
conversion transactions rules apply to positions established by the Fund,
losses realized by the Fund will be deferred to the extent of unrealized gain
in the offsetting position. Moreover, as a result of the straddle rules,
short-term capital loss on straddle positions may be recharacterized as
long-term capital loss, and long-term capital gains may be treated as
short-term capital gains or ordinary income.
Investment by the Fund in securities issued or acquired at a discount
(for example, zero coupon securities) could, under special tax rules, affect
the amount and timing of distributions to shareholders by causing the Fund to
recognize income prior to the receipt of cash payments. For example, the
Fund could be required to take into gross income annually a portion of the
discount (or deemed discount) at which the securities were issued and could
need to distribute such income to satisfy the Distribution Requirement and to
avoid the excise tax (the "Excise Tax"). In such case, the Fund may have to
dispose of securities it might otherwise have continued to hold in order to
generate cash to satisfy these requirements.
Passive Foreign Investment Companies. The Fund may invest in the stock
of "passive foreign investment companies" ("PFICs"). A PFIC is a foreign
corporation that, in general, meets either of the following tests: (1) at
least 75% of its gross income is passive or (2) an average of at least 50% of
its assets produce, or are held for the production of, passive income. Under
certain circumstances, the Fund will be subject to federal income tax on a
portion of any "excess distribution" received on the stock of a PFIC or of
any gain on disposition of the stock (collectively "PFIC Income"), plus
interest thereon, even if the Fund distributes the PFIC income as a taxable
dividend to its shareholders. The balance of the PFIC income will be
included in the Fund's investment company taxable income and, accordingly,
will not be taxable to it to the extent that income is distributed to its
shareholders. If the Fund invests in a PFIC and elects to treat the PFIC as
"qualified electing fund," then in lieu of the foregoing tax and interest
obligation, the Fund would be required to include in income each year its pro
rata share of the qualified electing fund's annual ordinary earnings and net
capital gain (the excess of net long-term capital gain over net short-term
capital loss) -- which probably would have to be distributed to satisfy the
Distribution Requirement and avoid imposition of the 4% excise tax referred
in the Fund's Prospectus under "Dividends, Other Distributions and Taxes" --
even if those earnings and gain were not received by the Fund. In most
instances it will be very difficult, if not impossible, to make this election
because of certain requirements thereof.
Pursuant to proposed regulations open-end RICs, such as the Fund, would
be entitled to elect to "mark-to-market" their stock in certain PFICs.
"Marking-to-market," in this context, means recognizing as gain for each
taxable year the excess, as of the end of that year, of the fair market value
of each such PFIC's stock over the adjusted basis in that stock (including
mark-to-market gain for each prior year for which an election was in effect).
State and Local Taxes. Depending upon the extent of the Fund's
activities in states and localities in which it is deemed to be conducting
business, the Fund may be subject to the tax laws thereof. Shareholders are
also advised to consult their tax advisers concerning the application of
state and local taxes to them.
Foreign Shareholders - U.S. Federal Income Taxation. U.S. federal income
taxation of a shareholder who, as to the United States, is a non-resident
alien individual, a foreign trust or estate, a foreign corporation or a
foreign partnership (a "foreign shareholder") depends on whether the income
from the Fund is "effectively connected" with a U.S. trade or business
carried on by the shareholder, as discussed generally below. Special U.S.
federal income tax rules that differ from those described below may apply to
certain foreign persons who invest in the Fund, such as a foreign shareholder
entitled to claim the benefits of an applicable tax treaty. Foreign
shareholders are advised to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in the Fund.
Foreign Shareholders - Income Not Effectively Connected. Dividends
distributed to a foreign shareholder whose ownership of Fund shares is not
effectively connected with a U.S. trade or business carried on by the foreign
shareholder generally will be subject to U.S. federal withholding tax of 30%
(or lower treaty rate). Capital gains realized by foreign shareholders on
the sale of Fund shares and distributions to them of net capital gain
generally will not be subject to U.S. federal income tax unless the foreign
shareholder is a non-resident alien individual and is physically present in
the United States for more than 182 days during the taxable year. In the
case of certain foreign shareholders, the Fund may be required to withhold
U.S. federal income tax at a rate of 31% of capital gain distributions and of
the gross proceeds from a redemption of Fund shares unless the shareholder
furnishes the Fund with a certificate regarding the shareholder's foreign
status.
Foreign Shareholders - Effectively Connected Income. If a foreign
shareholder's ownership of Fund shares is effectively connected with a U.S.
trade or business carried on by the foreign shareholder, then all
distributions to that shareholder and any gains realized by that shareholder
on the disposition of the Fund shares will be subject to U.S. federal income
tax at the graduated rates applicable to U.S. citizens and domestic
corporations, as the case may be. Foreign shareholders also may be subject to
the branch profits tax.
Foreign Shareholders - Estate Tax. Foreign individuals generally are
subject to federal estate tax on their U.S. situs property, such as shares of
the Fund, that they own at the time of their death. Certain credits against
that tax and relief under applicable tax treaties may be available.
PORTFOLIO TRANSACTIONS
All portfolio transactions of the Fund are placed on behalf of the Fund
by Dreyfus. Debt securities purchased and sold by the Fund are generally
traded on a net basis (i.e., without commission) through dealers acting for
their own account and not as brokers, or otherwise involve transactions
directly with the issuer of the instrument. This means that a dealer (the
securities firm or bank dealing with the Fund) makes a market for securities
by offering to buy at one price and sell at a slightly higher price. The
difference between the prices is known as a spread. Other portfolio
transactions may be executed through brokers acting as agent. The Fund will
pay a spread or commissions in connection with such transactions. Dreyfus
uses its best efforts to obtain execution of portfolio transactions at prices
which are advantageous to the Fund and at spreads and commission rates, if
any, which are reasonable in relation to the benefits received. Dreyfus also
places transactions for other accounts that it provides with investment
advice.
Brokers and dealers involved in the execution of portfolio transactions
on behalf of the Fund are selected on the basis of their professional
capability and the value and quality of their services. In selecting brokers
or dealers, Dreyfus will consider various relevant factors, including, but
not limited to, the size and type of the transaction; the nature and
character of the markets for the security to be purchased or sold; the
execution efficiency, settlement capability, and financial condition of the
broker-dealer; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any spreads (or commissions, if
any). Any spread, commission, fee or other remuneration paid to an affiliated
broker-dealer is paid pursuant to the Trust's procedures adopted in
accordance with Rule 17e-1 of the 1940 Act.
Brokers or dealers may be selected who provide brokerage and/or research
services to the Fund and/or other accounts over which Dreyfus or its
affiliates exercise investment discretion. Such services may include advice
concerning the value of securities; the advisability of investing in,
purchasing or selling securities; the availability of securities or the
purchasers or sellers of securities; furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance
and settlement).
The receipt of research services from broker-dealers may be useful to
Dreyfus in rendering investment management services to the Fund and/or its
other clients; and, conversely, such information provided by brokers or
dealers who have executed transaction orders on behalf of other clients of
Dreyfus may be useful to these organizations in carrying out their obligation
to the Fund. The receipt of such research services does not reduce these
organizations' normal independent research activities; however, it enables
these organizations to avoid the additional expenses which might otherwise be
incurred if these organizations were to attempt to develop comparable
information through their own staffs.
The Trust's Board of Trustees periodically reviews Dreyfus' performance
of its responsibilities in connection with the placement of portfolio
transactions on behalf of the Fund and reviews the prices paid by the Fund
over representative periods of time to determine if they are reasonable in
relation to the benefits to the Fund.
Although Dreyfus manages other accounts in addition to the Fund,
investment decisions for the Fund are made independently from decisions made
for these other accounts. It sometimes happens that the same security is held
by more than one of the accounts managed by Dreyfus. Simultaneous
transactions may occur when several accounts are managed by the same
investment manager, particularly when the same investment instrument is
suitable for the investment objective of more than one account.
When more than one account is simultaneously engaged in the purchase or
sale of the same investment instrument, the prices and amounts are allocated
in accordance with a formula considered by Dreyfus to be equitable to each
account. In some cases this system could have a detrimental effect on the
price or volume of the investment instrument as far as the Fund is concerned.
In other cases, however, the ability of the Fund to participate in volume
transactions will produce better executions for the Fund. While the Trustees
will continue to review simultaneous transactions, it is their present
opinion that the desirability of retaining Dreyfus as investment manager to
the Fund outweighs any disadvantages that may be said to exist from exposure
to simultaneous transactions.
Total brokerage commissions paid for the fiscal years ended December 31,
1996, 1995 and 1994 were $1,391,532, $331,739 and $1,025,551, respectively.
The brokerage concession on transactions for the fiscal year ending December
31, 1995 were $20,100.
Portfolio Turnover. While the Fund does not intend to trade in
securities for short-term profits, the Fund will not consider portfolio
turnover rate a limiting factor in making investment decisions. While it is
not possible to predict the rate of frequency of portfolio transactions
(i.e., portfolio turnover rate) with any certainty, at the present time it is
anticipated that the portfolio turnover rate for the Fund will generally not
exceed 100%. Higher portfolio turnover rates can result in corresponding
increases in brokerage commissions. In addition, to the extent the Fund
realizes short-term gains as a result of more portfolio transactions, such
gains would be taxable to shareholders at ordinary income tax rates.
The portfolio turnover rates for the fiscal years ended December 31,
1996 and 1995 for the Fund were 88.46% and 54.42%, respectively.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance Information."
Average annual total return (expressed as a percentage) for the Investor
shares of the Fund for each of the periods noted was:
Average Annual Total Return for the Periods Ended December 31, 1996
1 Year 5 Years 10 Years Inception
Investor Shares 21.44% 14.89% 12.30% 10.95%
(2/6/47)
Inception date appears in parentheses following the average annual total
return since inception.
Average annual total return (expressed as a percentage) for the
Institutional shares of the Fund for each of the periods noted was:
Average Annual Total Return for the Periods Ended December 31, 1996
1 Year 5 Years 10 Years Inception
Institutional Shares 21.57% -- -- 17.73%
(2/1/93)
Inception date appears in parentheses following the average annual total
return since inception.
Average annual total return (expressed as a percentage) for the Class R
shares of the Fund for each of the periods noted was:
Average Annual Total Return for the Periods Ended December 31, 1996
1 Year 5 Years 10 Years Inception
Class R Shares 21.74% -- -- 22.09%
(8/4/94)
Inception date appears in parentheses following the average annual total
return since inception.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and other distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number of
years in the period) and subtracting 1 from the result.
The Fund's total return for the Investor shares, Class R shares and
Institutional shares for the periods February 6, 1947, August 4, 1994 and
February 1, 1993 to December 31, 1996 were 17747.08%, 61.81% and 89.48%,
respectively. Total return is calculated by subtracting the amount of the
Fund's net asset value per share at the beginning of a stated period from the
net asset value per share at the end of the period (after giving effect to
the reinvestment of dividends and other distributions during the period), and
dividing the result by the net asset value per share at the beginning of the
period.
The Fund may compare the performance of its Investor shares, Class R
shares and Institutional Shares to that of other mutual funds, relevant
indices or rankings prepared by independent services or other financial or
industry publications that monitor mutual fund performance.
Performance rankings as reported in Changing Times, Business Week,
Institutional Investor, The Wall Street Journal, Mutual Fund Forecaster, No
Load Investor, Money Magazine, Morningstar Mutual Fund Values, U.S. News and
World Report, Forbes, Fortune, Barron's, Financial Planning, Financial
Planning on Wall Street, Certified Financial Planner Today, Investment
Advisor, Kiplinger's, Smart Money and similar publications may also be used
in comparing the Fund's performance. Furthermore, the Fund may quote its
Investor, Class R and Institutional Class yields in advertisements or in
shareholder reports.
From time to time, advertising material for the Fund may including
biographical information relating to its portfolio manager and may refer to,
or include commentary by the portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share, when issued and paid for in accordance with the terms
of the offering, is fully paid. Fund shares are without par value, have no
preemptive or subscription rights and are freely transferable.
The Fund will send annual and semi-annual financial statements to all of
its shareholders.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Trust; and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Trust or a Trustee. The Agreement and Declaration of
Trust provides for indemnification from Fund property for all losses and
expenses of any shareholder held personally liable for the obligations of the
Fund. Thus, the risk of a shareholder's incurring financial loss on account
of shareholder liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations, a possibility which Dreyfus
believes is remote. Upon payment of any liability incurred by the Fund, the
shareholder of the Fund will be entitled to reimbursements from the general
assets of the Fund. The Trustees intend to conduct the operations of the
Fund in such a way so as to avoid, as far as possible, ultimate liability of
the shareholders for liabilities of the Fund.
The Fund is currently one of three portfolios authorized by the Trust's
Board of Trustees.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
Mellon Bank, One Mellon Bank Center, Pittsburgh, PA 15258, is the Fund's
custodian. Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, is
located at One American Express Plaza, Providence, Rhode Island 02903, and is
the Fund's transfer and dividend disbursing agent. Under a transfer agency
agreement with the Fund, the Transfer Agent arranges for the maintenance of
shareholder account records for the Fund, the handling of certain
communication between shareholders and the Fund and the payment of dividends
and distributions payable by the Fund. For these services, the Transfer
Agent receives a monthly fee computed on the basis of the number of
shareholder accounts it maintains for the Fund during the month, and is
reimbursed for certain out-of-pocket expenses. Dreyfus Transfer, Inc. and
Mellon Bank as custodian, have no part in determining the investment policies
of the Fund or which securities are to be purchased or sold by the Fund.
Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W., Second
Floor, Washington, D.C. 20036, has passed upon the legality of the shares
offered by the Prospectus and this Statement of Additional Information.
KPMG Peat Marwick LLP, was appointed by the Trustees to serve as the
Fund's independent auditors for the year ending December 31, 1997, providing
audit services including (1) examination of the annual financial statements,
(2) assistance, review and consultation in connection with the SEC and (3)
review of the annual federal income tax return filed on behalf of the Fund.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended December 31, 1996,
including notes to the financial statements and supplementary information and
the Independent Auditors' Report, are included in the Annual Report to
shareholders. A copy of the Annual Report accompanies this Statement of
Additional Information. The financial statements included in the Annual
Report, and the Independent Auditors' Report thereon, are incorporated herein
by reference.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments December 31, 1996
<TABLE>
<CAPTION>
Common Stocks--96.6% Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Aerospace & Military Technology--.0% C.S.F. (Thompson)........................ 8,805 $000,285,526
------------
Appliances--1.5% Hitachi Koki............................. 40,000 286,480
Philips Electronics NV, ADR.............. 196,500 7,860,000
Tarkett.................................. 10,000 199,221
Sony..................................... 5,000 327,862
------------
8,673,563
------------
Automobiles--.3% Bayerische Motoren Werke................. 540 376,003
Fiat Spa................................. 45,000 135,504
Honda Motor.............................. 12,000 343,153
Toyota Motor............................. 20,000 575,378
Volvo.................................... 10,000 217,500
------------
1,647,538
------------
Banking--1.0% ABN-Amro................................. 5,051 328,454
Abbey National........................... 26,000 340,616
Affin Holdings Berhad.................... 103,000 283,449
Australia & New Zealand Banking.......... 30,000(a) 189,130
Banco BHIF, ADR.......................... 5,500 90,063
Banco Comercial Portugues................ 7,000 158,170
Banco Comercial Portugues, ADR........... 3,000 39,375
Bangkok Bank Public...................... 7,000 67,680
CLF-DEXIA France......................... 3,000 261,272
Christiania Bank......................... 65,000 206,058
Commonwealth Bank of Australia,
Instalment Receipt..................... 29,400 183,010
Corporacion Bancaria de Espana, ADR...... 20,000 450,000
Creditanstalt-Bankverein................. 1,200 155,268
Dah Sing Financial....................... 10,600 43,033
Deutsche Bank............................ 10,000 466,580
Development Bank of Singapore............ 27,000 364,500
Espirito Santo Financial, ADR............ 5,000 66,250
HSBC..................................... 11,396 243,847
Istituto Mobiliare Italiano, ADR......... 10,400 269,100
Kookmin Bank, ADR........................ 3,400(a,b) 63,512
National Westminster Bank................ 55,736 654,773
PT Bank Bali............................. 35,000 87,426
Philippine National Bank................. 4,500(a) 53,470
Schweizerischer Banksverein.............. 2,400 455,311
Societe Generale......................... 3,881 419,507
------------
5,939,854
------------
Basic Industries--5.9% Alumax................................... 64,800(a) 2,162,700
Bethlehem Steel.......................... 156,000(a) 1,404,000
BetzDearborn............................. 63,900 3,738,150
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Basic Industries (continued) Great Lakes Chemical..................... 50,000 $ 2,337,500
IMC Global............................... 68,400 2,676,150
James River.............................. 233,500 7,734,688
Louisiana Pacific........................ 93,000 1,964,625
Mallinckrodt............................. 57,300 2,528,362
Reynolds Metals.......................... 80,500 4,538,188
Tenneco.................................. 100,000 4,512,500
------------
33,596,863
------------
Beverages & Tobacco--.1% Imperial Tobacco, ADR.................... 6,250 79,688
Mikuni Coca Cola......................... 27,000 349,892
------------
429,580
------------
Broadcasting & Publishing--.0% Marieberg Tidnings....................... 10,000 244,152
------------
Building Materials--.1% Barlow................................... 3,000 26,608
Barlow, ADR.............................. 6,000 52,875
Boral.................................... 130,679 371,926
Cimpor-Cimentos de Portugal.............. 2,200 47,332
Sekisui Chemical......................... 14,000 141,512
------------
640,253
------------
Capital Goods--5.1% Blue Square Chain Stores................. 8,000(a) 62,716
Controladora Comercial Mexicana, ADR..... 3,600 64,350
Ingersoll-Rand........................... 49,000 2,180,500
Litton Industries........................ 52,500(a) 2,500,313
Lockheed Martin.......................... 66,400 6,075,600
Newport News Shipbuilding................ 20,000 300,000
Nokia, ADR............................... 180,900 10,424,362
Raytheon................................. 154,600 7,440,125
------------
29,047,966
------------
Chemicals--.7% AKZO Nobel NV, ADR....................... 2,700 182,250
Bayer.................................... 10,000 407,528
Imperial Chemical Industries, ADR........ 50,500 2,626,000
Jilin Chemical Industrial, ADR........... 2,100 30,712
Polifin.................................. 25,000 41,676
Reliance Industries, ADR................. 4,000(b) 48,000
Rhone-Poulenc, ADR....................... 9,327 315,952
Sasol.................................... 4,000 47,446
Srithai Superware........................ 12,000 71,470
------------
3,771,034
------------
Construction/Housing--.2% Chudenko................................. 6,450 186,117
Hollandsche Beton Groep.................. 1,500 310,587
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Construction/Housing (continued) Nishimatsu Construction.................. 40,000 $ 349,028
Sekisui House............................ 40,000 407,775
------------
1,253,507
------------
Consumer Durables--1.3% Cooper Tire & Rubber..................... 187,100 3,695,225
Maytag................................... 181,500 3,584,625
Perusahaan Otomobil Nasional Berhad...... 9,400 59,553
------------
7,339,403
------------
Consumer Non-durables--10.9% Archer-Daniels-Midland................... 300,000 6,600,000
Fruit of the Loom, Cl. A................. 111,200(a) 4,211,700
Harcourt General......................... 82,400 3,800,700
Hasbro................................... 124,400 4,836,050
Kimberly Clark........................... 48,200 4,591,050
Loews.................................... 45,200 4,260,100
McGraw Hill Cos.......................... 137,800 6,356,025
Philip Morris Cos........................ 64,400 7,253,050
Polaroid................................. 190,000 8,265,000
RJR Nabisco Holdings..................... 162,500 5,525,000
Rubbermaid............................... 168,000 3,822,000
Tupperware............................... 46,600 2,498,925
------------
62,019,600
------------
Consumer Services--14.6% ACNielsen................................ 154,800 2,341,350
Ara...................................... 21,000(a) 47,939
Block (H & R)............................ 196,900 5,710,100
Browning-Ferris Industries............... 185,000 4,856,250
Cognizant................................ 145,700 4,808,100
Darden Restaurants....................... 261,000 2,283,750
Deluxe................................... 171,000 5,600,250
Dillard Department Stores, Cl. A......... 70,000 2,161,250
Dun & Bradstreet......................... 150,700 3,579,125
Footstar................................. 93,340 2,321,833
ITT...................................... 170,100 7,378,087
Kroger................................... 91,000(a) 4,231,500
New York Times, Cl. A.................... 117,000 4,446,000
News, ADR................................ 95,000 1,983,125
Pittston Brinks.......................... 108,200 2,921,400
Rite Aid................................. 143,100 5,688,225
Tandy.................................... 70,500 3,102,000
Toys R Us................................ 259,300(a) 7,779,000
Waban.................................... 53,000(a) 1,378,000
Woolworth ............................... 474,000(a) 10,368,750
------------
82,986,034
------------
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Data Processing--.1% Canon.................................... 20,000 $ 442,333
------------
Electrical & Electronics--1.0% Alcatel Alsthom, ADR..................... 199,916 3,198,656
Hitachi.................................. 53,000 494,514
Hongkong Electric........................ 100,000 332,277
Mabuchi Motor............................ 7,000 352,570
Murata Manufacturing..................... 15,400 512,225
QPL International........................ 55,000 42,666
Siemens.................................. 7,000 329,332
Toshiba.................................. 60,000 377,365
------------
5,639,605
------------
Energy--6.8% British Petroleum, ADR................... 35,600 5,032,950
Coastal.................................. 50,800 2,482,850
Dresser Industries....................... 118,900 3,685,900
