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. 101 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 101 [ 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)
----
on (date) pursuant to paragraph (b)
----
X 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 or about February 28, 1997.
DREYFUS CORE VALUE FUND
Investor, Class R and Institutional Shares
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
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-4
Investment Adviser
29 Principal Underwriters C-12
30 Location of Accounts and Records C-15
31 Management Services C-15
32 Undertakings C-15
PROSPECTUS April 29, 1997
Dreyfus Core Value Fund
DREYFUS CORE VALUE FUND (THE "FUND"), FORMERLY CALLED THE "LAUREL
CAPITAL APPRECIATION 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. (CLASS R SHARES OF THE FUND WERE FORMERLY CALLED TRUST SHARES.)
INVESTOR SHARES AND CLASS R SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES
OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS R SHARES ARE SOLD
PRIMARILY TO BANK TRUST DEPARTMENTS AND OTHER FINANCIAL SERVICE PROVIDERS
(INCLUDING MELLON BANK, N.A. ("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 ("SELECTED
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 APRIL 29, 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.
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.
[Page 1
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 .............................. 22
Dividends, Other Distributions and Taxes........ 22
Performance Information......................... 24
General Information............................. 25
[Page 2
[This Page Intentionally Left Blank]
[Page 3
<TABLE>
<CAPTION>
EXPENSE SUMMARY
Shareholder Transaction Expenses: Investor Shares Class R Shares Institutional Shares
________________ ________________ __________________
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases...... none none none
Maximum Sales Load Imposed on Reinvestments.. none none none
Deferred Sales Load.......................... none none none
Redemption Fee............................... none none none
Exchange Fee................................. none none none
Estimated Annual Fund Operating Expenses:
(as a percentage of net assets)
Management Fee............................... 0.90% 0.90% 0.90%
12b-1 Fee1................................... 0.25% none 0.15%
Other Expenses2.............................. 0.00% 0.00% 0.00%
______ ______ _____
Total Fund Operating Expenses................ 1.15% 0.90% 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: Investor Shares Class R Shares Institutional Shares
________________ ________________ __________________
1 Year $ 12 $ 9 $ 11
3 Years $ 37 $ 29 $ 33
5 Years $ 63 $ 50 $ 58
10 Years $140 $111 $128
</TABLE>
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.")
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 and related notes that appear in
the Fund's Annual Report dated December 31, 1996 and which are incorporated
by reference into the SAI. The financial statements included in the Fund's
Annual Report for the year ended December 31, 1996 have been audited by
____________________, independent auditors, whose report appears in the
Fund's Annual Report. 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.
DREYFUS CORE VALUE FUND
For an Investor Share outstanding throughout each year.(1)
<TABLE>
<CAPTION>
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............. $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 # 0.41 0.42 0.31 0.36 0.39 0.55 0.87 0.54 0.76
Net realized and unrealized gain/
(loss) on investments 8.24 (0.29) 3.86 0.70 4.88 (4.23) 6.12 4.51 (0.41)
___ ___ ___ ___ ___ ___ ___ ___ ___ ___
Total from investment operations 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... (0.45) (0.40) (0.30) (0.36) (0.50) (0.55) (0.55) (0.59) (1.32)
Distributions from net realized
gains on investments (2.63) (2.97) (1.53) (2.64) (0.57) (0.06) (7.60) (1.88) (5.36)
___ ___ ___ ___ ___ ___ ___ ___ ___ ___
Total Distributions... (3.08) (3.37) (1.83) (3.00) (1.07) (0.61) (8.15) (2.47) (6.68)
___ ___ ___ ___ ___ ___ ___ ___ ___ ___
Net asset value, end of period $30.13 $24.56 $27.80 $25.46 $27.40 $23.20 $27.49 $28.65 $26.07
___ ___ ___ ___ ___ ___ ___ ___ ___ ___
___ ___ ___ ___ ___ ___ ___ ___ ___ ___
Total Return.......... 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) _ $401,674 $317,868 $349,813 $423,286 $508,971..$474,998 $640,116 $542,510 $431,630
Ratio of operating expenses to
average net assets.. _ 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.. _ 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% .0.01% .0.01% - - - - - -
Portfolio turnover rate _ 54% 73% 75% 66% 157% 180% 111% 24% 46%
Average commission rate paid* _ _ _ _ _ _ _ _ _ _
</TABLE>
(1) On February 1, 1993, the Fund began offering Institutional Class shares.
Shares outstanding prior to February 1, 1993 were redesignated as Retail
Class shares. Effective April 4, 1994, the Retail shares were 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 November 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and
sales of investment securities.