ENI S.p.A, ADR........................... 6,500 335,563
Elf Aquitaine............................ 3,193 290,569
Elf Aquitaine, ADR....................... 186,158 8,423,650
Exxon.................................... 54,000 5,292,000
Fletcher Challenge Energy................ 65,000 188,202
Mobil.................................... 40,600 4,963,350
Petronas Dagangan Berhad................. 20,000 51,475
Repsol................................... 8,000 306,697
Repsol, ADR.............................. 7,000 266,875
Tosco.................................... 43,626 4,470,562
Ultramar Diamond Shamrock................ 78,800 2,492,050
YPF Sociedad Anonima, ADR................ 19,000 479,750
------------
38,762,443
------------
Financial Services--19.6% AMMB Holdings Berhad..................... 6,000 50,366
Aetna.................................... 141,400 11,312,000
Allmerica Financial...................... 80,100 2,683,350
Allstate................................. 125,600 7,269,100
American Express......................... 88,000 4,972,000
American International................... 27,050 2,928,163
Bancorp Hawaii........................... 61,200 2,570,400
Bank of Boston........................... 121,390 7,799,308
BankAmerica.............................. 80,430 8,022,892
CIGNA.................................... 57,200 7,814,950
Chubb.................................... 97,000 5,213,750
Commonwealth Bank of Australia........... 1,437 13,755
Credit Saison............................ 25,000 559,395
Dean Witter, Discover & Co............... 84,000 5,565,000
Equitable Cos............................ 175,100 4,311,838
Everest Reinsurance...................... 138,200 3,973,250
Great Western Financial.................. 86,300 2,502,700
Grupo Financiero Inbursa................. 20,000 68,231
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Financial Services (continued) ING Groep................................ 4,992 $ 179,637
ITT Hartford............................. 53,100 3,584,250
Kansas City Southern Industries.......... 55,200 2,484,000
MBF Capital Berhad....................... 28,000 45,456
Morgan (JP) & Co......................... 35,800 3,494,975
NationsBank.............................. 78,000 7,624,500
Nichiei.................................. 4,500 332,397
Republic New York........................ 47,000 3,836,375
SAFECO................................... 138,800 5,473,925
State Bank of India, ADR................. 3,300(a) 57,321
Washington Mutual........................ 159,860 6,923,936
------------
111,667,220
------------
Foods & Related Products--1.0% Danone................................... 2,588 360,525
Devro.................................... 27,500 126,682
Goodman Fielder.......................... 69,635 86,361
Henkel KGaA.............................. 700(a) 33,524
Kao...................................... 45,000 524,838
Nestle................................... 225 241,018
PT Sari Husada........................... 8,000 52,159
Pick Szeged, ADR......................... 1,000(a,b) 58,500
Tablex................................... 10,000 28,535
Unilever NV, ADR......................... 23,500 4,118,375
Universal Robina......................... 90,000 50,475
------------
5,680,992
------------
Forest & Paper Products--.1% Amcor.................................... 28,900 185,872
Aracruz Celulose, ADR.................... 7,200 59,400
Koninklijke KNP.......................... 10,000 218,108
Smith (David S.)......................... 55,925 298,807
------------
762,187
------------
Health Care--7.3% Allergan................................. 160,000 5,700,000
Baxter International..................... 97,900 4,013,900
Biomet................................... 144,000 2,178,000
Bristol-Myers Squibb..................... 57,800 6,285,750
Novartis................................. 76,046 4,287,094
OrNda Healthcorp......................... 30,500(a) 892,125
Pharmacia & Upjohn....................... 199,000 7,885,375
Progressions Health Systems.............. 69,060(a) 2,072
Schering Plough.......................... 72,500 4,694,375
Tenet Healthcare......................... 122,000(a) 2,668,750
Watson Pharmaceuticals................... 56,000(a) 2,516,500
Yamanouchi Pharmaceutical................ 15,000 308,423
------------
41,432,364
------------
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Industrial Components--.1% Leader Universal Holdings Berhad......... 30,000 $ 62,958
Minebea.................................. 40,000 334,514
------------
397,472
------------
Insurance--.1% Bangkok Insurance........................ 1,600 22,706
Dai-Tokyo Fire & Marine Insurance........ 75,000 398,488
Pacific & Orient Berhad.................. 25,000 60,384
Zurich Versicherungs..................... 1,200 332,762
------------
814,340
------------
Leisure Time--.0% Harbour Centre Development............... 50,000 73,696
------------
Machinery--.3% Far East Levingston Shipbuilding......... 57,000 297,214
GEA...................................... 1,000 305,646
Laird.................................... 45,000 306,709
Mitsubishi Heavy Industries.............. 60,000 476,890
Scania AB 'A', ADR....................... 2,250 54,281
Scania AB 'B', ADR....................... 2,250 54,281
Scapa.................................... 50,862 213,833
Sulzer................................... 420 242,013
------------
1,950,867
------------
Merchandising--.1% Companhia Brasileira de Distribuicao
Grupo Pao de Acucar, ADR............... 2,000 35,250
Disco, ADR............................... 2,200 62,150
Ito-Yokado............................... 10,000 435,421
Magazine Zum Globus...................... 450 207,305
------------
740,126
------------
Metals--.1% Companhia Vale do Rio Doce, ADR.......... 3,500 67,375
Malayawata Steel Berhad.................. 27,000 50,889
Pohang Iron & Steel, ADR................. 3,000 60,750
RTZ...................................... 30,263 486,122
Tubes de Acero de Mexico, ADR............ 2,600(a) 41,275
------------
706,411
------------
Miscellaneous Materials--.1% Bunzl.................................... 95,871 382,537
Cristalerias de Chile, ADR............... 3,300 60,225
Empaques Ponderosa....................... 102,000(a) 62,998
------------
505,760
------------
Multi Industry--.8% ALFA..................................... 10,558 48,673
BTR...................................... 103,685 504,272
First Philippine......................... 20,000 45,627
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Multi Industry (continued) Hanson, ADR.............................. 460,000 $ 3,105,000
Hunter Douglas........................... 5,083 342,591
Malbak................................... 10,000 43,813
Orkla.................................... 3,000 190,207
------------
4,280,183
------------
Real Estate--.1% Cheung Kong.............................. 33,000 293,328
Empire East Land......................... 120,000(a) 54,753
IOI Properties Berhad.................... 20,000 64,938
------------
413,019
------------
Recreation--.0% Sankyo................................... 8,000 234,298
Yue Yuen Industrial...................... 374,000 142,647
------------
376,945
------------
Technology--5.3% Digital Equipment........................ 107,200(a) 3,899,400
General Instrument....................... 110,100(a) 2,380,913
KLA Instruments.......................... 55,000(a) 1,952,500
Lucent Technologies...................... 104,154 4,817,122
National Semiconductor................... 166,600(a) 4,060,875
Quantum.................................. 62,500(a) 1,789,062
Scientific-Atlanta....................... 160,000 2,400,000
Seagate Technology....................... 93,400(a) 3,689,300
Silicon Graphics......................... 206,400(a) 5,263,200
------------
30,252,372
------------
Telecommunications--.4% Cable & Wireless, ADR.................... 15,000 369,375
Compania de Telecomucicaciones, ADR...... 500 50,563
Koor Industries.......................... 500(a) 43,623
Korea Mobile Telecommunications, ADR..... 5,253 67,632
Portugal Telecom, ADR.................... 1,700 48,025
Royal PTT Nederland, ADR................. 6,778 256,717
Stet, Di Risp............................ 155,000 522,997
Tele Danmark, ADR........................ 11,000 299,750
Telecomunicacoes Brasileiras, ADR........ 1,200 91,800
Telefonica de Argentina.................. 26,400 69,182
Telefonica del Peru, ADR................. 5,000 94,375
Telefonos de Mexico...................... 120,000 197,540
Telefonos de Mexico, ADR................. 3,000 99,000
------------
2,210,579
------------
Transportation--1.2% Air New Zealand.......................... 59,818 162,215
CSX ..................................... 46,000 1,943,500
Singapore Airlines....................... 8,000 72,571
Transportacion Maritima, ADR............. 7,800 40,950
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Transportation (continued) Union Pacific............................ 68,300 $ 4,106,538
Yamato Transport......................... 38,500 399,136
------------
6,724,910
------------
Utilities--10.4% AT&T..................................... 138,000 6,003,000
CMS Energy............................... 121,800 4,095,525
Central Costanera, Cl. B................. 15,000 45,909
Companhia Energentina de Minas Gerais, ADR 2,900 98,600
Entergy.................................. 95,000 2,636,250
GTE...................................... 100,000 4,550,000
Gas Y Electridad......................... 6,000 383,372
Illinova................................. 197,100 5,420,250
Korea Electric Power, ADR................ 3,300 67,650
MCI Communications....................... 242,700 7,933,256
NYNEX.................................... 95,600 4,600,750
New England Electric System.............. 80,000 2,790,000
Pinnacle West Capital.................... 81,000 2,571,750
Powergen................................. 57,825 568,405
Sprint................................... 137,200 5,470,850
360 (Degrees) Communications............. 252,800 5,846,000
Tenaga Nasional Berhad................... 9,000 43,120
Unicom................................... 196,900 5,340,913
VEBA..................................... 6,000 346,528
Viag..................................... 800 313,563
------------
59,125,691
------------
TOTAL COMMON STOCKS
(cost $468,038,758).................... $550,834,388
============
Preferred Stocks--.0%
- --------------------------------------------------------------------------------
Appliances--.0% Brasmotor ............................... 200 $ 55,534
------------
Banking--.0% Banco Itau............................... 200 86,622
------------
Building Materials--.0% Companhia Cimento Portland Itau.......... 200 70,254
------------
Telecommunications--.0% Ericsson Telecomunicacoes................ 4,400 67,800
------------
TOTAL PREFERRED STOCKS
(cost $265,405)........................ $ 280,210
============
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Convertible Preferred Stocks--.1% Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Energy--.0% Petroleo Brasileiro...................... 300 $ 47,931
------------
Foods & Related Products--.1% Henkel KGaA-Vorzug....................... 7,800 391,266
------------
Telecommunications--.0% Philippine Long Distance Telecommunications, ADR 1,200 61,200
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(cost $439,212)........................ $ 500,397
============
Principal
Short-Term Investments--1.7% Amount
- --------------------------------------------------------------------------------- ----------
Commercial Paper; General Electric Corporation,
7.10%, 1/2/97
(cost $9,353,000)...................... $ 9,353,000 $ 9,353,000
============
TOTAL INVESTMENTS (cost $478,096,375)........................................... 98.4% $560,967,995
======= ============
CASH AND RECEIVABLES (NET)...................................................... 1.6% $ 9,360,342
======= ============
NET ASSETS...................................................................... 100.0% $570,328,337
======= ============
<FN>
Notes to Statement of Investments:
- ---------------------------------------------------------------------------------
(a) Non-income producing.
(b) Securities exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At December 31, 1996, these
securities amounted to $170,012 or approximately .03% of net assets.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $478,096,375 $560,967,995
Cash denominated in foreign currencies........... 1,571,039 1,583,996
Receivable for investment securities sold........ 15,825,879
Dividends and interest receivable................ 946,913
Receivable for shares of Beneficial Interest subscribed 12,928
------------
579,337,711
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 535,313
Due to Distributor............................... 7,320
Cash overdraft due to Custodian.................. 3,049,203
Payable for shares of Beneficial Interest redeemed 2,712,496
Payable for investment securities purchased...... 2,698,011
Trustees' fees payable........................... 7,031
------------
9,009,374
------------
NET ASSETS..................................................................... $570,328,337
------------
------------
REPRESENTED BY: Paid-in capital.................................. $469,617,126
Accumulated undistributed investment income--net.. 225,149
Accumulated net realized gain (loss) on investments 17,599,465
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 82,886,597
------------
NET ASSETS..................................................................... $570,328,337
------------
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
-------------------------
Investor Institutional Class R
Shares Shares Shares
------------ ------------ -----------
<S> <C> <C> <C>
Net Assets..................................................... $486,816,123 $71,893,997 $11,618,217
Shares Outstanding............................................. 16,015,108 2,366,163 381,467
NET ASSET VALUE PER SHARE...................................... $30.40 $30.38 $30.46
====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Operations Year Ended December 31, 1996
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $267,584 foreign taxes
withheld at source)............................ $ 10,230,237
Interest......................................... 600,815
------------
Total Income................................... $ 10,831,052
EXPENSES: Management fee--Note 2(a)......................... 4,593,348
Distribution fees--Note 2(b)...................... 1,203,950
Trustees' fees and expenses--Note 2(c)........... 63,282
------------
Total Expenses................................. 5,860,580
Less--reduction in management fee due to
undertaking--Note 2(a).......................... (103,470)
------------
Net Expenses................................... 5,757,110
------------
INVESTMENT INCOME--NET.......................................................... 5,073,942
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments and
foreign currency transactions................. $101,420,084
Net realized gain (loss) on forward currency
exchange contracts............................. (36,300)
------------
Net Realized Gain (Loss)....................... 101,383,784
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions............. (5,105,765)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 96,278,019
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $101,351,961
============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Investment income--net....................................................... $ 5,073,942 $ 6,286,623
Net realized gain (loss) on investments..................................... 101,383,784 44,708,361
Net unrealized appreciation (depreciation) on investments................... (5,105,765) 80,269,570
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations......... 101,351,961 131,264,554
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares........................................................... (4,113,567) (5,652,275)
Institutional shares...................................................... (647,083) (1,170,331)
Class R shares............................................................ (124,067) (20,018)
Net realized gain on investments:
Investor shares........................................................... (80,205,392) (32,708,062)
Institutional shares...................................................... (11,721,876) (6,089,493)
Class R shares............................................................ (1,866,594) (14,693)
------------ ------------
Total Dividends......................................................... (98,678,579) (45,654,872)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Investor shares........................................................... 110,377,880 32,376,118
Institutional shares...................................................... 14,132,483 92,766,522
Class R shares............................................................ 11,380,217 3,629,228
Dividends reinvested:
Investor shares........................................................... 74,407,664 34,209,203
Institutional shares...................................................... 11,944,449 7,078,027
Class R shares............................................................ 1,990,968 17,322
Cost of shares redeemed:
Investor shares........................................................... (101,845,407) (53,537,298)
Institutional shares...................................................... (30,775,024) (97,834,686)
Class R shares............................................................ (1,424,273) (5,221,642)
------------ ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions. 90,188,957 13,482,794
------------ ------------
Total Increase (Decrease) in Net Assets............................... 92,862,339 99,092,476
NET ASSETS:
Beginning of Period......................................................... 477,465,998 378,373,522
------------ ------------
End of Period............................................................... $570,328,337 $477,465,998
------------ ------------
------------ ------------
Undistributed investment income--net........................................... $ 225,149 $ 35,924
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
---------------------------------------
Year Ended Year Ended
December 31, 1996 December 31, 1995
------------------- -----------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Investor Shares
Shares sold.............................................................. 3,375,086 1,133,898
Shares issued for dividends reinvested................................... 2,435,917 1,141,448
Shares redeemed.......................................................... (3,126,844) (1,888,328)
---------- ----------
Net Increase (Decrease) in Shares Outstanding........................ 2,684,159 387,018
========== ==========
Institutional Shares
Shares sold.............................................................. 430,202 3,304,350
---------- ----------
Shares issued for dividends reinvested................................... 391,174 236,346
Shares redeemed.......................................................... (965,361) (3,450,788)
---------- ----------
Net Increase (Decrease) in Shares Outstanding........................ (143,985) 89,908
========== ==========
Class R
Shares sold.............................................................. 354,824 138,967
Shares issued for dividends reinvested................................... 65,018 577
Shares redeemed.......................................................... (44,489) (177,018)
---------- ----------
Net Increase (Decrease) in Shares Outstanding........................ 375,353 (37,474)
========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Financial Highlights
Reference is made to pages 5 and 6 of the Fund's Prospectus
dated May 1, 1997 for Investor and Class R. shares.
Reference is made to page 4 of the Fund's Prospectus
dated May 1, 1997 for Insittutional shares.
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Funds Trust (the "Trust") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering three
series including the Dreyfus Core Value Fund (the "Fund"). The Fund's investment
objective is to seek long-term growth of capital and current income. The Dreyfus
Corporation ("Manager") serves as the Fund's investment manager. The Manager is
a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an unlimited
number of shares of Beneficial Interest in the following classes of shares:
Investor, Institutional and Class R. Investor shares are sold primarily to
retail investors and bear a distribution fee. Institutional shares are offered
only to those customers of certain financial planners and investment advisers
who held shares of a predecessor class of the Fund as of April 4, 1994, and bear
a distribution fee. Class R shares are sold primarily to bank trust departments
and other financial service providers (including Mellon Bank and its affiliates)
acting on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee. Each class of
shares has identical rights and privileges, except with respect to the
distribution fee and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market. Securities
not listed on an exchange or the national securities market, or securities for
which there were no transactions, are valued at the average of the most recent
bid and asked prices. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Forward currency exchange contracts are valued
at the forward rate.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(c) Foreign currency transactions: The Fund does not isolate that portion of
the results of the operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in the market prices
of securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities
of short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions, the difference between the amount of
dividends, interest, and foreign withholding taxes recorded on the Fund's books,
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
the value of assets and liabilities
other than investments in securities, resulting from changes in exchange rates.
Such gains and losses are included with net realized and unrealized gain or loss
on investments.
(d) Forward currency exchange contracts: The Fund enters into forward
currency exchange contracts in order to hedge its exposure to changes in foreign
currency exchange rates on its foreign portfolio holdings. When executing
forward currency exchange contracts, the Fund is obligated to buy or sell a
foreign currency at a specified rate on a certain date in the future. With
respect to sales of forward currency exchange contracts, the Fund would incur a
loss if the value of the contract increases between the date the forward
contract is opened and the date the forward contract is closed. The Fund
realizes a gain if the value of the contract decreases between those dates. With
respect to purchases of forward currency exchange contracts, the Fund would
incur a loss if the value of the contract decreases between the date the forward
contract is opened and the date the forward contract is closed. The Fund
realizes a gain if the value of the contract increases between those dates. The
Fund is also exposed to credit risk associated with counter party nonperformance
on these forward currency exchange contracts which is typically limited to the
unrealized gain on each open contract. At December 31, 1996, there were no open
forward currency exchange contracts.
(e) Distributions to shareholders: Dividends are recorded on the ex-divided
date. Dividends from investment income-net are declared and paid on a quarterly
basis. Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(f) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
NOTE 2--Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .90% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, Rule 12b-1 distribution fees and expenses, fees and expenses of
non-interested Trustees (including counsel fees) and extraordinary expenses. The
Manager is also required to reduce its fee in an amount equal to the Fund's
allocable portion of fees and expenses of the non-interested Trustees (including
counsel). In addition, during the period ended December 31, 1996, the Manager
voluntarily agreed to waive its fee by .02% of the value of the Fund's average
daily net assets. The reduction in the management fee pursuant to the waiver
amounted to $103,470 during the period ended December 31, 1996.
(b) Distribution plan: The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act relating to its Investor and
Institutional shares. Under the Plan, the Fund may pay annually up to .25% of
the value of the average daily net assets attributable to its Investor shares
and up to .15% of the value of
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
the average daily net assets
attributable to its Institutional shares to compensate the Distributor and
Dreyfus Service Corporation, an affiliate of the Manager, for shareholder
servicing activities and the Distributor for activities primarily intended to
result in the sale of Investor shares. The Class R shares bear no distribution
fee. During the period ended December 31, 1996, the distribution fee for the
Investor shares and Institutional shares were $1,105,214 and $98,736,
respectively.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of majority of those Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan.
(c) Trustees' Fees: Each trustee who is not an "interested person" as defined
in the Act receives $27,000 per year, $1,000 for each Board meeting attended and
$750 for each Audit Committee meeting attended and is reimbursed for travel and
out-of-pocket expenses. These expenses are paid in total by the following funds:
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust. In addition the Chairman of the Board receives
an annual fee of $75,000 per year. These fees and expenses are charged and
allocated to each series based on net assets.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts, during
the period ended December 31, 1996 amounted to $446,015,030 and $458,940,931,
respectively.
At December 31, 1996, accumulated net unrealized appreciation on investments
was $82,871,620, consisting of $91,811,941 gross unrealized appreciation and
$8,940,321 gross unrealized depreciation.
At December 31, 1996, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 4--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. For the period ended December 31, 1996, the Fund did not borrow
under the line of credit.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Funds Trust:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Core Value Fund of The
Dreyfus/Laurel Funds Trust as of December 31, 1996, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years or periods in the three-year period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years or periods in the two-year period ended
December 31, 1993 were audited by other auditors whose report thereon, dated
February 14, 1994, expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
as of December 31, 1996, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Dreyfus Core Value Fund of The Dreyfus/Laurel Funds Trust as of December 31,
1996, the results of its operations for the year then ended, changes in its net
assets for each of the years in the two-year period then ended, and its
financial highlights for each of the years or periods in the three-year period
then ended, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
February 14, 1997
____________________________________________________________________________
DREYFUS PREMIER MANAGED INCOME FUND
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1997
____________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
the Dreyfus Premier Managed Income Fund (formerly, the Premier Managed
Income Fund) (the "Fund"), dated May 1, 1997, as it may be revised from time
to time. The Fund is a separate, diversified portfolio of The
Dreyfus/Laurel Funds Trust (formerly, The Laurel Funds Trust), an open-end
management investment company (the "Trust"), known as a mutual fund. To
obtain a copy of the Fund's Prospectus, please write to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call one of the
following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and outside of Canada -- Call 516-794-5452
The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
manager.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies B-2
Management of the Fund B-12
Management Arrangements B-19
Purchase of Fund Shares B-20
Distribution and Service Plans B-22
Redemption of Fund Shares B-23
Shareholder Services B-24
Determination of Net Asset Value B-28
Dividends, Other Distributions and Taxes B-28
Portfolio Transactions B-32
Performance Information B-34
Information About the Fund B-36
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors B-37
Financial Statements B-38
Appendix A B-39
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Description of the
Fund."
Portfolio Securities
Currency Transactions. The Fund may engage in currency exchange
transactions as a means of managing certain risks associated with purchasing
and selling securities denominated in foreign securities. Generally, the
currency exchange transactions of the Fund will be conducted on a spot
(i.e., cash) basis at the spot rate for purchasing or selling currency
prevailing in the currency exchange market. This rate under normal market
conditions differs from the prevailing exchange rate in an amount generally
less than 0.1% due to the cost of converting from one currency to another.
The Fund also may deal in forward exchanges between currencies of the
different countries in which it invests as a hedge against possible
variations in the exchange rates between these currencies. This is
accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date and price set at the time of the
contract.
Dealings in forward currency exchanges by the Fund are limited to hedging
involving either specific transactions or aggregate portfolio positions.
Transaction hedging is the purchase or sale of foreign currency with respect
to specific receivables or payables of a Fund generally arising in
connection with the purchase or sale of its portfolio securities. Position
hedging is the sale of foreign currency with respect to portfolio security
positions denominated or quoted in such currency. The Fund will not
speculate in forward currency exchanges. The Fund may position hedge with
respect to a particular currency to an extent greater than the aggregate
market value (at the time of making such sale) of the securities held in its
portfolio denominated or quoted in or currently convertible into that
particular currency. If the Fund enters into a position hedging transaction,
its custodian or sub-custodian bank will place cash or readily marketable
securities in a segregated account of the Fund in an amount equal to the
value of the Fund's total assets committed to the consummation of such
forward contract. If the value of the securities placed in the segregated
account declines, additional cash or securities will be placed in the
account so that the value of the account will equal the amount of the Fund's
commitment with respect to such contracts. The Fund will not attempt to
hedge all of its foreign portfolio positions and will enter into such
transactions only to the extent, if any, deemed appropriate by Dreyfus. The
Fund will not enter into a position hedging commitment if, as a result
thereof, the Fund would have more than 15% of the value of its total assets
committed to such contracts. The Fund will not enter into a forward contract
with a term of more than one year.
It may not be possible for the Fund to hedge against a devaluation that
is so generally anticipated that the Fund is not able to contract to sell
the currency at a price above the devaluation level it anticipates. The cost
to the Fund of engaging in currency transactions varies with such factors as
the currency involved, the length of the contract period and the market
conditions then prevailing. Since transactions in currency exchanges are
usually conducted on a principal basis, no fees or commissions are involved.
At or before the maturity of a forward contract, the Fund may either sell
a portfolio security and make delivery of the currency, or it may retain the
security and offset its contractual obligation to deliver the currency by
purchasing a second contract with the same currency trader obligating it to
purchase, on the same maturity date, the same amount of the currency. If the
Fund retains the portfolio security and engages in an offsetting
transaction, the Fund, at the time of execution of the offsetting
transaction, will incur a gain or a loss (as described below) to the extent
that there has been movement in forward contract prices. If the Fund engages
in an offsetting transaction, it may subsequently enter into a new forward
contract to sell the currency. Should forward prices decline during the
period between the Fund's entering into a forward contract for the sale of a
currency and the date it enters into an offsetting contract for the purchase
of the currency, the Fund will realize a gain to the extent the price of the
currency it has agreed to sell exceeds the price of the currency it has
agreed to purchase. Should forward prices increase, the Fund will suffer a
loss to the extent the price of the currency it has agreed to purchase
exceeds the price of the currency it has agreed to sell.
The use of forward currency contracts by the Fund will be limited to the
transactions described above. The Fund is not required to enter into such
transactions with regard to its portfolio securities, regardless of currency
denomination, and will not do so unless deemed appropriate by Dreyfus. The
use of forward currency contracts does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of
exchange which can be achieved at some future point in time. In addition,
although forward currency contracts tend to minimize the risk of loss due to
a decline in the value of the hedged currency, they also tend to limit any
potential gain which might result should the value of the currency increase.
Because the Fund invests in foreign securities, the Fund will hold from
time to time various foreign currencies pending its investment in foreign
securities or conversion into U.S. dollars. Although the Fund values its
assets daily in terms of U.S. dollars, it does not convert its holdings of
foreign currencies into U.S. dollars on a daily basis. When converting
foreign currencies to U.S. dollars, the Fund may incur costs of currency
conversion. A foreign exchange dealer does not charge a fee for conversion,
but it does realize a profit based on the difference, which is known as the
spread, between the prices at which the dealer is buying and selling various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
resell that currency to the dealer.
U.S. Government Securities. The Fund may invest in U.S. Government
Securities that are direct obligations of the U.S. Treasury, or that are
issued by agencies and instrumentalities of the U.S. Government and
supported by the full faith and credit of the U.S. Government. These include
Treasury notes, bills and bonds and securities issued by the Government
National Mortgage Association ("GNMA"), the Federal Housing Administration,
the Department of Housing and Urban Development, the Export-Import Bank, the
Farmers Home Administration, the General Services Administration, the
Maritime Administration and the Small Business Administration.
The Fund may also invest in U.S. Government Securities that are not
supported by the full faith and credit of the U.S. Government. These include
securities issued by the Federal National Mortgage Association ("FNMA"), the
Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Home Loan Banks,
Tennessee Valley Authority, Student Loan Marketing Association and District
of Columbia Armory Board. Because the U.S. Government is not obligated by
law to provide support to an instrumentality it sponsors, the Fund will
invest in obligations issued by such an instrumentality only when Dreyfus
determines that the credit risk with respect to the instrumentality does not
make its securities unsuitable for investment by the Fund.
GNMA certificates represent ownership interests in a pool of mortgages
issued by a mortgage banker or other mortgagee. Distributions on GNMA
certificates include principal and interest components. GNMA, a corporate
instrumentality of the U.S. Department of Housing and Urban Development,
guarantees timely payment of principal and interest on GNMA certificates;
this guarantee is deemed a general obligation of the United States, backed
by its full faith and credit.
Each of the mortgages in a pool supporting a GNMA certificate is insured
by the Federal Housing Administration or the Farmers Home Administration, or
is insured or guaranteed by the Veterans Administration. The mortgages have
maximum maturities of 40 years. Government statistics indicate, however,
that the average life of the underlying mortgages is shorter, due to
scheduled amortization and unscheduled prepayments (attributable to
voluntary prepayments or foreclosures). GNMA has introduced a pass-through
security backed by adjustable-rate mortgages. The securities will bear
interest at a rate which will be adjusted annually. The prepayment
experience of the mortgages underlying these securities may vary from that
for fixed-rate mortgages.
FNMA and FHLMC are Government sponsored corporations owned by private
stockholders. Each is subject to general regulation by an office of the
Department of Housing and Urban Development. FNMA purchases residential
mortgages from a list of approved seller/servicers which include state and
federally-chartered savings and loan associations, mutual savings banks,
commercial banks and credit unions and mortgage bankers. Pass-through
securities issued by FNMA and FHLMC are guaranteed by those entities as to
payment of principal and interest.
Bank Obligations. The Fund is permitted to invest in high-quality,
short-term money market instruments. The Fund may invest temporarily, and
without limitation, in such instruments when, in Dreyfus' opinion, a
"defensive" investment posture is warranted.
Certificates of deposit ("CDs") are short-term negotiable obligations of
commercial banks; time deposits ("TDs") are non-negotiable deposits
maintained in banking institutions for specified periods of time at stated
interest rates; and bankers' acceptances are time drafts drawn on commercial
banks by borrowers, usually in connection with international transactions.
Domestic commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to be members
of the Federal Reserve System and to be insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Domestic banks organized under state law
are supervised and examined by state banking authorities but are members of
the Federal Reserve System only if they elect to join. In addition, all
banks whose certificates of deposit may be purchased by the Trust are
insured by the FDIC and are subject to Federal examination and to a
substantial body of Federal law and regulation. As a result of governmental
regulations, domestic branches of foreign banks are, among other things,
generally required to maintain specified levels of reserves, and are subject
to other supervision and regulations designed to promote financial
soundness.
Obligations of foreign branches of domestic banks, such as CDs and TDs,
may be general obligations of the parent bank in addition to the issuing
branch or may be limited by the terms of a specific obligation and by
governmental regulations. Payment of interest and principal upon obligations
of foreign banks and foreign branches of domestic banks may be affected by
governmental action in the country of domicile of the branch (generally
referred to as sovereign risk). Examples of such action would be the
imposition of currency controls, interest limitations, seizure of assets, or
the declaration of a moratorium. Evidence of ownership of portfolio
securities may be held outside of the United States, and the Trust may be
subject to the risks associated with the holdings of such property overseas.
Obligations of domestic branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by Federal and state
regulation as well as by governmental action in the countries in which the
foreign bank has its head office. In addition, there may be less publicly
available information about a domestic branch of a foreign bank than about a
domestic bank. The Trust will carefully consider these factors in making
such investments.
Mortgage Backed Securities. The Fund may invest in various mortgage
backed securities, as described in its Prospectus. Mortgage backed
securities represent an ownership interest in a pool of residential mortgage
loans. These securities are designed to provide monthly payments of interest
and principal to the investor. The mortgagor's monthly payments to his/her
lending institution are "passed-through" to an investor. Most issuers or
poolers provide guarantees of payments, regardless of whether or not the
mortgagor actually makes the payment. The guarantees made by issuers or
poolers are supported by various forms of credit, collateral, guarantees or
insurance, including individual loan, title, pool and hazard insurance
purchased by the issuer. There can be no assurance that the private issuers
or poolers can meet their obligations under the policies. Mortgage backed
securities issued by private issuers or poolers, whether or not such
securities are subject to guarantees, may entail greater risk than
securities directly or indirectly guaranteed by the U.S. Government.
Interests in pools of mortgage backed securities differ from other forms
of debt securities, which normally provide for periodic payment of interest
in fixed amounts with principal payments at maturity or specified call
dates. Instead, these securities provide a monthly payment which consists of
both interest and principal payments. In effect, these payments are a
"pass-through" of the monthly payments made by the individual borrowers on
their residential mortgage loans, net of any fees paid. Additional payments
are caused by repayments resulting from the sale of the underlying
residential property, refinancing or foreclosure, net of fees or costs which
may be incurred. Some mortgage backed securities are described as "modified
pass-through." These securities entitle the holders to receive all interest
and principal payments owed on the mortgages in the pool, net of certain
fees, regardless of whether or not the mortgagors actually make the
payments. Collateralized Mortgage Obligations ("CMOs") are generally issued
as a series of different classes. An issue of CMOs tends to be backed by a
larger number of mortgages than GNMA, FNMA or FHLMC certificates, thus
allowing greater statistical prediction of prepayment characteristics.
Interest and principal payments on the mortgages underlying any series will
first be applied to meet the interest payment requirements of each class in
the series other than any class in respect of which interest accrues but is
not paid or any principal only class. Then, principal payments on the
underlying mortgages are generally applied to pay the principal amount of
the class that has the earliest maturity date. Once that class is retired,
the principal payments on the underlying mortgages are applied to the class
with the next earliest maturity date. This is repeated until all classes are
paid. Therefore, while each class of CMOs remains subject to prepayment as
the underlying mortgages prepay, structuring several classes of CMOs in the
stream of principal payments allows one to more closely estimate the period
of time when any one class is likely to be repaid. The Fund may invest in
mortgage backed securities issued by FHLMC and FNMA.
Commercial banks, savings and loan institutions, private mortgage
insurance companies, mortgage bankers and other secondary market issuers
also create pass-through pools of conventional residential mortgage loans,
including CMOs, in which the Fund can invest. Pools created by such
non-governmental issuers generally offer a higher rate of interest than
Government and Government-related pools because there are no direct or
indirect U.S. Government guarantees of payments in the former pools.
However, timely payment of interest and principal of these pools is
supported by various forms of insurance or guarantees, including individual
loan, title, pool and hazard insurance purchased by the issuer. The
insurance and guarantees are issued by U.S. Government entities, private
insurers and the mortgage poolers. There can be no assurance that the
private insurers or mortgage poolers can meet their obligations under the
policies.
The Fund expects that U.S. Government or private entities may create
mortgage loan pools offering pass-through investments in addition to those
described above. The mortgages underlying these securities may be
alternative mortgage instruments, that is, mortgage instruments whose
principal or interest payment may vary or whose terms to maturity may be
shorter than previously customary. As new types of mortgage backed
securities are developed and offered to investors, the Fund will, consistent
with its investment objective and policies, consider making investments in
such new types of securities.
Other Asset-Backed Securities. The Fund may also invest in non-mortgage
Asset-Backed Securities. The purchase of non-mortgage Asset-Backed
Securities raises considerations peculiar to the financing of the
instruments underlying such securities. For example, most organizations that
issue Asset-Backed Securities relating to motor vehicle installment purchase
obligations perfect their interests in their respective obligations only by
filing a financing statement and by having the servicer of the obligations,
which is usually the originator, take custody thereof. In such
circumstances, if the servicer were to sell the same obligations to another
party, in violation of its duty not to do so, there is a risk that such
party could acquire an interest in the obligations superior to that of the
holders of the Asset-Backed Securities. Also, although most such obligations
grant a security interest in the motor vehicle being financed, in most
states the security interest in a motor vehicle must be noted on the
certificate of title to perfect such security interest against competing
claims of other parties. Due to the large number of vehicles involved,
however, the certificate of title to each vehicle financed, pursuant to the
obligations underlying the Asset-Backed Securities, usually is not amended
to reflect the assignment of the seller's security interest for the benefit
of the holders of the Asset-Backed Securities. Therefore, there is the
possibility that recoveries on repossessed collateral may not, in some
cases, be available to support payments on those securities. In addition,
various state and Federal laws give the motor vehicle owner the right to
assert against the holder of the owner's obligation certain defenses such
owner would have against the seller of the motor vehicle. The assertion of
such defenses could reduce payments on the related Asset-Backed Securities.
Insofar as credit card receivables are concerned, credit card holders are
entitled to the protection of a number of state and Federal consumer credit
laws, many of which give such holders the right to set off certain amounts
against balances owed on the credit card thereby reducing the amounts paid
on such receivables. In addition, unlike most other Asset-Backed Securities,
credit card receivables are unsecured obligations of the card holder.
The development of non-mortgage backed securities is at an early stage
compared to mortgage backed securities. While the market for Asset-Backed
Securities is becoming increasingly liquid, the market for mortgage backed
securities issued by certain private organizations and non-mortgage backed
securities is not as well developed. Dreyfus intends to limit its purchases
of mortgage backed securities issued by certain private organizations and
non-mortgage backed securities to securities that are readily marketable at
the time of purchase.
Low-Rated Securities. The Fund may invest in low-rated and comparable
unrated securities. The effect a recession might have on such securities is
not known. Any such recession, however, could severely disrupt the market
for such securities and adversely affect the value of such securities. Any
such economic downturn also could adversely affect the ability of the
issuers of such securities to repay principal and pay interest thereon.
The ratings of the various nationally recognized statistical rating
organizations ("NRSROs") such as Moody's Investors Service, Inc. ("Moody's")
and Standard & Poor's Ratings Service, a division of McGraw-Hill Companies,
Inc. ("S&P") generally represent the opinions of those organizations as to
the quality of the securities that they rate. Such ratings, however, are
relative and subjective, are not absolute standards of quality and do not
evaluate the market risk of the securities. Although Dreyfus uses these
ratings as a criterion for the selection of securities for the Fund, Dreyfus
also relies on its independent analysis to evaluate potential investments
for the Fund. The Fund's achievement of its investment objective may be more
dependent on Dreyfus' credit analysis of low-rated and unrated securities
than would be the case for a portfolio of higher-rated securities.
Subsequent to its purchase by the Fund, an issue of securities may cease
to be rated or its rating may be reduced below the minimum required for
purchase by the Fund. In addition, it is possible that an NRSRO might not
timely change its ratings of a particular issue to reflect subsequent
events. None of these events will require the sale of the securities by the
Fund, although Dreyfus will consider these events in determining whether the
Fund should continue to hold the securities. To the extent that the ratings
given by an NRSRO for securities may change as a result of changes in the
rating systems or due to a corporate reorganization of the NRSRO, the Fund
will attempt to use comparable ratings as standards for its investments in
accordance with the investment objective and policies of the Fund.
Repurchase Agreements. The Fund may enter into repurchase agreements
with U.S. Government Securities dealers recognized by the Federal Reserve
Board, with member banks of the Federal Reserve System, or with such other
brokers or dealers that meet the credit guidelines of the Board of Trustees.
In a repurchase agreement, the Fund buys a security from a seller that has
agreed to repurchase the same security at a mutually agreed upon date and
price. The Fund's resale price will be in excess of the purchase price,
reflecting an agreed upon interest rate. This interest rate is effective
for the period of time the Fund is invested in the agreement and is not
related to the coupon rate on the underlying security. Repurchase
agreements may also be viewed as a fully collateralized loan of money by the
Fund to the seller. The period of these repurchase agreements will usually
be short, from overnight to one week, and at no time will the Fund invest in
repurchase agreements for more than one year. The Fund will always require
that it receive as collateral securities whose market value including
accrued interest is, and during the entire term of the agreement remains, at
least equal to 100% of the dollar amount invested by the Fund in the
agreement, and the Fund will make payment for such securities only upon
physical delivery or upon evidence of book entry transfer to the account of
the Fund's custodian. If the seller defaults, the Fund might incur a loss
if the value of the collateral securing the repurchase agreement declines
and might incur disposition costs in connection with liquidating the
collateral. In addition, if bankruptcy proceedings are commenced with
respect to the seller of a security which is the subject of a repurchase
agreement, realization upon the collateral by the Fund may be delayed or
limited. Dreyfus seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of the obligors under
repurchase agreements, in accordance with the credit guidelines of the
Trust's Board of Trustees.
When-Issued Securities. New issues of U.S. Treasury and Government
securities are often offered on a when-issued basis. This means that
delivery and payment for the securities normally will take place
approximately 7 to 45 days after the date the buyer commits to purchase
them. The payment obligation and the interest rate that will be received on
securities purchased on a when-issued basis are each fixed at the time the
buyer enters into the commitment. The Fund will make commitments to
purchase such securities only with the intention of actually acquiring the
securities, but the Fund may sell these securities or dispose of the
commitment before the settlement date if it is deemed advisable as a matter
of investment strategy. Cash or marketable high-grade debt securities equal
to the amount of the above commitments will be segregated on the Fund's
records. For the purpose of determining the adequacy of these securities the
segregated securities will be valued at market. If the market value of such
securities declines, additional cash or securities will be segregated on the
Fund's records on a daily basis so that the market value of the account will
equal the amount of such commitments by the Fund.
Securities purchased on a when-issued basis and the securities held by
the Fund are subject to changes in market value based upon the public's
perception of changes in the level of interest rates. Generally, the value
of such securities will fluctuate inversely to changes in interest rates --
i.e., they will appreciate in value when interest rates decline and decrease
in value when interest rates rise. Therefore, if in order to achieve higher
interest income the Fund remains substantially fully invested at the same
time that it has purchased securities on a "when-issued" basis, there will
be a greater possibility of fluctuation in the Fund's net asset value.
When payment for when-issued securities is due, the Fund will meet its
obligations from then-available cash flow, the sale of segregated
securities, the sale of other securities or, and although it would not
normally expect to do so, from the sale of the when-issued securities
themselves (which may have a market value greater or less than the Fund's
payment obligation). The sale of securities to meet such obligations carries
with it a greater potential for the realization of capital gains, which are
subject to federal income taxes.
Commercial Paper. The Fund may invest in commercial paper issued in
reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act of 1933 ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition under the
federal securities laws and generally is sold to investors who agree that
they are purchasing the paper for an investment and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) paper is normally resold to other investors
through or with the assistance of the issuer or investment dealers who make
a market in Section 4(2) paper, thus providing liquidity. Pursuant to
guidelines established by the Trust's Board of Trustees, Dreyfus may
determine that Section 4(2) paper is liquid for the purposes of complying
with the Fund's investment restriction relating to investments in illiquid
securities.