[Page 5
<TABLE>
<CAPTION>
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*##
__________ __________ __________
<S> <C> <C> <C>
Net asset value, beginning of period _ $24.56 $28.45
______ ______ ______
Income from investment operations:
Net investment income# _ 0.62 0.29
Net realized and unrealized gain/loss on investments _ 8.16 (0.83)
______ ______ ______
Total from investment operations _ 8.78 (0.54)
______ ______ ______
Less distributions:
Distributions from net investment income _ (0.53) (0.38)
Distributions from net realized gains on investments _ (2.63) (2.97)
______ ______ ______
Total Distributions _ (3.16) (3.35)
______ ______ ______
Net asset value, end of period _ $30.18 $24.56
______ ______ ______
______ ______ ______
Total return _ 36.05% (2.31)%###
______ ______ ______
Ratios to average net assets / supplemental data:
Net Assets, end of period (in 000's) ._ $185 $1,070
Ratio of operating expenses to average net assets ._ 0.88% 0.86%**
Ratio of net investment income to average net assets ._ 1.93% 1.72%**
Decrease reflected in above expense ratios
due to undertaking by Dreyfus ._ 0.02% 0.02%
Portfolio turnover rate ._ 54% 73%###
Average commission rate paid***. ._ ._ ._
</TABLE>
* On August 4, 1994, the Fund commenced selling Trust shares. Effective
October 17, 1994, the Trust shares were redesignated as Class R shares.
** 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%.
# Net investment income before the voluntary waiver of fees by the investment
adviser for the year ended December 31, 1994 would have been $0.29.
## 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.
*** For fiscal years beginning November 1, 1995, the Fund is required
to disclose its average commission rate paid per share for purchases and
sales of investment securities.
[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 Fund's Distributor and by Agents that have entered into an
Agreement with the Fund's 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 Fund's 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 NYSE Composite Index.) Options on stock
indexes are similar to options on securities. However, because options on
stock indexes do not involve the delivery of an underlying security, the
option represents the holder's right to obtain from the writer in cash a
fixed multiple of the amount by which the exercise price exceeds (in the case
of a put) or is less than (in the case of a call) the closing value of the
underlying index on the exercise date.
The advisability of using stock index options to hedge against the
risk of market-wide movements will depend on the extent of diversification of
the Fund's stock instruments and the sensitivity of its stock investments to
factors influencing the underlying index. The effectiveness of purchasing or
writing stock index options as a hedging technique will depend upon the
extent to which price movements in the portion of the portfolio being hedged
correlate with price movements in the stock index selected.
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 __________, 1997, Dreyfus managed or administered
approximately $___ 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, which also comprises the Equity Policy Group of
The Boston Company Asset Management, Inc. ("TBCAM"), is responsible for the
management of over $___ billion in pension and institutional equity assets.
TBCAM 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 $___ billion in assets as of
_______________, 1997, including
[Page 11
$___ billion in mutual fund assets. As of ______________, 1997, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $___ billion in assets,
including approximately $___ 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 0.90% 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 FDIHoldings, 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 cl
ass 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." 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 investment s 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, 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 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.
[Page 14
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). 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.
Orders for the purchase of Investor 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 business day (normally
5:15 p.m., New York time) will be based on the public offering price per
share determined at 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
the 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.
[Page 15
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 service, please call 1-800-645-6561 to determine if
it is available and whether any conditions are imposed on its use.
Shareholders are limited to six exchanges out of the Fund during the calendar
year. WITH RESPECT TO CLASS R SHARES HELD BY RETIREMENT PLANS, EXCHANGES MAY B
E 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.
[Page 16
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 ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN
ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND. The
amount you designate, which can be expressed either in terms of a specific
dollar or share amount ($100 minimum), will be exchanged automatically on the
first and/or fifteenth day of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however a sales load may be charged with respect to exchanges of Investor
shares into funds sold with a sales load. The right to exercise this
Privilege may be modified or canceled by the Fund or the Transfer Agent. You
may modify or cancel your exercise of this Privilege at any time by mailing
written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. The Fund may charge a service fee for
the use of this Privilege. No such fee currently is contemplated. The
exchange of shares of one fund for shares of another is treated for Federal
income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder (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
NAVs; 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
[Page 17
cancellation of these Privileges is effective three business days following
receipt. These Privileges are available only for existing accounts and may
not be used to open new accounts. Minimum subsequent investments do not apply
for Dreyfus Dividend Sweep. The Fund may modify or terminate these Privileges
at any time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for Dreyfus Dividend Sweep.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
Fund shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or certain veterans', military or
other payments from the Federal government automatically deposited into your
Fund account. You may deposit as much of such payments as you elect. You
should consider whether Direct Deposit of your entire payment into a fund
with fluctuating NAV, such as the Fund, may be appropriate for you. To enroll
in Dreyfus Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in this Privilege. The appropriate form may be obtained by
calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to
you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase Fund shares
(minimum of $100 per transaction) automatically on a regular basis. Depending
upon the direct deposit program of your employer, you may have part or all of
your paycheck transferred to your existing Dreyfus account electronically
through the ACH system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse side
of the form and return it to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by written notification to your
employer. It is the sole responsibility of 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.