Management Policies
The Fund engages, except as noted, in the following practice in
furtherance of its investment objective.
Loans of Fund Securities. The Fund has authority to lend its portfolio
securities provided (1) the loan is secured continuously by collateral
consisting of U.S. Government Securities or cash or cash equivalents
adjusted daily to make a market value at least equal to the current market
value of these securities loaned; (2) the Fund may at any time call the loan
and regain the securities loaned; (3) the Fund will receive any interest or
dividends paid on the loaned securities; and (4) the aggregate market value
of securities loaned will not at any time exceed one-third of the total
assets of the Fund. In addition, it is anticipated that the Fund may share
with the borrower some of the income received on the collateral for the loan
or that it will be paid a premium for the loan. In determining whether to
lend securities, Dreyfus considers all relevant factors and circumstances
including the creditworthiness of the borrower.
Master/Feed Option. The Trust may in the future seek to achieve the
Fund's investment objectives by investing all of the Fund's assets in
another investment company having the same investment objectives and
substantially the same investment policies and restrictions as those
applicable to the Fund. Shareholders of the Fund will be given at least 30
days' prior notice of any such investment. Such investment would be made
only if the Trustees detemine it to be in the best interest of the Fund and
its shareholders. In making that determination, the Trustees will consider,
among other things, the benefits to shareholders and/or the opportunity to
reduce costs and achieve operational efficiencies. Although the Fund
believes that the Trustees will not approve an arrangement that is likely to
result in higher costs, no assurance is given that costs will be materially
reduced if this option is implemented.
Investment Restrictions
The following limitations have been adopted by the Fund. The Fund may
not change any of these fundamental investment limitations without the
consent of: (a) 67% or more of the shares present at a meeting of
shareholders duly called if the holders of more than 50% of the outstanding
shares of the Fund are present or represented by proxy; or (b) more than 50%
of the outstanding shares of the Fund, whichever is less. The Fund may not:
1. Purchase any securities which would cause 25% or more of the value of
the Fund's total assets at the time of such purchase to be invested in the
securities of one or more issuers conducting their principal activities in
the same industry. (For purposes of this limitation, U.S. Government
Securities and state or municipal governments and their political
subdivisions are not considered members of any industry. In addition, this
limitation does not apply to investments of domestic banks, including U.S.
branches of foreign banks and foreign branches of U.S. banks.)
2. Borrow money or issue senior securities as defined in the Investment
Company Act of 1940, as amended (the "1940 Act") except that (a) the Fund
may borrow money in an amount not exceeding one-third of the Fund's total
assets at the time of such borrowing, and (b) the Fund may issue multiple
classes of shares. The purchase or sale of futures contracts and related
options shall not be considered to involve the borrowing of money or
issuance of senior securities.
3. Make loans or lend securities, if as a result thereof more than
one-third the Fund's total assets would be subject to all such loans. For
purposes of this restriction debt instruments and repurchase agreements
shall not be treated as loans.
4. Underwrite securities issued by any other person, except to the extent
that the purchase of securities and the later disposition of such securities
in accordance with the Fund's investment program may be deemed an
underwriting.
5. Purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate,
including mortgage loans, or securities of companies that engage in the real
estate business or invest or deal in real estate or interests therein).
6. Purchase or sell commodities except that the Fund may enter into
futures contracts and related options, forward currency contracts and other
similar instruments.
7. Purchase with respect to 75% of the Fund's total assets securities of
any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more
than 5% of the Fund's total assets would be invested in the securities of
that issuer, or (b) the Fund would hold more than 10% of the outstanding
voting securities of that issuer.
The Fund may, notwithstanding any other fundamental investment policy or
restriction, invest all of its investable assets in securities of a single
open-end management investment company with substantially the same
investment objective, policies, and restrictions as the Fund.
The Fund has adopted the following additional non-fundamental investment
restrictions. These non-fundamental restrictions may be changed without
shareholder approval, in compliance with applicable law and regulatory
policy.
1. The Trust will not purchase or retain the securities of any issuer if
the officers, directors or Trustees of the Trust, its advisers, or managers
owning beneficially more than one half of one percent of the securities of
each issuer together own beneficially more than five percent of such
securities.
2. The Fund will not purchase securities of issuers (other than
securities issued or guaranteed by domestic or foreign governments or
political subdivisions thereof), including their predecessors, that have
been in operation for less than three years, if by reason thereof the value
of the Fund's investment in securities would exceed 5% of the Fund's total
assets. For purposes of this limitation, sponsors, general partners,
guarantors and originators of underlying assets may be treated as the issuer
of a security.
3. The Fund will not purchase puts, calls, straddles, spreads and any
combination thereof if by reason thereof the value of its aggregate
investment in such classes of securities will exceed 5% of its total assets
except that: (a) this restriction shall not apply to standby commitments,
and (b) this restriction shall not apply to the Fund's transactions in
futures contracts and options.
4. The Fund will not purchase warrants if at the time of such purchase:
(a) more than 5% of the value of the Fund's assets would be invested in
warrants, or (b) more than 2% of the value of the Fund's assets would be
invested in warrants that are not listed on the New York or American Stock
Exchange (for purposes of this restriction, warrants acquired by the Fund in
units or attached to securities will be deemed to have no value).
5. The Fund will not invest more than 15% of the value of its net assets
in illiquid securities, including repurchase agreements with remaining
maturities in excess of seven days, time deposits with maturities in excess
of seven days, and other securities which are not readily marketable. For
purposes of this restriction, illiquid securities shall not include
commercial paper issued pursuant to Section 4(2) of the Securities Act of
1933 and securities which may be resold under Rule 144A under the Securities
Act of 1933, provided that the Board of Trustees, or its delegate,
determines that such securities are liquid, based upon the trading markets
for the specific security.
6. The Fund may not invest in securities of other investment companies,
except as they may be acquired as part of a merger, consolidation or
acquisition of assets and except to the extent otherwise permitted by the
1940 Act.
7. The Fund will not purchase oil, gas or mineral leases (the Fund may,
however, purchase and sell the securities of companies engaged in the
exploration, development, production, refining, transporting and marketing
of oil, gas or minerals).
8. The Fund shall not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amounts to the securities
sold short, and provided that transactions in futures contracts and options
are not deemed to constitute selling securities short.
9. The Fund shall not purchase securities on margin, except that the Fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection with futures
contracts and options shall not constitute purchasing securities on margin.
10. The Fund shall not purchase any security while borrowings
representing more than 5% of the Fund's total assets are outstanding.
As an operating policy, the Fund will not invest more than 25% of the
value of its total assets, at the time of purchase, in domestic banks,
including U.S. branches of foreign banks and foreign branches of U.S. banks.
The Trust's Board of Trustees may change this policy without shareholder
approval. Notice will be given to shareholders if this policy is changed by
the Board.
If a percentage restriction is adhered to at the time of an investment, a
later increase or decrease in such percentage resulting from a change in the
values of assets will not constitute a violation of such restriction, except
as otherwise required by the 1940 Act.
MANAGEMENT OF THE FUND
Principal Shareholders
The following shareholder owned of record more than 5% of Class A shares
of the Fund at March 31, 1997: Boston Safe Deposit and Trust Company, One
Cabot Road, Medford, MA 02155-1541, 5% record.
The following shareholder owned of record more than 5% of Class B shares
of the Fund at March 31, 1997: Merrill Lynch Pierce Fenner & Smith, Inc.,
4800 Deer Lake Drive, Jacksonville, Florida 32246-6484, 21% record.
The following shareholders owned of record more than 5% of Class C shares
of the Fund at March 31, 1997: Merrill Lynch Pierce Fenner and Smith, Inc.,
4800 Dear Lake Drive, Jacksonville, Florida 32246-6484, 41% record; B. Zaitz
and Sons, Inc., P.O. Box 190, Highstown, NJ 08520-0190, 29% record; Dreyfus
Trust Company, P.O. Box 7351, Bloomfield, CT 06002-7351, 8% record; Edgar
Rongasawmy, 566 Zion Street, Hartford, CT 06106-2348, 5% record.
The following shareholders owned of record more than 5% of Class R shares
of the Fund at March 31, 1997; Boston Safe Deposit and Trust Company, P.O.
Box 3198, Pittsburgh, PA 15230-3198, 26% record; Boston and Company, P.O.
Box 3198, Pittsburgh, PA 15230-3198, 22% record; Boston Safe Deposit and
Trust Company, Attention: Lien Kennedy, One Cabot Road, Medford, MA 02155-
5158, 15% record; Dreyfus Trust Company, 144 Glenn Curtiss Boulevard,
Uniondale, NY 11556-0144, 6% record.
Federal Law Affecting Mellon Bank
The Glass-Steagall Act of 1933 prohibits national banks from engaging in
the business of underwriting, selling or distributing securities and
prohibits a member bank of the Federal Reserve System from having certain
affiliations with an entity engaged principally in that business. The
activities of Mellon Bank, N.A. ("Mellon Bank") in informing its customers
of, and performing, investment and redemption services in connection with
the Fund, and in providing services to the Fund as custodian, as well as
Dreyfus' investment advisory activities, may raise issues under these
provisions. Mellon Bank has been advised by counsel that the activities
contemplated under there arrangements are consistent with statutory and
regulatory obligations.
Changes in either federal or state statutes and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as further judicial or administrative decisions or interpretations of
such future statutes and regulations, could prevent Mellon Bank or Dreyfus
from continuing to perform all or a part of the above services for its
customers and/or the Fund. If Mellon Bank or Dreyfus were prohibited from
serving the Fund in any of its present capacities, the Board of Trustees
would seek an alternative provider(s) of such services.
Trustees and Officers of the Trust
The Trust has a Board composed of eleven Trustees which supervises the
Trust's investment activities and reviews contractual arrangements with
companies that provide the Fund with services. The following lists the
Trustees and officers and their positions with the Trust and their present
and principal occupations during the past five years. Each Trustee who is
an "interested person" of the Trust (as defined in the 1940 Act) is
indicated by an asterisk. Each of the Trustees also serves as a Trustee of
The Dreyfus/Laurel Tax-Free Municipal Funds and as a Director of The
Dreyfus/Laurel Funds, Inc. (collectively, with the Trust, the
"Dreyfus/Laurel Funds").
o+RUTH MARIE ADAMS. Trustee of the Trust; Professor of English and Vice
President Emeritus, Dartmouth College; Senator, United Chapters of Phi
Beta Kappa; Trustee, Woods Hole Oceanographic Institution; from
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 81 years old. Address: 1026 Kendal Lyme Road, Hanover, New
Hampshire 03755.
o+FRANCIS P. BRENNAN. Chairman of the Board of Trustees and Assistant
Treasurer of the Trust; Director and Chairman, Massachusetts Business
Development Corp; and from November 1995 to January 1997, Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio. Age: 79 years old. Address: Massachusetts Business
Development Corp., 50 Milk Street, Boston, Massachusetts 02109.
o+JOSEPH S. DiMARTINO. Trustee of the Trust since February 1995. Since
January 1995, Mr. DiMartino has served as Chairman of the Board of
various funds in the Dreyfus Family of Funds. He is also Chairman of
the Board of Noel Group, Inc., a venture capital company and a Director
of the Muscular Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway, Inc., Curtis Industries, Inc., Simmons Outdoor
Corporation and Staffing Resources, Inc. Mr. DiMartino is also a Board
member of 152 other funds in the Dreyfus Family of Funds. From
November 1995 to January 1997, he was a Director of Access Capital
Strategic Community Investment Fund, Inc. - Institutional Investment
Portfolio and Bank Portfolio. For more than five years prior to
January 1995, he was President and a director of Dreyfus and Executive
Vice President and a director of Dreyfus Service Corporation, a wholly-
owned subsidiary of Dreyfus. From August 1994 to December 31, 1994, he
was a director of Mellon Bank Corporation. Age: 53 years old.
Address: 200 Park Avenue, New York, New York 10166.
o+JAMES M. FITZGIBBONS. Trustee of the Trust; Chairman, Howes Leather
Company, Inc.; Director, Fiduciary Trust Company. Chairman, CEO and
Director, Fieldcrest-Cannon Inc.; Director, Lumber Mutual Insurance
Company; Director, Barrett Resources, Inc.; from November 1995 to
January 1997, Director, Access Capital Strategic Community Investment
Fund, Inc. - Bank Portfolio. Age: 61 years old. Address: 40 Norfolk
Road, Brookline, Massachusetts 02167.
o*J. TOMLINSON FORT. Trustee o the Trust; Partner, Reed, Smith, Shaw &
McClay (law firm). From November 1995 to January 1997, Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio. Age: 68 years old. Address: 204 Woodcock Drive,
Pittsburgh, Pennsylvania 15215.
o+ARTHUR L. GOESCHEL. Trustee of the Trust; Chairman of the Board and
Director, Rexene Corporation; Director, Calgon Carbon Corporation;
Director, Cerex Corporation; Director, National Picture Frame
Corporation; Chairman of the Board and Director, Tetra Corporation 1991-
1993; Director, Medalist Corporation 1992-1993; from November 1995 to
January 1997, Director, Access Capital Strategic Community Investment
Fund, Inc. - Institutional Investment Portfolio. Age: 74 years old.
Address: Way Hollow Road and Woodland Road, Sewickley, Pennsylvania
15143.
o+KENNETH A. HIMMEL. Trustee of the Trust; Director, The Boston Company,
Inc. ("TBC") and Boston Safe Deposit and Trust Company; President and
Chief Executive Officer, Himmel & Co., Inc.; Vice Chairman, Sutton
Place Gourmet, Inc.; Managing partner, Franklin Federal Partners from
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Bank Portfolio. Age: 49 years old.
Address: Himmel and Company, Inc., 399 Boylston St., 11th Floor,
Boston, Massachusetts 02116.
o*ARCH S. JEFFERY. Trustee of the Trust; Financial Consultant. From
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 78 years old. Address: 1817 Foxcroft Lane, Unit 306, Allison
Park, Pennsylvania 15101.
o+STEPHEN J. LOCKWOOD. Trustee of the Trust; President and CEO, LDG
Management Company Inc.; CEO, LDG Reinsurance Underwriters, SRRF
Management Inc. and Medical Reinsurance Underwriters Inc.; from
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 48 years old. Address: 401 Edgewater Place, Wakefield,
Massachusetts 01880.
o+JOHN J. SCIULLO. Trustee of the Trust; Dean Emeritus and Professor of Law,
Duquesne University Law School; Director, Urban Redevelopment Authority
of Pittsburgh; Member of Advisory Committee on Decendents' Estate Laws
of Pennsylvania. From November 1995 to January 1997, Director, Access
Capital Strategic Community Investment Fund, Inc. - Institutional
Investment Portfolio. Age: 64 years old. Address: 321 Gross Street,
Pittsburgh, Pennsylvania 15224
o+ROSLYN M. WATSON. Trustee of the Trust; Principal, Watson Ventures;
Director, American Express Centurion Bank; Director, Harvard/Pilgrim
Community Health Plan, Inc.; Director, Massachusetts Electric Company;
Director, The Hymans Foundation, Inc., prior to February, 1993; Real
Estate Development Project Manager and Vice President, The Gunwyn
Company. From November 1995 to January 1997, Director, Access Capital
Strategic Community Investment Fund, Inc. - Bank Portfolio. Age: 46
years old. Address: 25 Braddock Park, Boston, Massachusetts 02116-
5816.
#MARIE E. CONNOLLY. President and Treasurer of the Trust, The
Dreyfus/Laurel Funds Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since September 1994); Vice President of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (March 1994 to September 1994); President, Funds Distributor,
Inc. (since 1992); Treasurer, Funds Distributor, Inc. (July 1993 to
April 1994); COO, Funds Distributor, Inc. (since April 1994); Director,
Funds Distributor, Inc. (since July 1992); President, COO and Director,
Premier Mutual Fund Services, Inc. (since April 1994); Senior Vice
President and Director of Financial Administration, The Boston Company
Advisors, Inc. (December 1988 to May 1993). Age: 38 years old. Address:
60 State Street, Boston, Massachusetts 02109.
#DOUGLAS C. CONROY, Vice President and Assistant Secretary of the Trust, The
Dreyfus/Laurel Funds Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Supervisor of Treasury Services and
Administration of Funds Distributor, Inc. From April 1993 to January
1995, Mr. Conroy was a Senior Fund Accountant for Investors Bank &
Trust Company. From December 1991 to March 1993, Mr. Conroy was
employed as a fund accountant at TBC. Age: 27 years old. Address: 60
State Street, Boston, Massachusetts 02109.
#RICHARD W. INGRAM, Vice President and Assistant Treasurer of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Senior Vice President and Director of Client
Services and Treasury Operations of Funds Distributor, Inc. From March
1994 to November 1995, Mr. Ingram was Vice President and Division
Manager for First Data Investor Services Group. From 1989 to 1994, Mr.
Ingram was Vice President, Assistant Treasurer and Tax Director -
Mutual Funds of TBC. Age: 40 years old. Address: 60 State Street,
Boston, Massachusetts 02109.
#MARK A. KARPE, Vice President and Assistant Secretary of the Trust, The
Dreyfus/Laurel Funds Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since October 1996). Senior Paralegal of Premier Mutual Fund
Services, Inc. From August 1993 to May 1996, he attended Hofstra
University School of Law. Prior to August 1993, he was employed as an
Associate Examiner at the National Association of Securities Dealers,
Inc. Age: 27 years old. Address: 200 Park Avenue, New York, New York
10166.
#ELIZABETH KEELEY. Vice President and Assistant Secretary of the Trust, The
Dreyfus/Laurel Funds Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since January 1996); Counsel, Premier Mutual Fund Services, Inc.
Prior to September 1995, she was enrolled at the Fordham University
School of Law and received her J.D. in May 1995. Prior to September
1992, she was an Assistant at the National Association for Public
Interest Law. Age: 27 years old. Address: 200 Park Avenue, New York,
New York 10166.
#MARY A. NELSON, Vice President and Assistant Treasurer of the Trust, The
Dreyfus/Laurel Funds Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since July 1996). Vice President and Manager of Treasury
Services and Administration of Funds Distributor, Inc. From September
1989 to July 1994, Ms. Nelson was an Assistant Vice President and
Client Manager for TBC. Age: 32 years old. Address: 60 State Street,
Boston, Massachusetts 02109.
#JOHN E. PELLETIER. Vice President and Secretary of the Trust, The
Dreyfus/Laurel Funds Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since September 1994); Senior Vice President, General Counsel
and Secretary, Funds Distributor, Inc. (since April 1994); Senior Vice
President, General Counsel and Secretary, Premier Mutual Fund Services,
Inc. (since August 1994); Counsel, The Boston Company Advisors, Inc.
(February 1992 to March 1994); Associate, Ropes & Gray (August 1990 to
February 1992). Age: 31 years old. Address: 60 State Street, Boston,
Massachusetts 02109.
#MICHAEL S. PETRUCELLI. Vice President and Treasurer of the Trust, The
Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free Municipal
Funds (since January 1997); Director of Strategic Client Initiatives
for Premier Mutual Fund Services, Inc. From December, 1989 through
November, 1996 he was employed with GE Investment Services where he
held various financial, business development and compliance positions.
He also served as Treasurer of the GE Funds and as Director of GE
Investment Services. Age: 35 years old. Address: 200 Park Avenue, New
York, New York 10166.
#JOSEPH F. TOWER, III. Vice President and Assistant Treasurer of the Trust,
The Dreyfus/Laurel Funds, Inc. and The Dreyfus/Laurel Tax-Free
Municipal Funds (since January 1996); Senior Vice President, Treasurer
and Chief Financial Officer of Premier Mutual Fund Services, Inc. From
1988 to August 1994, he was employed by TBC where he held various
management positions in the Corporate Finance and Treasury areas. Age:
33 years old. Address: 60 State Street, Boston, Massachusetts 02109.
________________________________
* "Interested person" of the Trust, as defined in the 1940 Act.
o Member of the Audit Committee.
+ Member of the Nominating Committee.
# Officer also serves as an officer for other investment companies
advised by Dreyfus.
The officers and Trustees of the Trust as a group owned beneficially less
than 1% of the total shares of the Fund outstanding as of March 31, 1997.
No officer or employee of the Distributor (or of any parent, subsidiary
or affiliate thereof) receives any compensation from the Trust for serving
as an officer or Trustee of the Trust. In addition, no officer or employee
of Dreyfus (or of any parent, subsidiary or affiliate thereof) serves as an
officer or Trustee of the Trust. The Dreyfus/Laurel Funds pay each
Trustee/Director who is not an "interested person" of the Trust (as defined
in the 1940 Act), $27,000 per annum (and an additional $25,000 for the
Chairman of the Board of Directors/Trustees of the Dreyfus/Laurel Funds).
In addition, the Dreyfus/Laurel Funds pay each Trustee/Director who is not
an "interested person" of the Trust (as defined in the 1940 Act), $1,000 per
joint Dreyfus/Laurel Funds Board meeting attended, plus $750 per joint
Dreyfus/Laurel Funds Audit Committee meeting attended, and reimburse each
Trustee/Director who is not an "interested person" of the Trust (as defined
in the 1940 act) for travel and out-of-pocket expenses.