[Page 18
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 net asset value as described below. If you hold
Fund shares of more than one Class, any request for redemption must specify
the Class of shares being redeemed. If you fail to specify the Class of
shares to be redeemed or if you own fewer shares of the Class than specified
to be redeemed, the redemption request may be delayed until the Transfer
Agent receives further instructions from you or your 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 net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the SEC. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK, BY THE DREYFUS TELETRANSFER PRIVILEGE OR
THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE
UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS
TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER
PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-
AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF
YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON
SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE
ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed
until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if the NAV of your account is $500 or
less and remains so during the notice period.
[Page 19
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 or, if
you are a client of a Selected Dealer, through the Selected Dealer. If you have
given your Agent authority to instruct the Transfer Agent to redeem shares and
to credit the proceeds of such redemptions to a designated account at your
Agent, you may redeem shares only in this manner and in accordance with the
regular redemption procedure described below. If you wish to use the other
redemption methods described below, you must arrange with your Agent for
delivery of the required application(s) to the Transfer Agent. Other redemption
procedures may be in effect for clients of certain Agents and institutions. The
Fund makes available to certain large institutions the ability to issue
redemption instructions through compatible computer facilities.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or Telephone Exchange Privilege, which is granted automatically
unless you refuse it, you authorize the Transfer Agent to act on telephone
instructions (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 net asset value may fluctuate.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671, or if for 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
[Page 20
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.
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.
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.
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
[Page 21
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.
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.
[Page 22
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.
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 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 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 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.
[Page 23
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.
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
[Page 24
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 two 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"). 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 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
312/712p042997
[Page 28
PROSPECTUS APRIL 29, 1997
DREYFUS CORE VALUE FUND
Dreyfus Core Value Fund (the "Fund"), formerly called the "Laurel
Capital Appreciation 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 APRIL 29, 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..................................... 18
Dividends, Other Distributions and Taxes.............. 18
Performance Information............................... 20
General Information................................... 21
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.
[Page 1
[This Page Intentionally Left Blank]
[Page 2
<TABLE>
<CAPTION>
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES: INVESTOR SHARES CLASS R SHARES INSTITUTIONAL SHARES
__________________ _________________ ______________________
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases........ none none none
Maximum Sales Load Imposed on Reinvestments.... none none none
Deferred Sales Load............................ none none none
Redemption Fee................................. none none none
Exchange Fee................................... none none none
ESTIMATED ANNUAL FUND OPERATING EXPENSES:
(as a percentage of net assets)
Management Fee................................. .90% .90% 0.90%
12b-1 Fee(1)................................... .25% none 0.15%
Other Expenses(2).............................. 0.00% 0.00% 0.00%
_____ _____ ______
Total Fund Operating Expenses................ 1.15% .90% 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: INVESTOR SHARES CLASS R SHARES INSTITUTIONAL SHARES
__________________ _________________ ______________________
1 Year $ 12 $ 9 $ 11
3 Years $ 37 $ 29 $ 33
5 Years $ 63 $ 50 $ 58
10 Years $140 $111 $128
</TABLE>
(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.")
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS REPRESENTATI
VE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE IN
DICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S AC
TUAL 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 acting on behalf of
customers having a qualified trust or investment account or relationship at su
ch 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 tables below are based upon a single Institutional share outstanding
throughout each fiscal year or period and should be read in conjunction with
the financial statements and related notes 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 _____________________,
independent auditors, whose report appears in the Fund's Annual Report.
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.