For the fiscal year ended December 31, 1996, the aggregate amount of fees
and expenses received by each current Trustee of the Trust from the Trust
and all other funds in The Dreyfus Family of Funds for which such person is
a Board member were as follows:
Total
Compensation
From the Trust
Aggregate and Fund Complex
Compensation Paid to Board
Name of Board Member From Trust# Member****
Ruth Marie Adams $10,833.33 $ 31,500
Francis P. Brennan* 19,098 70,000
James M. Fitzgibbons 10,833.33 31,500
Joseph S. DiMartino** none 517,075***
J. Tomlinson Fort** none none
Arthur L. Goeschel 11,500 32,500
Kenneth A. Himmel 10,250 30,750
Arch S. Jeffery** none none
Stephen J. Lockwood 10,833.33 31,500
John J. Sciullo 11,500 32,500
Roslyn M. Watson 11,166.67 32,500
# Amounts required to be paid by the Trust directly to the non-interested
Trustees, that would be applied to offset a portion of the management fee
payable to Dreyfus, are in fact paid directly by Dreyfus to the non-
interested Trustees. Amount does not include reimbursed expenses for
attending Board meetings, which amounted to $16,473.54 for the Trust.
* Compensation of Francis P. Brennan includes $25,000 paid by the
Dreyfus/Laurel Funds to be the Chairman of the Board. Effective May 1,
1996, the retainer was reduced from $75,000 to $25,000 annually.
** For the fiscal year ended December 31, 1996, Joseph S. DiMartino, J.
Tomlinson Fort and Arch S. Jeffery were paid directly by Dreyfus for
serving as Board members of the Trust and the funds in the Dreyfus/Laurel
Funds. For the fiscal year ended December 31, 1996, the aggregate amount
of fees and expenses received by Joseph S. DiMartino, J. Tomlinson Fort and
Arch S. Jeffery from Dreyfus for serving as a Board member of the Trust
were $11,500 $11,500 and $11,500, respectively, and for serving as a Board
member of all funds in the Dreyfus/Laurel Funds (including the Trust) were
$32,500, $32,500 and $32,500, respectively. In addition, Dreyfus
reimbursed Messrs. DiMartino, Fort and Jeffery a total of $4,895.49 for
expenses attributable to the Trust's Board meetings which is not included
in the $16,473.54 amount noted above).
*** Amount paid to Joseph S. DiMartino from the funds in the Fund Complex for
the calendar year ended December 31, 1996.
**** The Dreyfus Family of Funds consists of 152 mutual funds.
MANAGEMENT ARRANGEMENTS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
Management Agreement. Dreyfus serves as the investment manager for the
Fund pursuant to an Investment Management Agreement with the Trust dated
April 4, 1994 (the "Management Agreement"), transferred to Dreyfus as of
October 17, 1994. Pursuant to the Management Agreement, Dreyfus provides, or
arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. As investment manager, Dreyfus manages the Fund by making investment
decisions based on the Fund's investment objective, policies and
restrictions. The Management Agreement is subject to review and approval at
least annually by the Board of Trustees.
The Management Agreement will continue from year to year provided that a
majority of the Trustees who are not interested persons of the Trust and
either a majority of all Trustees or a majority of the shareholders of the
Fund approve its continuance. The Trust may terminate the Agreement,
without prior notice to Dreyfus, upon the vote of a majority of the Board
of, Trustees or upon the vote of a majority of the outstanding voting
securities of the Fund on 60 days' written notice to Dreyfus. Dreyfus may
terminate the Management Agreement upon 60 days' written notice to the
Trust. The Management Agreement will terminate immediately and
automatically upon its assignment.
The following persons are officers and/or directors of Dreyfus: W. Keith
Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman-Distribution and a director; William T. Sandalls, Jr.,
Senior Vice President and Chief Financial Officer; Mark N. Jacobs, Vice
President, General Counsel and Secretary; Patrice M. Kozlowski, Vice
President-Corporate Communications; Mary Beth Leibig, Vice President-Human
Resources; Jeffrey N. Nachman, Vice President-Mutual Fund Accounting; Andrew
S. Wasser, Vice President-Information Systems; Elvira Oslapas, Assistant
Secretary; and Mandell L. Berman, Burton C. Borgelt and Frank V. Cahouet,
directors.
As compensation for Dreyfus' services, the Fund pays a fee, based on its
total average daily net assets, that is computed daily and paid monthly.
The rates at which such fees are paid are described in the Prospectus.
Dreyfus may waive all or a portion of its fees payable by the Fund from time
to time.
The following table shows the fees paid by the Fund to Dreyfus (or its
predecessors as the prior investment advisors), including any fee waiver
during the 1994, 1995 and 1996 fiscal years.
1996 1995 1994
Fee Fee Fee
Dreyfus Premier Managed
Income Fund $653,857 $632,276 $630,564(1)
_______________________
(1)$7,023 and $5,389 were voluntarily waived and reimbursed respectively by
The Boston Company Advisors, Inc., which served as investment manager to
the Fund prior to April 14, 1994.
PURCHASE OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Premier Family of
Funds, for funds in the Dreyfus Family of Funds and for certain other
investment companies.
For the fiscal year ended December 31, 1995, the Distributor retained
$2,566 from sales loads on the Fund's Class A shares. For the fiscal year
ended December 31, 1995, the Distributor retained $294 from the contingent
deferred sales charge ("CDSC") on Class B shares for the Fund. For the same
period, the Distributor retained no fees from the CDSC on Class C shares for
the Fund. For the fiscal year ended December 31, 1996, the Distributor
retained $32,647 from sales loads on the Fund's Class A shares. For the
same period, the Distributor retained $26,667 from the CDSC on Class B
shares. For the same period, the Distributor retained $1,219 from the CDSC
on Class C shares.
Sales Loads--Class A. The scale of sales loads applies to purchases of
Class A shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children, or a trustee or other fiduciary
purchasing securities for a single trust estate or a single fiduciary
account (including a pension, profit-sharing or other employee benefit trust
created pursuant to a plan qualified under Section 401 of the Internal
Revenue Code of 1986, as amended ("Code") although more than one beneficiary
is involved; or a group of accounts established by or on behalf of the
employees of an employer or affiliated employers pursuant to an employee
benefit plan or other program (including accounts established pursuant to
Sections 403(b), 408(k), and 457 of the Code); or an organized group which
has been in existence for more than six months, provided that it is not
organized for the purpose of buying redeemable securities of a registered
investment company and provided that the purchases are made through a
central administration or a single dealer, or by other means which result in
economy of sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Fund's Class A shares. The example assumes a purchase of Class
A shares aggregating less than $50,000 subject to the schedule of sales
charges set forth in the Fund's of the Fund Prospectus at a price based upon
the net asset value of the Fund's Class A shares at the close of business on
December 31, 1996.
Net Asset Value per Share $10.73
Per Share Sales Charge - 4.5%
of offering price (4.7% of
net asset value per share) $0.51
Per Share Offering Price to
the Public $11.24
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made at any time. Purchase orders received by 4:00 P.M., New York
time, on any business day that Dreyfus Transfer, Inc., the Fund's transfer
and dividend disbursing agent (the "Transfer Agent"), and the New York Stock
Exchange ("NYSE") are open for business will be credited to the
shareholder's Fund account on the next bank business day following such
purchase order. Purchase orders made after 4:00 P.M., New York time, on any
business day the Transfer Agent and the NYSE are open for business, or
orders made on Saturday, Sunday or any Fund holiday (e.g., when the NYSE is
not open for business), will be credited to the shareholder's Fund account
on the second bank business day following such purchase order.
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
In-Kind Purchases. If the following conditions are satisfied, the Fund
may at its discretion, permit the purchase of shares through an "in-kind"
exchange of securities. Any securities exchanged must meet the investment
objective, policies and limitations of the Fund, must have a readily
ascertainable market value, must be liquid and must not be subject to
restrictions on resale. The market value of any securities exchanged, plus
any cash, must be at least equal to $25,000. Shares purchased in exchange
for securities generally cannot be redeemed for fifteen days following the
exchange in order to allow time for the transfer to settle.
The basis for the exchange will depend upon the relative NAV of the
shares purchased and securities exchanged. Securities accepted by the Fund
will be valued in the same manner as the Fund values its assets. Any
interest earned on the securities following their delivery to the Fund and
prior to the exchange will be considered in valuing the securities. All
interest, dividends, subscription or other rights attached to the securities
become the property of the Fund, along with the securities. For further
information about "in-kind" purchases, call 1-800-645-6561.
DISTRIBUTION AND SERVICE PLANS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plans
(Class A Plan and Class B and C Plans)."
Distribution Plan
The Securities and Exchange Commission ("SEC") has adopted Rule 12b-1
under the 1940 Act ("Rule") regulating the circumstances under which
investment companies such as the Trust may, directly or indirectly, bear the
expenses of distributing their shares. The Rule defines distribution
expenses to include expenditures for "any activity which is primarily
intended to result in the sale of fund shares." The Rule, among other
things, provides that an investment company may bear such expenses only
pursuant to a plan adopted in accordance with the Rule.
Distribution Plan--Class A Shares. The Trust has adopted a Distribution
Plan pursuant to the Rule with respect to the Class A shares of the Fund
("Class A Plan"), whereby Class A shares of the Fund may spend annually up
to 0.25% of the average of its net assets for costs and expenses incurred in
connection with the distribution of, and shareholder servicing with respect
to, Class A shares.
The Class A Plan provides that a report of the amounts expended under the
Class A Plan, and the purposes for which such expenditures were incurred,
must be made to the Trust's Trustees for their review at least quarterly.
In addition, the Class A Plan provides that it may not be amended to
increase materially the costs which the Fund may bear for distribution
pursuant to the Class A Plan without approval of the Fund's shareholders,
and that other material amendments of the Class A Plan must be approved by
the vote of a majority of the Trustees and of the Trustees who are not
"interested persons" of the Trust (as defined in the 1940 Act) and who do
not have any direct or indirect financial interest in the operation of the
Class A Plan, cast in person at a meeting called for the purpose of
considering such amendments. The Class A Plan is subject to annual approval
by the entire Board of Trustees and by the Trustees who are neither
interested persons nor have any direct or indirect financial interest in the
operation of the Class A Plan, by vote cast in person at a meeting called
for the purpose of voting on the Class A Plan. The Plan was so approved at
a meeting of the Board of Trustees held on January 31, 1997. The Class A
Plan is terminable, as to the Fund's Class A shares, at any time by vote of
a majority of the Trustees who are not interested persons and have no direct
or indirect financial interest in the operation of the Class A Plan or by
vote of the holders of a majority of the outstanding shares of such class of
the Fund.
Distribution and Service Plans -- Class B and C Shares. In addition to
the above described current Class A Plan for Class A shares, the Board of
Trustees has adopted a Service Plan (the "Service Plan") under the Rule for
Class B and Class C shares, pursuant to which the Fund pays the Distributor
and Dreyfus Service Corporation for the provision of certain services to the
holders of Class B and Class C shares. The Trust's Board of Trustees has
also adopted a Distribution Plan pursuant to the Rule with respect to
Class B and Class C shares (the "Distribution Plan"). The Trust's Board of
Trustees believes that there is a reasonable likelihood that the
Distribution and Service Plans (the "Plans") will benefit the Fund and the
holders of Class B and Class C shares.
For the fiscal year ended December 31, 1996, the distribution and service
fees paid by the Fund were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Class A Class B Class C Class R
Dreyfus Premier Managed Distribution Plan Fee $196,636 $26,667 $1,219 N/A
Income Fund Service Plan Fee N/A $ 8,889 $ 406 N/A
</TABLE>
A quarterly report of the amounts expended under each Plan, and the
purposes for which such expenditures were incurred, must be made to the
Trustees for their review. In addition, each Plan provides that it may not
be amended to increase materially the cost which holders of Class B or C
shares may bear pursuant to the Plan without the approval of the holders of
such Classes and that other material amendments of the Plan must be approved
by the Board of Trustees and by the Trustees who are not interested persons
of the Fund and have no direct or indirect financial interest in the
operation of the Plan or in any agreements entered into in connection with
the Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. Each Plan is subject to annual approval by
such vote of the Trustees cast in person at a meeting called for the purpose
of voting on the Plan. Each Plan was last approved by the Trustees at a
meeting held on January 31, 1997. Each Plan may be terminated at any time
by vote of a majority of the Trustees who are not interested persons and
have no direct or indirect financial interest in the operation of the Plan
or in any agreements entered into in connection with the Plan or by vote of
the holders of a majority of Class B and C shares.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Fund
Shares."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also 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 NYSE Medallion
Signature Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees must be
signed by an authorized signatory of the guarantor and "Signature-
Guaranteed" must appear with the signature. The Transfer Agent may request
additional documentation from corporations, executors, administrators,
trustees or guardians, and may accept other suitable verification
arrangements from foreign investors, such as consular verification. For
more information with respect to signature-guarantees, please call one of
the telephone numbers listed on the cover.
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption will
be effected as a TeleTransfer transaction through the Automated Clearing
House ("ACH") system unless more prompt transmittal specifically is
requested. Redemption proceeds will be on deposit in the investor's account
at an ACH member bank ordinarily two business days after receipt of the
redemption request. See "Purchase of Fund Shares--TeleTransfer Privilege."
Redemption Commitment. The Fund has committed itself to pay in cash all
redemption requests by any shareholder of record of the Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value
of the Fund's net assets at the beginning of such period. Such commitment
is irrevocable without the prior approval of the SEC. In the case of
requests for redemption in excess of such amount, the Board of Trustees
reserves the right to make payments in whole or in part in securities or
other assets in case of an emergency or any time a cash distribution would
impair the liquidity of the Fund to the detriment of the existing
shareholders. In this event, the securities would be valued in the same
manner as the Fund's portfolio is valued. If the recipient sold such
securities, brokerage charges might be incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the NYSE is closed
(other than customary weekend and holiday closings), (b) when trading in the
markets the Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the SEC so that disposal of the Fund's investments
or determination of its net asset value is not reasonably practicable, or
(c) for such other periods as the SEC by order may permit to protect the
Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Fund Exchanges. Shares of any Class of the Fund may be exchanged for
shares of the same or a comparable class of certain other funds advised or
administered by Dreyfus. Shares of the same or comparable class of such
funds purchased by exchange will be purchased on the basis of relative net
asset value per share as follows:
A. Exchanges into shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds acquired
by a previous exchange from shares purchased with a sales
load and additional shares acquired through reinvestment of
dividends or other distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.
E. Shares of funds subject to a CDSC that are exchanged for shares
of another fund will be subject to the higher applicable CDSC of
the two funds, and for purposes of calculating CDSC rates and
conversion periods, if any, will be deemed to have been held since
the date the shares being exchanged were initially purchased.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To request an exchange, an investor, or an investor's Agent acting on the
investor's behalf, must give exchange instructions to the Transfer Agent in
writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this Privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer Agent
to act on telephonic instructions (including over The Dreyfus Touchr
Automated Telephone System) from any person representing himself or herself
to be the investor, or a representative of the investor's Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange.
Exchanges of Class R shares held by a Retirement Plan may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. For Dreyfus-
sponsored Keogh Plans, IRAs and SEP-IRAs with only one participant, the
minimum initial investment is $750. To exchange shares held in Corporate
Plans, 403(b)(7) Plans and IRAs set up under a Simplified Employee Pension
Plan ("SEP-IRAs") with more than one participant, the minimum initial
investment is $100 if the plan has at least $2,500 invested among the funds
in the Dreyfus Premier Family of Funds or the Dreyfus Family of Funds. To
exchange shares held in a personal retirement plan account, the shares
exchanged must have a current value of at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an investor
to purchase, in exchange for shares of the Fund, shares of the same Class of
another fund in the Dreyfus Premier Family of Funds or the Dreyfus Family of
Funds. This privilege is available only for existing accounts. With
respect to Class R shares held by a Retirement Plan, exchanges may be made
only between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund. Shares will be
exchanged on the basis of relative net asset value as described above under
"Fund Exchanges." Enrollment in or modification or cancellation of this
privilege is effective three business days following notification by the
investor. An investor will be notified if the investor's account falls
below the amount designated to be exchanged under this privilege. In this
case, an investor's account will fall to zero unless additional investments
are made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are eligible
for this privilege. Exchanges of IRA shares may be made between IRA
accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
Fund Exchanges and Auto-Exchange Privilege are available to shareholders
resident in any state in which shares of the fund being acquired may legally
be sold. Shares may be exchanged only between accounts having identical
names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-554-4611. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchange service or Auto-
Exchange Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal. The Automatic Withdrawal Plan permits an investor
with a $5,000 minimum account to request withdrawal of a specified dollar
amount (minimum of $50) on either a monthly or quarterly basis. Withdrawal
payments are the proceeds from sales of Fund shares, not the yield on the
shares. If withdrawal payments exceed reinvested dividends and distribu
tions, the investor's shares will be reduced and eventually may be depleted.
An Automatic Withdrawal Plan may be established by completing the
appropriate application available from the Distributor. Automatic
Withdrawal may be terminated at any time by the investor, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
Dividend Sweep. Dividend Sweep allows investors to invest automatically
their dividends or dividends and capital gain distributions, if any, from
the Fund in shares of the same Class of another fund in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds of which the investor is a
shareholder. Shares of the same Class of other funds purchased pursuant to
this privilege will be purchased on the basis of relative net asset value
per share as follows:
A. Dividends and other distributions paid by a fund may be
invested without imposition of a sales load in shares of other
funds that are offered without a sales load.
B. Dividends and other distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold
with a sales load, and the applicable sales load will be deducted.
C. Dividends and other distributions paid by a fund which charges
a sales load may be invested in shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds
the maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and other distributions paid by a fund may be
invested in shares of other funds that impose a CDSC and the
applicable CDSC, if any, will be imposed upon redemption of such
shares.
Corporate Pension/Profit-Sharing and Retirement Plans. The Fund makes
available to corporations a variety of prototype pension and profit-sharing
plans including a 401(k) Salary Reduction Plan. In addition, the Fund makes
available Keogh Plans, IRAs, including SEP-IRAs and IRA "Rollover Accounts,"
and 403(b)(7) Plans. Plan support services also are available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including an SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Purchases for these plans may
not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, is
$1,000 with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA may also open a non-
working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details on eligibility,
service fees and tax implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or which are not valued by a
pricing service approved by the Board of Trustees, are valued at fair value
as determined in good faith by the Board of Trustees. The Board of Trustees
will review the method of valuation on a current basis. In making their
good faith valuation of restricted securities, the Trustees generally will
take the following factors into consideration: restricted securities which
are securities of the same class of securities for which a public market
exists usually will be valued at market value less the same percentage
discount at which purchased. This discount will be revised periodically by
the Board of Trustees if the Trustees believe that it no longer reflects the
value of the restricted securities. Restricted securities not of the same
class as securities for which a public market exists usually will be valued
initially at cost. Any subsequent adjustment from cost will be based upon
considerations deemed relevant by the Board of Trustees.
New York Stock Exchange Closings. The holidays (as observed) on which
the NYSE is closed currently are: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Other
Distributions and Taxes."
The term "regulated investment company" does not imply the supervision of
management or investment practices or policies by any government agency.
To qualify for treatment as a regulated investment company ("RIC") under
the Code, the Fund--which is treated as a separate corporation for federal
tax purposes-- (1) must distribute to its shareholders each taxable year at
least 90% of its investment company taxable income (generally consisting of
net investment income, net short-term capital gains and net gains from
certain foreign currency transactions) ("Distribution Requirement"), (2)
must derive at least 90% of its annual gross income from specified sources
("Income Requirement"), (3) must derive less than 30% of its annual gross
income from gain on the sale or disposition of any of the following that are
held for less than three months -- (i) securities, (ii) non-foreign-currency
options and futures and (iii) foreign currencies (or foreign currency
options, futures and forward contracts) that are not directly related to the
Fund's principal business of investing in securities (or options and futures
with respect thereto) ("Short-Short Limitation") -- and (4) must meet
certain asset diversification and other requirements. Accordingly, the Fund
may be restricted in the selling of securities held for less than three
months.
Any dividend or other distribution paid shortly after an investor's
purchase of shares may have the effect of reducing the net asset value of
the shares below the cost of his or her investment. Such a dividend or
other distribution would be a return on investment in an economic sense,
although taxable as stated in the Fund's Prospectus. In addition, if a
shareholder sells shares of the Fund held for six months or less and has
received a capital gain distribution with respect to those shares, any loss
incurred on the sale of those shares will be treated as a long-term capital
loss to the extent of the capital gain distribution received.
Dividends and other distributions declared by the Fund in October,
November or December of any year and payable to shareholders of record on a
date in any of those months are deemed to have been paid by the Fund and
received by the shareholders on December 31 of that year if the
distributions are paid by the Fund during the following January.
Accordingly, those distributions will be taxed to shareholders for the year
in which that December 31 falls.
A portion of the dividends paid by the Fund, whether received in cash or
reinvested in additional Fund shares, may be eligible for the dividends-
received deduction allowed to corporations. The eligible portion may not
exceed the aggregate dividends received by the Fund from U.S. corporations.
However, dividends received by a corporate shareholder and deducted by it
pursuant to the dividends-received deduction are subject indirectly to the
alternative minimum tax.