<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
Net asset value, beginning of period $24.56 $27.80 $25.96
________ ________ ________ _______
<S> <C> <C> <C> <C>
Income from investment operations:
Net investment income# 0.47 0.47 0.32
Net realized and unrealized gain/loss on investments 8.20 (0.31) 3.38
________ ________ ________ _______
Total from investment operations 8.67 0.16 3.70
________ ________ ________ _______
Less distributions:
Distributions from net investment income (0.48) (0.43) (0.33)
Distributions from net realized gains on investments (2.63) (2.97) (1.53)
________ ________ ________ _______
Total distributions (3.11) (3.40) (1.86)
________ ________ ________ _______
Net asset value, end of period $30.12 $24.56 $27.80
======== ======== ======== ========
Total return 35.60% 0.49% 14.38%
======== ======== ======== ========
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) __ $75,607 $59,435 $79,656
Ratio of operating expenses to average net assets __ 1.03% 1.02% 1.04%**
Ratio of net investment income to average net assets __ 1.53% 1.57% 1.24%**
Decrease reflected in above expense ratios due to
undertakings by Dreyfus __ 0.02% 0.01% ._
Portfolio turnover rate __ 54% 73% 75%
Average commission rate paid### __ __ __ __
</TABLE>
* The Fund commenced selling Institutional shares on February 1, 1993.
** Annualized.
+ Total return represents aggregate total return for the periods
indicated.
++ Without the voluntary reimbursement of expenses and/or waiver of fees
by the investment adviser and/or investment manager, the annualized ratio
of operating expenses to average net assets for the year ended December
31, 1994 and for the period ended December 31, 1993 would have been 1.03%
and 1.04%, respectively.
+++ 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.
# Net investment income per share before the voluntary reimbursement
expenses and/or waiver of fees by the investment adviser, for the year
ended December 31, 1994 and for the period ended December 31, 1993 would
have been $0.46 and $0.31, respectively.
## 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 year beginning November 1, 1995, The Fund is required to
disclose its average commission rate paid per share for purchases and
sales of investment securities.
[Page 4
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 pur
chase 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 capital appreciation and not for short-term
trading profits, in the past the portfolio turnover rate of the Fund has
exceeded 100% and may exceed 100% in the future. 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. In past years the Fund's rate of
portfolio turnover exceeded that of certain other mutual funds with the same
investment objective. A higher rate of portfolio turnover (100% or greater)
involves correspondingly greater brokerage commissions and other expenses
which 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 which, 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 invest
ments 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.
[Page 8
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 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 ___________, 1997, Dreyfus managed or administered
approximately $___ 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, which also comprises the Equity Policy Group of
The Boston Company Asset Management, Inc. ("TBCAM"), is responsible for the
management of over $___ billion in pension and institutional equity assets.
TBCAM 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 $____ billion in assets as of
____________, 1997, including $___billion in mutual fund assets. As of
____________, 1997, Mellon, through various subsidiaries, provided
non-investment services, such as custodial or administration services, for
more than $___ billion in assets, including approximately $____ 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).
[Page 9
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.
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-ADMINISTRAT
OR. 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.
[Page 10
The minimum initial investment is $2,500. Subsequent investments must
be at least $100.
Shares may be purchased by check or wire, through the Dreyfus TELETRAN
SFER Privilege described below. Checks should be made payable to "The Dreyfus
Family of Funds" or, if for Dreyfus retirement plan accounts, to "The Dreyfus
Trust Company, Custodian." Payments which are mailed should be sent to
Dreyfus Core Value Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587.
If you are opening an 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. To purchase Institutional shares in
your name, immediately available funds may be transmitted by wire to Boston
Safe Deposit and Trust Company, 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 (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 andTrust 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 TIN upon
opening or reopening an account. See "Dividends, Other Distributions and
Taxes" and the Fund's Account Application for further infor-
[Page 11
mation 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:
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 at the close of the New York Stock Exchange
("NYSE") on each day that the NYSE is open (a "business day"). Investments
and requests to exchange or redeem shares received by the Transfer Agent
before the close of regular trading on the NYSE (usually 4 p.m., Eastern
Time) are effective on, and will receive the price determined, that day.
Investment, exchange or redemption requests received after close of business
are effective on, and receive the first share price determined on, the next
business day.
Orders for the purchase of Institutional shares received by dealers
by the close of trading on the floor the NYSE on any business day and
transmitted to the Distributor or its designee by the close of business day
(normally 5:15 p.m., New York time) will be based on the public offering
price per share determined as 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 the business day.
The public offering price of Institutional shares is the NAV of that
class.
The public offering price of Investor shares and Class R shares, both
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
[Page 12
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 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 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
[Page 13
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
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
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 another fund 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
[Page 14
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 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. 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 speci
fied 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.
[Page 15
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 THROU
GH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTIO
N REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED T
O YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFE
R PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGH
T 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 AS
SET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHER
WISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTI
ON REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH S
HARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTH
ER 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 Priv
ilege. 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-
[Page 16
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.
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 P
rivilege 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.
[Page 17
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 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, and Dreyfus Service
Corporation, an affiliate of Dreyfus, for shareholder servicing activities.