Foreign Taxes. Dividends and interest received by the Fund may be
subject to income, withholding or other taxes imposed by foreign countries
and U.S. possessions that would reduce the yield on its securities. Tax
conventions between certain countries and the United States may reduce or
eliminate these foreign taxes, however, and many foreign countries do not
impose taxes on capital gains in respect of investments by foreign
investors. If more than 50% of the value of the Fund's total assets at the
close of its taxable year consists of securities of foreign corporations, it
will be eligible to, and may, file an election ("Election") with the
Internal Revenue Service that will enable its shareholders, in effect, to
receive the benefit of the foreign tax credit with respect to any foreign or
U.S. possessions' income taxes paid by it. Pursuant to the election, the
Fund would treat those taxes as dividends paid to its shareholders and each
shareholder would be required to (1) include in gross income, and treat as
paid by him or her, his or her proportionate share of those taxes, (2) treat
his or her share of those taxes and of any dividend paid by the Fund that
represents income from foreign or U.S. possession sources as his or her own
icome from those sources and (3) either deduct the taxes deemed paid by him
or her in computing his or her taxable income or, alternatively, use the
foregoing information in calculating the foreign tax credit against his or
her federal income tax. No deduction for foreign taxes may be claimed by a
shareholder who does not itemize deductions. Generally, a credit for
foreign taxes may not exceed the shareholder's federal income tax
attributable to his total foreign source taxable income. The Fund will
report to its shareholders shortly after each taxable year their respective
shares of the income from sources within, and taxes paid to, foreign
countries and U.S. possessions if it makes the Election.
Foreign Currency, Futures, Forward and Hedging Transactions. Gains from
the sale or other disposition of foreign currencies (except certain gains
that may be excluded by future regulations), and gains from options, futures
and forward contracts derived by the Fund with respect to its business of
investing in securities or foreign currencies, will qualify as permissible
income under the Income Requirement. However, income from the disposition
of options and futures contracts (other than those on foreign currencies)
will be subject to the Short-Short Limitation if they are held for less than
three months. Income from the disposition of foreign currencies, and
options, futures and forward contracts thereon, that are not directly
related to the Fund's principal business of investing in securities (or
options and futures with respect to securities) also will be subject to the
Short-Short Limitation if they are held for less than three months.
If the Fund satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease
in value (whether realized or not) of the offsetting hedging position during
the period of the hedge for purposes of determining whether the Fund
satisfies the Short-Short Limitation. Thus, only the net gain (if any) from
the designated hedge will be included in gross income for purposes of that
limitation. The Fund will consider whether it should seek to qualify for
this treatment for its hedging transactions. To the extent the Fund does
not so qualify, it may be forced to defer the closing out of certain
options, futures, forward contracts and foreign currency positions beyond
the time when it otherwise would be advantageous to do so, in order for the
Fund to qualify as a RIC.
Ordinarily, gains and losses realized from portfolio transactions will be
treated as capital gain and loss. However, a portion of the gains or losses
from the disposition of foreign currencies and certain foreign currency
denominated instruments (including debt instruments and financial forward,
futures and option contracts) may be treated as ordinary income or loss
under Section 988 of the Code. In addition, all or a portion of any gain
realized from the sale or other disposition of certain market discount bonds
will be treated as ordinary income. Moreover, all or a portion of the gain
realized from engaging in "conversion transactions" that would be treated as
capital gain may be treated as income under Section 1258 of the Code.
"Conversion transactions" are defined to include certain forward, futures,
option and straddle transactions, transactions marketed or sold as producing
capital gains and other transactions described in Treasury regulations to be
issued in the future.
Under Section 1256 of the Code, any gain or loss realized by the Fund
from certain futures, forward contracts and options transactions will be
treated as 60% long-term capital gain or loss and 40% short-term capital
gain or loss. Gain or loss will arise upon exercise or lapse of such
contracts and options as well as from closing transactions. In addition,
any such contracts or options remaining unexercised at the end of the Fund's
taxable year will be treated as sold for their then fair market value (a
process known as "marking to market"), resulting in additional gain or loss
to the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving certain contracts or
options may constitute "straddles," which are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
straddles is governed by Sections 1092 and to the extent noted above, 1258
of the Code, which in certain circumstances override or modify Sections 1256
and 988. As such, all or a portion of any short-term or long-term capital
gain from certain straddle transactions may be recharacterized as ordinary
income. If the Fund were treated as entering into straddles by reason of
its engaging in certain forward contracts or options transactions, such
straddles would be characterized as "mixed straddles" if the forward
contracts or options transactions comprising a part of such straddles were
governed by Section 1256. The Fund may make one or more elections with
respect to mixed straddles; depending on which election is made, if any,
the results to the Fund may differ. If no election is made, then to the
extent the straddle and conversion transactions rules apply to positions
established by the Fund, losses realized by the Fund will be deferred to the
extent of unrealized gain in the offsetting position. Moreover, as a result
of the straddle rules, short-term capital loss on straddle positions may be
recharacterized as long-term capital loss, and long-term capital gains may
be treated as short-term capital gains or ordinary income.
Investment by the Fund in securities issued or acquired at a discount
(for example, zero coupon securities) could, under special tax rules, affect
the amount and timing of distributions to shareholders by causing the Fund
to recognize income prior to the receipt of cash payments. For example, the
Fund could be required to take into gross income annually a portion of the
discount (or deemed discount) at which the securities were issued could need
and to distribute such income to satisfy the Distribution Requirement and to
avoid the excise tax (the "Excise Tax") referred in the Fund's Prospectus
under "Dividends, Other Distributions and Taxes." In such case, the Fund
may have to dispose of securities it might otherwise have continued to hold
in order to generate cash to satisfy these requirements.
If the Fund invests in an entity that is classified as a "passive foreign
investment company" ("PFIC") for federal income tax purposes, the operation
of certain provisions of the Code applying to PFICs could result in the
imposition of certain federal income taxes on the Fund. In addition, gain
realized from the sale or other disposition of PFIC securities may be
treated as ordinary income under Section 1291 of the Code.
State and Local Taxes. Depending upon the extent of the Fund's activities
in states and localities in which it is deemed to be conducting business,
the Fund may be subject to the tax laws thereof. Shareholders are advised
to consult their tax advisers concerning the application of state and local
taxes.
Foreign Shareholders - U.S. Federal Income Taxation. U.S. federal income
taxation of a shareholder who, as to the United States, is a non-resident
alien individual, a foreign trust or estate, a foreign corporation or a
foreign partnership (a "foreign shareholder") depends on whether the income
from the Fund is "effectively connected" with a U.S. trade or business
carried on by the shareholder, as discussed generally below. Special U.S.
federal income tax rules that differ from those described below may apply to
certain foreign persons who invest in the Fund, such as a foreign
shareholder entitled to claim the benefits of an applicable tax treaty.
Foreign shareholders are advised to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Fund.
Foreign Shareholders - Income Not Effectively Connected. Dividends
distributed to a foreign shareholder whose ownership of Fund shares is not
effectively connected with U.S. trade or business carried on by the foreign
shareholder generally will be subject to a U.S. federal withholding tax of
30% (or lower treaty rate). Capital gains realized by foreign shareholders
on the sale of Fund shares and distributions to them of net capital gain the
excess of long-term capital gain generally will not be subject to U.S.
federal income tax unless the foreign shareholder is a non-resident alien
individual and is physically present in the United States for more than 182
days during the taxable year. In the case of certain foreign shareholders,
the Fund may be required to withhold U.S. Federal income tax at a rate of
31% of capital gain distributions and of the gross proceeds from a
redemption of Fund shares unless the shareholder furnishes the Fund with a
certificate regarding the shareholder's foreign status.
Foreign Shareholders - Effectively Connected Income. If a foreign
shareholder's ownership of Fund shares is effectively connected with a U.S.
trade or business carried on by the foreign shareholder, then all
distributions to that shareholder and any gains realized by that shareholder
on the disposition of the Fund shares will be subject to U.S. federal income
tax at the graduated rates applicable to U.S. citizens and domestic
corporations, as the case may be. Foreign shareholders also may be subject
to the branch profits tax.
Foreign Shareholders - Estate Tax. Foreign individuals generally are
subject to U.S. federal estate tax on their U.S. situs property, such as
shares of the Fund, that they own at the time of their death. Certain
credits against that tax and relief under applicable tax treaties may be
available.
PORTFOLIO TRANSACTIONS
All portfolio transactions of the Fund are placed on behalf of the Fund
by Dreyfus. Debt securities purchased and sold by the Fund are generally
traded on a net basis (i.e., without commission) through dealers acting for
their own account and not as brokers, or otherwise involve transactions
directly with the issuer of the instrument. This means that a dealer (the
securities firm or bank dealing with the Fund) makes a market for securities
by offering to buy at one price and sell at a slightly higher price. The
difference between the prices is known as a spread. Other portfolio
transactions may be executed through brokers acting as agent. The Fund will
pay a spread or commissions in connection with such transactions. Dreyfus
uses its best efforts to obtain execution of portfolio transactions at
prices which are advantageous to the Fund and at spreads and commission
rates, if any, which are reasonable in relation to the benefits received.
Dreyfus also places transactions for other accounts that it provides with
investment advice.
Brokers and dealers involved in the execution of portfolio transactions
on behalf of the Fund are selected on the basis of their professional
capability and the value and quality of their services. In selecting brokers
or dealers, Dreyfus will consider various relevant factors, including, but
not limited to, the size and type of the transaction; the nature and
character of the markets for the security to be purchased or sold; the
execution efficiency, settlement capability, and financial condition of the
broker-dealer; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any spreads (or commissions, if
any). Any spread, commission, fee or other remuneration paid to an
affiliated broker-dealer is paid pursuant to the Trust's procedures adopted
in accordance with Rule 17e-1 of the 1940 Act.
Brokers or dealers may be selected who provide brokerage and/or research
services to the Fund and/or other accounts over which Dreyfus or its
affiliates exercise investment discretion. Such services may include advice
concerning the value of securities; the advisability of investing in,
purchasing or selling securities; the availability of securities or the
purchasers or sellers of securities; furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance
and settlement).
The receipt of research services from broker-dealers may be useful to
Dreyfus in rendering investment management services to the Fund and/or its
other clients; and, conversely, such information provided by brokers or
dealers who have executed transaction orders on behalf of other clients of
Dreyfus may be useful to these organizations in carrying out their
obligation to the Fund. The receipt of such research services does not
reduce these organizations' normal independent research activities; however,
it enables these organizations to avoid the additional expenses which might
otherwise be incurred if these organizations were to attempt to develop
comparable information through their own staffs.
The Trust's Board of Trustees periodically reviews Dreyfus' performance
of its responsibilities in connection with the placement of portfolio
transactions on behalf of the Fund and reviews the prices paid by the Fund
over representative periods of time to determine if they are reasonable in
relation to the benefits to the Fund.
Although Dreyfus manages other accounts in addition to the Fund,
investment decisions for the Fund are made independently from decisions made
for these other accounts. It sometimes happens that the same security is
held by more than one of the accounts managed by Dreyfus. Simultaneous
transactions may occur when several accounts are managed by the same
investment manager, particularly when the same investment instrument is
suitable for the investment objective of more than one account.
When more than one account is simultaneously engaged in the purchase or
sale of the same investment instrument, the prices and amounts are allocated
in accordance with a formula considered by Dreyfus to be equitable to each
account. In some cases this system could have a detrimental effect on the
price or volume of the investment instrument as far as the Fund is
concerned. In other cases, however, the ability of the Fund to participate
in volume transactions will produce better executions for the Fund. While
the Trustees will continue to review simultaneous transactions, it is their
present opinion that the desirability of retaining Dreyfus as investment
manager to the Fund outweighs any disadvantages that may be said to exist
from exposure to simultaneous transactions.
For the fiscal year ended December 31, 1994, the Fund paid $3,289 in
brokerage commissions to non-affiliated brokers. For the fiscal years ended
December 31, 1995 and 1996 the Fund did not pay any brokerage commissions.
Portfolio Turnover. While the Fund does not intend to trade in
securities for short-term profits, the Fund will not consider portfolio
turnover rate a limiting factor in making investment decisions. While it is
not possible to predict the rate of frequency of portfolio transactions
(i.e., portfolio turnover rate) with any certainty, at the present time it
is anticipated that the portfolio turnover rate of the Fund is likely to
exceed 100%. Higher portfolio turnover rates can result in corresponding
increases in brokerage commissions. In addition, to the extent the Fund
realizes short-term gains as a result of more portfolio transactions, such
gains would be taxable to shareholders (other than tax-exempt shareholders)
at ordinary income tax rates.
The portfolio turnover rates for the fiscal years ended 1995 and 1996 for
the Fund were 236.10% and 251.66%, respectively.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance
Information."
The Fund's current yield for the 30-day period ended December 31, 1996
was 6.23%, 5.77%, 5.76% and 6.79% for its Class A, Class B, Class C and
Class R shares, respectively. Current yield is computed pursuant to a
formula which operates, with respect to each Class, as follows: the amount
of the Fund's expenses with respect to such Class accrued for the 30-day
period (net of reimbursements) is subtracted from the amount of the
dividends and interest earned (computed in accordance with regulatory
requirements) by the Fund with respect to such Class during the period.
That result is then divided by the product of: (a) the average daily number
of shares outstanding during the period that were entitled to receive
dividends, and (b) the maximum offering price per share in the case of Class
A or the net asset value per share in the case of Class B, Class C and Class
R on the last day of the period less any undistributed earned income per
share reasonably expected to be declared as a dividend shortly thereafter.
The quotient is then added to 1, and that sum is raised to the 6th power,
after which 1 is subtracted. The current yield is then arrived at by
multiplying the result by 2.
The Fund's average annual total returns for Class A shares for the 1, 5,
and 10 year periods ended December 31, 1996 were (1.22%), 6.49% and 7.49%
respectively. The average annual total returns for Class B shares for the 1
year period ended December 31, 1996 and for the period December 19, 1994
(inception of Class B) through December 31, 1996 were (1.33%) and 7.53%,
respectively. The average annual total returns for Class C shares for the 1
year period ended December 31, 1996 and for the period December 19, 1994
(inception of Class C) through December 31, 1996 were 1.53%, and 8.86%,
respectively. The average annual total returns for Class R shares for the 1
year period ended December 31, 1996 and for the period February 1, 1993
(inception of Class R) through December 31, 1996 were 3.58% and 7.05%,
respectively.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum
offering price in the case of Class A) per share with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and other distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result. A Class' average
annual total return figures calculated in accordance with such formula
assume that in the case of Class A the maximum sales load has been deducted
from the hypothetical initial investment at the time of purchase or in the
case of Class B or C the maximum applicable CDSC has been paid upon
redemption at the end of the period.
Effective April 4, 1994, the Retail and Institutional Class of shares of
the Fund were reclassified as a single class of Shares known as "Investor
Shares" and the Investment Class of shares of the Fund was renamed as the
Fund's "Trust Shares." Effective October 17, 1994, the Fund redesignated the
Investor Shares as "Class A shares" and the Trust Shares as "Class R
shares." The following performance data for Class A shares is reflective of
the Fund's Retail Class of Shares' performance. In addition, the following
performance data for the Class R shares of the Fund reflects the Fund's
former Investment Shares and Trust Shares.
The Fund's total return for the period August 1, 1979 (commencement of
operations) to December 31, 1996 for Class A was 370.96%. Based on net
asset value per share, the total return for Class A was 393.12% for this
period. The Fund's total return for Class B and Class C for the period from
December 19, 1994 (inception date of Class B and Class C) through December
31, 1996 was 15.93% and 18.86%, respectively. Without giving effect to the
applicable CDSC, the total return for Class B and C was 18.93% and 18.86%,
respectively, for this period. The Fund's total return for the period
February 1, 1993 (inception date of Class R) through December 31, 1996 was
30.58%.
Total return is calculated by subtracting the amount of the Fund's net
asset value (maximum offering price in the case of Class A) per share at the
beginning of a stated period from the net asset value (maximum offering
price in the case of Class A) per share at the end of the period (after
giving effect to the reinvestment of dividends and other distributions
during the period and any applicable CDSC), and dividing the result by the
net asset value (maximum offering price in the case of Class A) per share at
the beginning of the period. Total return also may be calculated based on
the net asset value per share at the beginning of the period instead of the
maximum offering price per share at the beginning of the period for Class A
shares or without giving effect to any applicable CDSC at the end of the
period for Class B or C shares. In such cases, the calculation would not
reflect the deduction of the sales load with respect to Class A shares or
any applicable CDSC with respect to Class B or C shares, which, if reflected
would reduce the performance quoted.
The Fund may compare the performance of its shares to that of other
mutual funds, relevant indices or rankings prepared by independent services
or other financial or industry publications that monitor mutual fund
performance.
Performance rankings as reported in Changing Times, Business Week,
Institutional Investor, The Wall Street Journal, Mutual Fund Forecaster, No
Load Investor, Money Magazine, Morningstar Mutual Fund Values, U.S. News and
World Report, Forbes, Fortune, Barron's, Financial Planning, Financial
Planning on Wall Street, Certified Financial Planner Today, Investment
Advisor, Kiplinger's, Smart Money and similar publications may also be used
in comparing the Fund's performance. Furthermore, the Fund may quote its
yields in advertisements or in shareholder reports.
From time to time, advertising material for the Fund may including
biographical information relating to its portfolio manager and may refer to,
or include commentary by the portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.
Yield information is useful in reviewing the Fund's performance, but
because yields fluctuate, such information cannot necessarily be used to
compare an investment in the Fund's shares with bank deposits, savings
accounts and similar investment alternatives which often provide an agreed
or guaranteed fixed yield for a stated period of time. Shareholders should
remember that yield is a function of the kind and quality of the instruments
in the Fund's portfolio, portfolio maturity, operating expenses and market
conditions. The Fund's yields and total returns will also be affected if
Dreyfus waives its investment management fees.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share, when issued and paid for in accordance with the terms of
the offering, is fully paid and non-assessable. Fund shares are without par
value, have no preemptive or subscription rights, and are freely
transferable.
The Fund will send annual and semi-annual financial statements to all of
its shareholders.
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the
Agreement and Declaration of Trust disclaims shareholder liability for acts
or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed
by the Trust or a Trustee. The Agreement and Declaration of Trust provides
for indemnification from Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund. Thus,
the risk of a shareholder's incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations, a possibility which Dreyfus
believes is remote. Upon payment of any liability incurred by the Fund, the
shareholder of the Fund paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Trustees intend to
conduct the operations of the Fund in such a way so as to avoid, as far as
possible, ultimate liability of the shareholders for liabilities of the
Fund.
The Fund is currently one of three portfolios of the Trust authorized by
the Trust's Board.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
Mellon Bank, One Mellon Bank Center, Pittsburgh, PA 15258, is the Fund's
custodian. Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, is
located at One American Express Plaza, Providence, Rhode Island 02903, and
is the Fund's transfer and dividend disbursing agent. Under a transfer
agency agreement with the Fund, the Transfer Agent arranges for the
maintenance of shareholder account records for the Fund, the handling of
certain communication between shareholders and the Fund and the payment of
dividends and distributions payable by the Fund. For these services, the
Transfer Agent receives a monthly fee computed on the basis for the number
of shareholder accounts it maintains for the Fund during the month, and is
reimbursed for certain out-of-pocket expenses. Dreyfus Transfer, Inc. and
Mellon Bank, as custodian, have no part in determining the investment
policies of the Fund or which securities are to be purchased or sold by the
Fund.
Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, Second Floor,
Washington, D.C. 20036, has passed upon the legality of the shares offered
by the Prospectus and this Statement of Additional Information.
KPMG Peat Marwick LLP was appointed by the Trustees to serve as the
Fund's independent auditors for the year ending December 31, 1997, providing
audit services including (1) examination of the annual financial statements,
(2) assistance, review and consultation in connection with the SEC and (3)
review of the annual federal income tax return filed on behalf of the Fund.
FINANCIAL STATEMENTS
The financial statements for the fiscal year ended December 31, 1996,
including notes to the financial statements and supplementary information
and the Independent Auditors' Report are included in the Annual Report to
Shareholders. A copy of the Annual Report accompanies this Statement of
Additional Information. The financial statements of the Annual Report, and
the Independent Auditors' Report thereon, are incorporated herein by
reference.
APPENDIX A
INFORMATION ABOUT SECURITIES RATINGS
Corporate Bond Ratings
Description of Moody's Investors' Service, Inc. corporate bond ratings:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt-edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa--Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba--Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa--Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.
Ca--Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to each generic rating
classification from Aa through B. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue
ranks in the lower end of its generic rating category.
Description of S&P corporate bond ratings:
AAA--Bonds rated AAA have the highest rating assigned by S&P to a debt
obligations. Capacity to pay interest and repay principal is extremely
strong.
AA--Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A--Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than bonds in higher
rated categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated
categories.
BB, B, CCC, CC--Bonds rated BB, B, CCC and CC are regarded, on balance,
as predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation. BB
represents the lowest degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Commercial Paper Ratings
The rating A-1 + is the highest, and A-l the second highest, commercial
paper rating assigned by S & P. Paper rated A-1 must have either the direct
credit support of an issuer or guarantor that possesses excellent long-term
operating and financial strengths combined with strong liquidity
characteristics (typically, such issuers or guarantors would display credit
quality characteristics which would warrant a senior bond rating of "AA-" or
higher), or the direct credit support of an issuer or guarantor that
possesses above average, long-term fundamental operating and financing
capabilities combined with ongoing excellent liquidity characteristics.
Paper rated A-1 must have the following characteristics: liquidity ratios
are adequate to meet cash requirements; long-term senior debt is rated A or
better; the issuer has access to at least two additional channels of
borrowing; basic earnings and cash flow have an upward trend with allowance
made for unusual circumstances; typically, the issuer's industry is well
established and the issuer has a strong position within the industry; and
the reliability and quality of management are unquestioned.
The rating P-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigned rating are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and the appraisal of
speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6)
trend of earnings over a period of ten years; (7) financial strength of
parent company and the relationships which exist with the issuer; and (8)
recognition by the management of obligations which may be present or may
arise as a result of public interest questions and preparations to meet such
obligations.
Description of IBCA Limited/IBCA Inc. commercial paper ratings.
Short-term obligations, including commercial paper, rated A-l+ by IBCA
Limited or its affiliate IBCA Inc. are obligations supported by the highest
capacity for timely repayment. Obligations rated A-1 have a very strong
capacity for timely repayment. Obligations rated A-2 have a strong capacity
for timely repayment, although such capacity may be susceptible to adverse
changes in business, economic or financial conditions.
Description of Fitch Investors Services LLP commercial paper ratings.
Fitch Investors Services LLP employs the rating F-l+ to indicate issues
regarded as having the strongest degree of assurance for timely payment. The
rating F-1 reflects an assurance of timely payment only slightly less in
degree than issues rated F-l+, while the rating F-2 indicates a satisfactory
degree of assurance for timely payment, although the margin of safety is not
as great as indicated by the F-1+ and F-1 categories.
Description of Duff & Phelps Ratings Co. commercial paper ratings. Duff &
Phelps Ratings Co.employs the designation of Duff 1 with respect to top
grade commercial paper and bank money instruments. Duff 1+ indicates the
highest certainty of timely payment: short-term liquidity is clearly
outstanding, and safety is just below risk-free U.S. Treasury short-term
obligations. Duff 1- indicates high certainty of timely payment. Duff 2
indicates good certainty of timely payment: liquidity factors and company
fundamentals are sound.
Various of the nationally recognized statistical rating organizations
utilize rankings within rating categories indicated by a + or -. The Fund,
in accordance with industry practice, recognize as such rankings within
categories as graduations, viewing for example S&P's rating of A-1+ and A-1
as being in S&P's highest rating category.
Description of Thomson BankWatch, Inc. ("BankWatch") commercial paper
ratings. BankWatch will assign both short-term debt ratings and issuer
ratings to the issuers it rates. BankWatch will assign a short-term rating
("TBW-1," "TBW-2,""TBW-3," or "TBW-4") to each class of debt (e.g.,
commercial paper or non-convertible debt), having a maturity of one-year or
less, issued by a holding company structure or an entity within the holding
company structure that is rated by BankWatch. Additionally, BankWatch will
assign an issuer rating ("A," "A/B," "B," "B/C," "C," "C/D," "D," "D/E," and
"E") to each issuer that it rates.
<TABLE>
<CAPTION>
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1996
Principal
Convertible Subordinated Debentures-.8% Amount Value
__________ ____________
<S> <C> <C> <C> <C>
Foreign; Rogers Communications,
2%, 2005.............................
(cost $724,876)...................... $ 1,405,000 $ 779,775
_____________
Bonds and Notes-99.0%
Aircraft & Aerospace-.7% BE Aerospace,
Sr. Sub. Notes, 9 7/8%, 2006......... 300,000 316,500
K&F Industries,
Sr. Sub. Notes, 10 3/8%, 2004........ 320,000 339,200
_____________
655,700
_____________
Banking-5.5%.. First National Bank of Boston,
Sub. Notes, 7 3/8%, 2006............. 758,000 770,609
First Nationwide Holdings,
Sr. Sub. Notes, 10 5/8%, 2003........ 350,000 (a) 379,750
First Security,
Sr. Notes, 6 7/8%, 2006.............. 670,000 655,726
First USA Bank,
Medium-Term Notes, 8.10%, 1997....... 710,000 711,950
First Union Institutional Capital II,
Gtd. Capital Securities, 7.85%, 2027. 445,000 (a) 440,939
Fleet Financial Group,
Sub. Notes, 7 1/8%, 2006............. 400,000 399,382
NationsBank,
Sub. Notes, 7 1/2%, 2006............. 882,000 906,897
Sanwa Business Credit,
Notes, 7 1/4%, 2001.................. 925,000 (a) 943,223
_____________
5,208,476
_____________
Broadcasting & Media-2.8% Cablevision Systems,
Sr. Sub. Notes, 9 7/8%, 2006......... 125,000 128,906
Century Communications,
Sr. Notes, 9 1/2%, 2000.............. 600,000 619,500
Comcast,
Sr. Sub. Deb., 9 3/8%, 2005.......... 400,000 417,000
JCAC (Gtd. by Jacor Communications),
Sr. Sub. Notes, 10 1/8%, 2006........ 400,000 417,000
LodgeNet Entertainment,
Sr. Notes, 10 1/4%, 2006............. 600,000 (a) 600,750
News America Holdings,
Gtd. Sr. Notes, 8 5/8%, 2003......... 365,000 392,399
Tele-Communications,
Medium-Term Notes, 7.13%, 1998....... 100,000 100,594
_____________
2,676,149
_____________
Building &
Construction-.1% American Standard,
Sr. Notes, 10 7/8%, 1999............. 100,000 107,000
_____________
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
_________ _________
Consumer-5.4% CPC International,
Medium-Term Notes, Ser. D, 6 7/8%, 2003 $ 875,000 $ 885,088
E&S Holdings,
Sr. Sub. Notes, 10 3/8%, 2006........ 400,000 (a) 420,500
Federated Department Stores,
Sr. Notes, 8 1/8%, 2002.............. 125,000 128,164
International Semi-Tech Microelectronics,
Sr. Secured Discount Notes,
Zero Coupon, 2000.................... 450,000 (b) 293,625
Loewen Group International,
Gtd. Sr. Notes, Ser. I, 7 1/2%, 2001. 200,000 199,976
Muzak L.P./Capital,
Sr. Notes, 10%, 2003................. 400,000 411,000
Prime Succession Acquisition,
Sr. Sub. Notes, 10 3/4%, 2004........ 130,000 (a) 141,375
Revlon Worldwide,
Sr. Secured Discount Notes,
Zero Coupon, 1998.................... 400,000 349,000
Rite Aid,
Notes, 6.70%, 2001................... 200,000 199,939
Safeway,
Sr. Sub. Deb., 9.65%, 2004........... 150,000 168,376
Sears Roebuck Acceptance,
Medium-Term Notes:
Ser. I, 5.60%, 1998 535,000 530,105
Ser. I, 5.71%, 2001 305,000 296,138
Ser. II, 6.69%, 2001 930,000 934,635
Southland,
Sr. Sub. Deb., 5%, 2003.............. 250,000 208,125
_____________
5,166,046
_____________
Energy-2.4% Chesapeake Energy,
Sr. Notes, 9 1/8%, 2006.............. 726,000 756,855
Flores & Rucks,
Sr. Sub. Notes, 9 3/4%, 2006......... 500,000 531,250
Gulf Canada Resources Ltd.,
Sr. Sub. Deb., 9 5/8%, 2005.......... 400,000 435,000
HS Resources,
Sr. Sub. Notes, 9 1/4%, 2006......... 205,000 (a) 210,638
NorAm Energy,
Notes, 7 1/2%, 2000.................. 100,000 102,833
Norcen Energy Resources Ltd.,
Deb., 7 3/8%, 2006................... 165,000 167,256
Oryx Energy,
Notes, 10%, 2001..................... 80,000 87,783
_____________
2,291,615
_____________
Finance-9.6% Aetna/Travelers Life and Casualty,
Notes, 6 3/4%, 2001.................. 380,000 382,033
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
____________ ____________
Finance (continued) Associates Corp. of North America, Sr. Notes:
6 5/8%, 2001......................... $ 280,000 $ 280,538
6 3/4%, 2001......................... 225,000 226,313
6 3/4%, 2001......................... 210,000 211,350
Dollar Financial Group,
Sr. Notes, 10 7/8%, 2006............. 300,000 (a) 310,500
GMAC,
Notes, 6 7/8%, 2001.................. 780,000 784,689
H.F. Ahmanson & Co.,
Medium-Term Notes, Ser. A, 7.65%, 2000 630,000 651,908
Lehman Brothers,
Sr. Sub. Notes, 6 1/8%, 2001......... 400,000 389,789
Lehman Brothers Holdings:
Medium-Term Notes:
Ser. D, 6 1/8%, 1998 230,000 228,426
Ser. E, 6.65%, 1998 615,000 617,867
Notes, 7 1/4%, 2003.................. 345,000 346,487
Lincoln National,
Deb., 7 1/4%, 2005................... 770,000 772,584
McDonnell Douglas Financial Services,
Medium-Term Notes, Ser. B, 6.53%, 1998 245,000 (a) 245,803
Merrill Lynch & Co.,
Notes, 7 3/8%, 2006.................. 670,000 684,908
Paine Webber Group,
Medium-Term Sr. Notes, Ser. C, 7.31%, 2000 1,093,000 1,110,189
Notes, 7 5/8%, 2008.................. 445,000 448,293
Prudential Insurance Company of America,
Surplus Notes, 7.65%, 2007........... 117,000 (a) 119,705
Smith Barney Holdings, Notes:
7 7/8%, 1999......................... 1,000,000 1,036,126
7 1/8%, 2006......................... 325,000 324,274
_____________
9,171,782
_____________
Finance/
Asset Backed-6.8% Asset Securitization,
Commercial Mortgage Pass-Through Ctfs.,
Ser. 1996-MD VI, Cl. A-1C, 7.04%, 2026 780,000 781,584
Capita Equipment Receivables Trust,
Receivable-Backed Notes,
Ser. 1996-1, Cl. A-3, 6.11%, 1999.... 1,190,000 1,191,859
Centrex Auto Trust,
Asset Backed Notes,
Ser. 1996-B, Cl. A, 6.15%, 2004...... 549,000 (a) 547,284
EQCC Home Equity Loan Trust,
Asset Backed Ctfs.:
Ser. 1993-3, 5.15%, 2008 643,208 612,733
Ser. 1996-1, Cl. A-2, 5.82%, 2009 627,000 619,996
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
__________ __________
Finance/
Asset Backed (continued) Ford Credit Auto Owner Trust,
Asset Backed Notes,
Ser. 1996-A, Cl. A-3, 6 1/2%, 1999... $ 640,000 $ 645,715
TMS Home Equity Trust,
Asset Backed Ctfs.:
Ser. 1994-B, Cl. A-4, 7.60%, 2021 359,000 368,126
Ser. 1994-C, Cl. A-4, 7.80%, 2021 245,000 252,595
Ser. 1996-C, Cl. A-6, 7.69%, 2024 637,000 655,065
UACSC Auto Trust,
Automobile Receivable Backed Ctfs.,
Ser. 1996-D, Cl. A-2, 6.17%, 2002.... 808,000 803,798
_____________
6,478,755
_____________
Foreign-8.0% ANZ Banking Group Ltd.,
Sub. Notes, 7.55%, 2006.............. 755,000 782,142
Aegon N.V.,
Sub. Notes, 8%, 2006................. 972,000 1,035,245
BHP Finance (USA) Ltd.
(Gtd. by Broken Hill Proprietary Ltd.),
Notes, 6.69%, 2006................... 967,000 945,898
China International Trust and Investment,
Bonds, 6 7/8%, 2003.................. 1,000,000 963,466
Hanson Overseas B.V.,
Gtd. Sr. Notes, 6 3/4%, 2005......... 619,000 607,391
Malayan Banking Berhad,
Sub. Notes, 7 1/8%, 2005............. 160,000 159,330
Midland Bank plc,
Sub. Notes, 7 5/8%, 2006............. 519,000 536,937
People's Republic of China,
Bonds, 7 3/4%, 2006.................. 610,000 624,797
Petroliam Nasional Berhad,
Bonds, 7 5/8%, 2026.................. 890,000 (a) 903,022
Stone-Consolidated,
Sr. Secured Notes, 10 1/4%, 2000..... 470,000 500,550
Wharf Capital International Ltd.,
Gtd. Notes, 8 7/8%, 2004............. 490,000 515,634
_____________
7,574,412
_____________
Hospital Related-1.9% Genesis Health Ventures,
Sr. Sub. Notes, 9 1/4%, 2006......... 310,000 (a) 320,075
Integrated Health Services,
Sr. Sub. Notes, 9 5/8%, 2002......... 400,000 414,000
Tenet Healthcare,
Sr. Notes, 9 5/8%, 2002.............. 620,000 682,000
Universal Health Services,
Sr. Notes, 8 3/4%, 2005.............. 380,000 391,875
_____________
1,807,950
_____________
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
__________ __________
Industrial-8.1% ADT Operations,
Gtd. Sr. Notes, 8 1/4%, 2000......... $ 100,000 $ 104,458
Building Materials Corp. of America,
Sr. Notes, 8 5/8%, 2006.............. 490,000 (a) 490,000
ConAgra,
Sr. Notes, 7 1/8%, 2006.............. 670,000 (c) 684,267
Goss Graphic Systems,
Sr. Sub. Notes, 12%, 2006............ 175,000 181,125
Iron Mountain,
Sr. Sub. Notes, 10 1/8%, 2006........ 600,000 639,000
Lear Seating,
Sub. Notes, 8 1/4%, 2002............. 485,000 491,063
Lockheed Martin:
Gtd. Deb., 7 3/4%, 2026.............. 1,235,000 1,289,778
Gtd. Notes, 7 1/4%, 2006............. 405,000 412,074
Newport News Shipbuilding,
Sr. Notes, 8 5/8%, 2006.............. 300,000 (a) 308,250
Plastic Containers,
Sr. Secured Notes, 10%, 2006......... 325,000 (a) 334,750
Pohang Iron & Steel, Ltd.,
Notes, 7 3/8%, 2005.................. 845,000 858,051
Rayovac,
Sr. Sub. Notes, 10 1/4%, 2006........ 300,000 (a) 309,000
Safelite Glass,
Sr. Sub Notes, 9 7/8%, 2006.......... 250,000 (a) 258,750
Speedy Muffler King,
Sr. Notes, 10 7/8%, 2006............. 480,000 517,200
USG,
Sr. Notes, Ser. B, 9 1/4%, 2001...... 400,000 424,986
Valassis Inserts,
Sr. Sub. Notes, 9 3/8%, 1999......... 440,000 451,228
_____________
7,753,980
_____________
Metals-.8% Kaiser Aluminum & Chemical,
Sr. Notes, 10 7/8%, 2006............. 350,000 (a) 370,125
U.S. Can,
Sr. Sub. Notes, 10 1/8%, 2006........ 350,000 (a) 369,250
_____________
739,375
_____________
Paper-.7% Fort Howard,
Sr. Notes, 9 1/4%, 2001.............. 400,000 417,000
Stone Container,
First Mortgage Notes, 10 3/4%, 2002.. 210,000 222,075
_____________
639,075
_____________
Railroad-1.2% Burlington Northern Railroad Trust,
Pass Through Ctfs.,
Ser. 1996-B, 6.96%, 2009............. 430,000 432,580
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
______ ______
Railroad (continued) Union Pacific,
Notes, 6.70%, 2006................... $ 715,000 $ 696,214
_____________
1,128,794
_____________
Telecommunications-2.4% 360 Communications,
Sr. Notes, 7 1/8%, 2003.............. 225,000 222,716
MFS Communications,
Sr. Discount Notes, Zero Coupon, 2001 600,000 (d) 444,750
Paging Network,
Sr. Sub. Notes, 10%, 2008............ 450,000 458,438
Teleport Communications Group,
Sr. Notes, 9 7/8%, 2006.............. 400,000 430,000
Vanguard Cellular Systems,
Sr. Deb., 9 3/8%, 2006............... 700,000 710,500
_____________
2,266,404
_____________
Textiles-1.1% Dominion Textile (USA),
Gtd. Sr. Notes, 8 7/8%, 2003......... 400,000 407,000
WestPoint Stevens,
Sr. Notes, 8 3/4%, 2001.............. 615,000 632,681
_____________
1,039,681
_____________
Utilities-1.4% El Paso Electric,
First Mortgage Bonds, Ser. A, 7 1/4%, 1999 740,000 744,625
Ferrellgas Partners Finance/Partners, L.P.,
Sr. Secured Notes, 9 3/8%, 2006...... 485,000 494,094
Ohio Edison,
First Mortgage Bonds, 8 3/4%, 1998... 110,000 112,598
_____________
1,351,317
_____________
U.S. Government
Agencies-36.2% Federal National Mortgage Association:
6.097%, 2/1/2031..................... 493,922 (e) 492,071
6 1/2%, 4/1/2003-5/1/2026............ 3,425,562 3,307,015
7%, 7/1/2003-11/1/2026............... 9,488,086 (f) 9,433,941
7.43%, 8/1/2006...................... 596,463 604,850
7 1/2%, 10/1/2003-10/1/2011.......... 3,199,562 3,248,458
7.536%, 6/1/2016..................... 962,474 982,025
8%, 10/1/2010-6/1/2026............... 5,843,993 5,974,025
9%, 4/1/2025-6/1/2026................ 3,335,116 3,520,559
14 3/4%, 8/1/2012.................... 33,746 38,797
Multifamily REMIC Trust,
Gtd. REMIC Pass-Through Ctfs.,
Ser. 1996-M7, Cl. B, 6.856%, 6/17/2011 320,000 (e) 317,600
Real Estate Mortgage Investment
Conduit Trust, Pass-Through Ctfs.
(Collateralized by FNMA Pass-Through Ctfs.),
Ser. G92-20, Cl. SA, 468 7/8%, 4/25/2022
(Interest Only Obligation) (e,g) 192,881
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
__________ __________
U.S Government
Agencies (continued) Government National Mortgage Association I:
7 1/2%, 12/15/2023-12/15/2026........ $ 2,909,660 (f) $ 2,918,137
8 1/2%, 12/15/2021................... 967,908 1,006,925
Government National Mortgage Association II:
7%, 6/20/2026........................ 1,465,111 1,427,106
8%, 11/20/2026....................... 1,065,918 1,082,899
_____________
34,547,289
_____________
U.S. Government-3.9% U.S. Treasury Bonds:
11 3/4%, 2/15/2010................... 318,000 422,542
7 1/4%, 5/15/2016.................... 2,568,000 2,712,450
7 1/8%, 2/15/2023.................... 248,000 258,928
U.S. Treasury Notes,
7 1/4%, 8/15/2004.................... 324,000 341,162
_____________
3,735,082
_____________
TOTAL BONDS AND NOTES
(cost $93,572,005)................... $94,338,882
==============
Short-Term Investments-.8%
Commercial Paper; Ford Motor Credit,
7.10%, 1/2/1997
(cost $755,000)...................... $ 755,000 $ 755,000
==============
TOTAL INVESTMENTS (cost $95,051,881)........................................ 100.6% $95,873,657
======== ==============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (.6%) $ (608,435)
======== ==============
NET ASSETS.................................................................. 100.0% $95,265,222
======== ==============
Notes to Statements of Investments:
(a) Securities exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
December 31, 1996, these securities amounted to $8,023,689 or 8.4% of net
assets.
(b) Zero Coupon until 8/15/2000, date on which a stated coupon rate of
11 1/2% becomes effective; the stated maturity date is 8/15/2003.
(c) Reflects date security can be redeemed at holder's option; the
stated maturity is 10/1/2026.
(d) Zero coupon until 1/15/2001, date on which a stated coupon rate of 8
7/8% becomes effective; the stated maturity is 1/15/2006.
(e) Variable rate security-interest rate subject to periodic change.
(f) Partially purchased on a forward commitment basis.
(g) Nominal face $15,308.
See notes to financial statements.
PREMIER MANAGED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
Cost Value
____________ ____________
ASSETS: Investments in securities-See Statement of Investments $ 95,051,881 $ 95,873,657
Receivable for investment securities sold.. 2,610,281
Interest receivable........................ 1,202,685
____________
99,686,623
____________
LIABILITIES: Due to The Dreyfus Corporation............. 57,142
Due to Distributor......................... 20,899
Cash overdraft due to Custodian............ 114,655
Payable for investment securities purchased 3,190,947
Payable for shares of Beneficial Interest redeemed 1,037,758
____________
4,421,401
____________
NET ASSETS.................................................................. $ 95,265,222
=============
REPRESENTED BY: Paid-in capital............................ $102,697,424
Accumulated net realized gain (loss) on investments (8,253,978)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 3 821,776
____________
NET ASSETS.................................................................. $ 95,265,222
=============
NET ASSET VALUE PER SHARE
_______________________________
Class A Class B Class C Class R
_____________ ______________ _______________ ________________
Net Assets...................... $ 77,304,888 $ 4,973,026 $ 420,12 $ 12,567,181
Shares Outstanding..................... 7,206,339 463,576 39,155 1,171,741
NET ASSET VALUE PER SHARE............ $10.73 $10.73 $10.73 $10.73
======== ======= ======== ========
See notes to financial statements.
PREMIER MANAGED INCOME FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME
INCOME Interest Income............................ $ 7,043,422
EXPENSES: Management fee-Note 2(a)................... $ 653,857
Distribution and service fees-Note 2(b).... 233,817
Trustees' fees and expenses-Note 2(c)...... 9,146
___________
Total Expenses......................... 896,820
____________
INVESTMENT INCOME-NET....................................................... 6,146,602
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 3:
Net realized gain (loss) on investments.... $ (576,926)
Net unrealized appreciation (depreciation) on investments (2,599,839)
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (3,176,765)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 2,969,837
=============
See notes to financial statements.
PREMIER MANAGED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1996 December 31, 1995
___________________ ___________________
OPERATIONS:
Investment income-net.......................................... $ 6,146,602 $ 6,556,543
Net realized gain (loss) on investments........................ (576,926) (862,188)
Net unrealized appreciation (depreciation) on investments...... (2,599,839) 9,120,356
___________________ ___________________
Net Increase (Decrease) in Net Assets Resulting from Operations 2,969,837 14,814,711
___________________ ___________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares............................................... (5,098,797) (5,668,955)
Class B shares............................................... (204,999) (55,908)
Class C shares............................................... (9,243) (1,493)
Class R shares............................................... (832,063) (797,413)
___________________ ___________________
Total Dividends............................................ (6,145,102) (6,523,769)
___________________ ___________________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares............................................... 11,645,529 10,220,352
Class B shares............................................... 3,058,864 2,207,592
Class C shares............................................... 417,763 87,477
Class R shares............................................... 5,288,706 6,078,239
Dividends reinvested:
Class A shares............................................... 4,086,892 4,488,158
Class B shares............................................... 94,447 29,712
Class C shares............................................... 2,065 405
Class R shares............................................... 747,833 647,434
Cost of shares redeemed:
Class A shares............................................... (16,479,953) (20,718,702)
Class B shares............................................... (359,304) (68,609)
Class C shares............................................... (65,122) (22,587)
Class R shares............................................... (4,614,714) (5,758,344)
___________________ ___________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 3,823,006 (2,808,873)
___________________ ___________________
Total Increase (Decrease) in Net Assets.................. 647,741 5,482,069
NET ASSETS:
Beginning of Period............................................ 94,617,481 89,135,412
___________________ ___________________
End of Period.................................................. $ 95,265,222 $ 94,617,481
=================== ===================
DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME-NET................. __ $ (1,500)
___________________ ___________________
See notes to financial statements.
PREMIER MANAGED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
____________________________________________
Year Ended Year Ended
December 31, 1996 December 31, 1995
___________________ ___________________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold...................................................... 1,074,433 973,428
Shares issued for dividends reinvested........................... 383,665 420,887
Shares redeemed.................................................. (1,542,448) (1,961,160)
___________________ ___________________
Net Increase (Decrease) in Shares Outstanding (84,350) (566,845)
=================== ===================
Class B
________
Shares sold...................................................... 286,510 205,379
Shares issued for dividends reinvested........................... 8,877 2,738
Shares redeemed.................................................. (33,651) (6,278)
___________________ ___________________
Net Increase (Decrease) in Shares Outstanding 261,736 201,839
=================== ===================
Class C
________
Shares sold...................................................... 39,075 8,049
Shares issued for dividends reinvested........................... 193 37
Shares redeemed.................................................. (6,124) (2,076)
___________________ ___________________
Net Increase (Decrease) in Shares Outstanding 33,144 6,010
=================== ===================
Class R
________
Shares sold...................................................... 493,176 574,177
Shares issued for dividends reinvested........................... 70,200 60,440
Shares redeemed.................................................. (432,290) (541,031)
___________________ ___________________
Net Increase (Decrease) in Shares Outstanding 131,086 93,586
=================== ===================
See notes to financial statements.
</TABLE>
PREMIER MANAGED INCOME FUND
FINANCIAL HIGHLIGHTS
Reference is made to pages 4, 5, 6, 7 and 8 of the Fund's Prospectus
dated May 1, 1997.
See notes to financial statements.
PREMIER MANAGED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1- SIGNIFICANT ACCOUNTING POLICIES:
The Dreyfus/Laurel Funds Trust (the "Trust") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering three
series including the Premier Managed Income Fund (the "Fund"). The Fund's
investment objective is to seek 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. The Dreyfus Corporation ("Manager")
serves as the Fund's investment manager. The Manager is a direct subsidiary
of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an
unlimited number of shares of Beneficial Interest in the following classes of
shares: Class A, Class B, Class C and Class R. Class A, Class B and Class C
shares are sold primarily to retail investors through financial
intermediaries and bear a distribution fee and/or service fee. Class A shares
are sold with a front-end sales charge, while Class B and Class C shares are
subject to a contingent deferred sales charge ("CDSC") and a service fee.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee or service
fee. Class R shares are offered without a front-end sales load or CDSC. Each
class of shares has identical rights and privileges, except with respect to
distribution fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding short-term
investments and U.S. Government obligations) are valued each business day by
an independent pricing service ("Service") approved by the Board of Trustees.
Investments for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the
Service from dealers in such securities) and asked prices (as calculated by
the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from dealers;
and general market conditions. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the dire
ction of the Board of Trustees. Investments in U.S. Government obligations
are valued at the mean between quoted bid and asked prices. Short-term
investments are carried at amortized cost, which approximates value.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recorded on the ex-dividend date. Interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(C) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund to
declare dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain, if any, are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can be offset by
capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
PREMIER MANAGED INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by complying with
the applicable provisions of the Internal Revenue Code, and to make
distributions of taxable income sufficient to relieve it from substantially
all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $8,217,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1996. The
carryover does not include net realized securities losses from November 1,
1996 through December 31, 1996 which are treated, for Federal income tax
purposes, as arising in fiscal 1997. If not applied, $6,470,000 of the
carryover expires in fiscal 2002, $540,000 of the carryover expires in fiscal
2003, and $1,207,000 of the carryover expires in fiscal 2004.
NOTE 2-INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties or affiliates to provide investment advisory, administrative,
custody, fund accounting and transfer agency services to the Fund. The
Manager also directs the investments of the Fund in accordance with its
investment objective, policies and limitations. For these services, the Fund
is contractually obligated to pay the Manager a fee, calculated daily and
paid monthly, at the annual rate of .70% of the value of the Fund's average
daily net assets. Out of its fee, the Manager pays all of the expenses of the
Fund except brokerage fees, taxes, interest, Rule 12b-1 distribution fees and
expenses, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to
reduce its fee in an amount equal to the Fund's allocable portion of fees and
expenses of the non-interested Trustees (including counsel).
(B) DISTRIBUTION AND SERVICE PLAN: The Fund has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, the Fund may pay annually up to .25%
of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the
sale of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .75% of the value of the average daily net assets of Class B and
Class C shares. Class B and Class C shares are also subject to a service plan
adopted pursuant to Rule 12b-1, pursuant to which the Fund pays Dreyfus
Service Corporation or the Distributor for providing certain services to the
holders of Class B and Class C shares a fee at the annual rate of .25% of the
value of the average daily net assets of Class B and Class C shares. Class R
shares bear no service or distribution fee. For the period ended December 31,
1996, the distribution fee for Class A, Class B and Class C shares was
$196,636, $26,667 and $1,219, respectively. During the period ended December
31, 1996, the service fee for Class B and Class C shares was $8,889 and $406,
respectively.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Trustees who are not "interested persons" of the Trust and who have no direct
or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(C) TRUSTEES' FEES: Each trustee who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee meeting attended and is reimbursed
for travel and out-of-pocket expenses. These expenses are paid in total by
the following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel
Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the
Chairman of the Board receives an annual fee of $75,000 per year. These fees
and expenses are charged and allocated to each series
PREMIER MANAGED INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
based on net assets.
NOTE 3- SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the period
ended December 31, 1996 amounted to $239,911,562 and $233,198,317,
respectively.
At December 31, 1996, accumulated net unrealized appreciation on
investments was $821,776, consisting of $1,497,046 gross unrealized
appreciation and $675,270 gross unrealized depreciation.
At December 31, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 4-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ended December 31, 1996, the Fund did not
borrow under the line of credit.
PREMIER MANAGED INCOME FUND
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL FUNDS TRUST:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Managed Income Fund of The
Dreyfus/Laurel Funds Trust as of December 31, 1996, and the related statement
of operations for the year then ended, the statements of changes in net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the three-year period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for each of the years or periods in the
two-year period ended December 31, 1993 were audited by other auditors whose
report thereon, dated February 14, 1994, expressed an unqualified opinion on
those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of December 31, 1996, by correspondence with the
custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Managed Income Fund of The Dreyfus/Laurel Funds Trust as
of December 31, 1996, the results of its operations for the year then ended,
changes in its net assets for each of the years in the two-year period then
ended and its financial highlights for each of the years in the three-year
period then ended, in conformity with generally accepted accounting
principles.
[KPMG Peat Marwick signature logo]
New York, New York
February 14, 1997
THE DREYFUS/LAUREL FUNDS TRUST
(formerly The Laurel Funds Trust)
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
Financial Highlights for each of the periods
indicated therein.
Included in Part B: The following financial statements
for the first year ended December 31, 1996 are incorporated by reference to
the Registrant's Semi-Annual Report to Shareholders filed on February 28,
1997
- Reports of Independent Auditors.
- Portfolio of Investments.
- Statement of Assets and Liabilities.
- Statement of Operations.
- Statements of Changes in Net Assets.
- Notes to Financial Statements.
(b) Exhibits:
1(a) Second Amended and Restated Agreement and Declaration of
Trust. Incorporated by reference to Post-Effective
Amendment No. 87.
1(b) Amendment No. 1 to Registrant's Second Amended
and Restated Agreement and Declaration of Trust filed on
February 7, 1994. Incorporated by reference to
Post-Effective Amendment No. 90.
1(c) Amendment No. 2 to Registrant's Second Amended
and Restated Agreement and Declaration of Trust filed on
March 31, 1994. Incorporated by reference to
Post-Effective Amendment No. 90.
1(d) Amendment No. 3 to Registrant's Second Amended
and Restated Agreement and Declaration of Trust.
Incorporated by reference to Post-Effective Amendment No.
93 filed on December 13, 1994.
1(e) Amendment No. 4 to Registrant's Second Amended
and Restated Agreement and Declaration. Incorporated by
reference to Post-Effective Amendment No. 93.
2 Amended and Restated By-Laws. Incorporated by
reference to Post-Effective Amendment No. 75.
3 Not Applicable.
4 Specimen security. To be filed by Amendment.
5(a) Investment Management Agreement between the Registrant and
Mellon Bank, N.A., dated April 4, 1994. Incorporated by
reference to Post-Effective Amendment No. 90.
5(b) Assignment Agreement among the Registrant, Mellon Bank, N.A.
and The Dreyfus Corporation, dated as of October 17, 1994,
(relating to Investment Management Agreement
dated April 4, 1994). Incorporated by reference to
Post-Effective Amendment No. 93 filed on December 13, 1994.
6 Distribution Agreement between the Registrant and Premier
Mutual Fund Services, Inc., dated as of October 17, 1994.
Incorporated by reference to Post-Effective
Amendment No. 93 filed on December 13, 1994.
7 Not applicable.
8(a) Custody and Fund Accounting Agreement between the Registrant
and Mellon Bank, N.A., dated April 4, 1994. Incorporated by
reference to Post-Effective Amendment No. 102 filed on
April 23, 1997.
8(b) Amendment to Custody and Fund Accounting Agreement, dated
August 1, 1994. Incorporated by reference to Post-Effective
Amendment No. 93 filed on December 13, 1994.
9(a) Transfer Agent Agreement between the Registrant
and Boston Safe Deposit and Trust Company (currently known
as The Shareholder Services Group, Inc.) Incorporated by
reference to Post-Effective Amendment No. 102 filed on
April 23, 1997.
9(b) Supplement to Transfer Agent Agreement for the Registrant,
dated June 1, 1989. Incorporated by reference to Post-
Effective Amendment No. 78.
9(c) Supplement to Transfer Agent Agreement for the Registrant,
dated April 4, 1994. Incorporated by
reference to Post-Effective Amendment No. 93 filed on
December 13, 1994.
10 Opinion of counsel is incorporated by reference to the
Registration Statement and to Post-Effective Amendment No.
93 filed on December 13, 1994. Consent of counsel is filed
herewith.
11(a) Consent of KPMG Peat Marwick LLP is incorporated
by reference to Post-Effective Amendment No. 94.
11(b) Consent of Coopers & Lybrand LLP is incorporated
by reference to Post-Effective Amendment No. 94.
12 Not Applicable.
13 Not Applicable.
14 Not applicable.
15(a) Restated Distribution Plan (relating to Investor Shares and
Class A Shares). Incorporated by reference to Post-
Effective Amendment No. 93 filed on December 13, 1994.
15(b) Form of Distribution and Service Plans (relating
to Class B Shares and Class C Shares). Incorporated by
reference to Post-Effective Amendment No. 93 filed on
December 13, 1994.
16 Performance Information is incorporated by reference
to Post-Effective Amendment No. 76.
18 Registrant's Rule 18f-3 Plans, as revised are incorporated
by reference to Post-Effective Amendment No. 100.
Other Exhibits
--------------
(a) Powers of attorney of the Trustees and Officers dated April
5, 1995 are incorporated by reference to Post-Effective
Amendment No. 94.
Item 25. Persons Controlled By or Under Common Control with
Registrant
Not Applicable.
Item 26. Number of Holders of Securities
-------------------------------
Set forth below are the number of recordholders of
securities of each series of the Registrant as of
March 31, 1997:
Number of Record Holders
Investor Class R Institutional
Title of Class Shares Shares Shares
- -------------- ------- ------- -------------
Dreyfus Core Value Fund 19,114 64 1,712
Class A Class B Class C Class R
Dreyfus Premier Managed Income Fund 4,516 256 11 63
Item 27. Indemnification
---------------
Under a provision of the Registrant's Second Amended and Restated
Agreement and Declaration of Trust (the "Declaration of Trust"), any past or
present Trustee or officer of the Registrant is indemnified to the fullest
extent permitted by law against liability and all expenses reasonably
incurred by him/her in connection with any action, suit or proceeding to
which he/she may be a party or otherwise involved by reason of his/her being
or having been a Trustee or officer of the Registrant.
This provision does not authorize indemnification against any
liability to the Registrant or its shareholders to which such Trustee or
officer would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his/her duties. Moreover,
this provision does not authorize indemnification where such Trustee or
officer is finally adjudicated not to have acted in good faith in the
reasonable belief that his/her actions were in or not opposed to the best
interests of the Registrant. Expenses may be paid by the Registrant in
advance of the final disposition of any action, suit or proceeding upon
receipt of an undertaking by such Trustee or officer to repay such expenses
to the Registrant if it is ultimately determined that indemnification of such
expenses is not authorized under the Declaration of Trust.
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
Investment Adviser -- The Dreyfus Corporation
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists primarily
of providing investment management services as the investment adviser,
manager and distributor for sponsored investment companies registered under
the Investment Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as sub-investment
adviser to and/or administrator of other investment companies. Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus, serves primarily
as a registered broker-dealer of shares of investment companies sponsored by
Dreyfus and of other investment companies for which Dreyfus acts as
investment adviser, sub-investment adviser or administrator. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides investment
management services to various pension plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
World Balanced Fund++++;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund+++;
World Balanced Fund++++;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation+
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 131 Second Street, Lewes,
Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route 'd'Esch,
L-1470 Luxembourg.
++++ The address of the business so indicated is 69, Route 'd'Esch,
L-2953 Luxembourg.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Tax-Free Municipal Funds
36) Dreyfus LifeTime Portfolios, Inc.
37) Dreyfus Liquid Assets, Inc.
38) Dreyfus Massachusetts Intermediate Municipal Bond Fund
39) Dreyfus Massachusetts Municipal Money Market Fund
40) Dreyfus Massachusetts Tax Exempt Bond Fund
41) Dreyfus MidCap Index Fund
42) Dreyfus Money Market Instruments, Inc.
43) Dreyfus Municipal Bond Fund, Inc.
44) Dreyfus Municipal Cash Management Plus
45) Dreyfus Municipal Money Market Fund, Inc.
46) Dreyfus New Jersey Intermediate Municipal Bond Fund
47) Dreyfus New Jersey Municipal Bond Fund, Inc.
48) Dreyfus New Jersey Municipal Money Market Fund, Inc.
49) Dreyfus New Leaders Fund, Inc.
50) Dreyfus New York Insured Tax Exempt Bond Fund
51) Dreyfus New York Municipal Cash Management
52) Dreyfus New York Tax Exempt Bond Fund, Inc.
53) Dreyfus New York Tax Exempt Intermediate Bond Fund
54) Dreyfus New York Tax Exempt Money Market Fund
55) Dreyfus 100% U.S. Treasury Intermediate Term Fund
56) Dreyfus 100% U.S. Treasury Long Term Fund
57) Dreyfus 100% U.S. Treasury Money Market Fund
58) Dreyfus 100% U.S. Treasury Short Term Fund
59) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
60) Dreyfus Pennsylvania Municipal Money Market Fund
61) Dreyfus Premier California Municipal Bond Fund
62) Dreyfus Premier Equity Funds, Inc.
63) Dreyfus Premier Global Investing, Inc.
64) Dreyfus Premier GNMA Fund
65) Dreyfus Premier Growth Fund, Inc.
66) Dreyfus Premier Insured Municipal Bond Fund
67) Dreyfus Premier Municipal Bond Fund
68) Dreyfus Premier New York Municipal Bond Fund
69) Dreyfus Premier State Municipal Bond Fund
70) Dreyfus Premier Value Fund
71) Dreyfus S&P 500 Index Fund
72) Dreyfus Short-Intermediate Government Fund
73) Dreyfus Short-Intermediate Municipal Bond Fund
74) The Dreyfus Socially Responsible Growth Fund, Inc.
75) Dreyfus Stock Index Fund, Inc.
76) Dreyfus Tax Exempt Cash Management
77) The Dreyfus Third Century Fund, Inc.
78) Dreyfus Treasury Cash Management
79) Dreyfus Treasury Prime Cash Management
80) Dreyfus Variable Investment Fund
81) Dreyfus Worldwide Dollar Money Market Fund, Inc.
82) General California Municipal Bond Fund, Inc.
83) General California Municipal Money Market Fund
84) General Government Securities Money Market Fund, Inc.
85) General Money Market Fund, Inc.
86) General Municipal Bond Fund, Inc.
87) General Municipal Money Market Fund, Inc.
88) General New York Municipal Bond Fund, Inc.
89) General New York Municipal Money Market Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Roy M. Moura+ First Vice President None
Dale F. Lampe+ Vice President None
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Elizabeth A. Keeley++ Assistant Vice President Vice President
and Assistant
Secretary
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is 60 State Street, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested
in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of common stock and in connection
with such meeting to comply with the provisions of Section 16(c)
of the Investment Company Act of 1940 relating to shareholder
communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 28th day of April, 1997.
THE DREYFUS/LAUREL FUNDS TRUST
BY: /s/Marie E. Connolly*
______________________________________
Marie E. Connolly, President
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
Signatures Title Date
________________________ ______________________________ __________
/s/Marie E. Connolly* President, Treasurer 04/28/97
- ---------------------------
Marie E. Connolly
/s/Francis P. Brennan* Trustee, 04/28/97
- --------------------------- Chairman of the Board
Francis P. Brennan
/s/Ruth Marie Adams* Trustee 04/28/97
- ---------------------------
Ruth Marie Adams
/s/Joseph S. DiMartino* Trustee 04/28/97
- ---------------------------
Joseph S. DiMartino
/s/James M. Fitzgibbons* Trustee 04/28/97
- ---------------------------
James M. Fitzgibbons
/s/Kenneth A. Himmel* Trustee 04/28/97
- ---------------------------
Kenneth A. Himmel
/s/Stephen J. Lockwood* Trustee 04/28/97
- ---------------------------
Stephen J. Lockwood
/s/Roslyn M. Watson* Trustee 04/28/97
- ---------------------------
Roslyn M. Watson
/s/J. Tomlinson Fort* Trustee 04/28/97
- ---------------------------
J. Tomlinson Fort
/s/Arthur L. Goeschel* Trustee 04/28/97
- ---------------------------
Arthur L. Goeschel
/s/Arch S. Jeffery* Trustee 04/28/97
- ---------------------------
Arch S. Jeffery
/s/John Sciullo* Trustee 04/28/97
- ---------------------------
John Sciullo
*By: Elizabeth Keeley
---------------------------
Attorney-in-Fact
Independent Auditor's Consent
To the Shareholders and Board of Trustees
The Dreyfus/Laurel Funds Trust
We consent to the use of our reports dated February 14, 1997 with respect
to The Dreyfus/Laurel Funds Trust (comprised of Dreyfus Core Value Fund and
Dreyfus Premier Managed Income Fund) incorporated by reference in the
Statements of Additional Information and to the references to our firm under
the headings "Financial Highlights" in the Prospectuses and "Custodian,
Transfer and Dividend Disbursing Agent, Counsel and Independent Auditors" in
the Statements of Additional Information.
KPMG Peat Marwick LLP
New York, New York
April 28, 1997
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