The Plan allows the Distributor to make payments from the Rule 12b-1 fees it
collects from the Fund to compensate Agents that have entered into 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
[Page 18
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 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.
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.
[Page 19
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 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. Advertisem
ents of the Fund's performance will include the Fund's average annual total
return for one, five and ten year periods, or for shorter periods depending
upon the length of time during which the Fund has operated. Computations of
average annual total return for periods of less than one year represent an
annualization of the Fund's actual total return for the applicable period.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and other distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the 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, INSTITUTION
AL 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.
[Page 20
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 two 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. The Company's Agreement and Declaration of Trust permits the Board
of Trustees to create an unlimited number of investment portfolios (each a
"fund"). 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 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 R
EPRESENTATIONS 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 R
ELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CON
STITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFERIN
G MAY NOT LAWFULLY BE MADE.
[Page 21
[This Page Intentionally Left Blank]
[Page 22
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[Page 23
Core Value
Fund _
Institutional Shares
Prospectus
Registration Mark
Copy Rights 1997 Dreyfus Service Corporation
392p042997
[Page 24
DREYFUS CORE VALUE FUND
INVESTOR, INSTITUTIONAL AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
April 29, 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
April 29, 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-18
Management Arrangements B-24
Purchase of Fund Shares B-26
Distribution Plan B-27
Redemption of Fund Shares B-28
Shareholder Services B-29
Determination of Net Asset Value B-33
Dividends, Other Distributions and Taxes B-33
Portfolio Transactions B-38
Performance Information B-40
Information About the Fund B-41
Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors B-42
Financial Statements B-43
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 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 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 financial futures
contracts (such as index futures contracts), options (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 and futures 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 or
futures position will not track the performance of the Fund's other
investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the Fund's
investments well. Options and futures prices 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
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The Fund may purchase or
sell options and futures 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 or futures 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.
Futures Contracts and Options on Futures Contracts. When the Fund
purchases a futures contract, it incurs an obligation to take delivery of a
specified amount of the obligation underlying the futures contract at a
specified time in the future for a specified price. When the Fund sells a
futures contract, it incurs an obligation to deliver a specified amount of
the obligation underlying the futures contract at a specified time in the
future for an agreed upon price. With respect to index futures, no physical
transfer of the securities underlying the index is made. Rather, the parties
settle by exchanging in cash an amount based on the difference between the
contract price and the closing value of the index on the settlement date.
When the Fund writes an option on a futures contract, it becomes
obligated, in return for the premium paid, to assume a position in a futures
contract at a specified exercise price at any time during the term of the
option. If the Fund has written a call, it assumes a short futures position.
If the Fund has written a put, it assumes a long futures position. When the
Fund purchases an option on a futures contract, it acquires the right, in
return for the premium it pays, to assume a position in a futures contract (a
long position if the option is a call and a short position if the option is a
put).
The purchase of futures or call options on futures can serve as a long
hedge, and the sale of futures or the purchase of put options on futures can
serve as a short hedge. Writing call options on futures contracts can serve
as a limited short hedge, using a strategy similar to that used for writing
call options on securities or indices. Similarly, writing put options on
futures contracts can serve as a limited long hedge.
No price is paid upon entering into a futures contract. Instead, at the
inception of a futures contract the Fund is required to deposit "initial
margin" consisting of cash or U.S. Government Securities in an amount
generally equal to 10% or less of the contract value. Margin must also be
deposited when writing a call or put option on a futures contract, in
accordance with applicable exchange rules. Unlike margin in securities
transactions, initial margin on futures contracts does not represent a
borrowing, but rather is in the nature of a performance bond or good-faith
deposit that is returned to the Fund at the termination of the transaction if
all contractual obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, the Fund may be required
by an exchange to increase the level of its initial margin payment.
Subsequent "variation margin" payments are made to and from the futures
broker daily as the value of the futures position varies, a process known as
"marking-to-market." Variation margin does not involve borrowing, but rather
represents a daily settlement of the Fund's obligations to or from a futures
broker. When the Fund purchases an option on a future, the premium paid plus
transaction costs is all that is at risk. In contrast, when the Fund
purchases or sells a futures contract or writes a call or put option thereon,
it is subject to daily variation margin calls that could be substantial in
the event of adverse price movements. If the Fund has insufficient cash to
meet daily variation margin requirements, it might need to sell securities at
a time when such sales are disadvantageous.
Purchasers and sellers of futures contracts and options on futures can
enter into offsetting closing transactions, similar to closing transactions
on options, by selling or purchasing, respectively, an instrument identical
to the instrument purchased or sold. Positions in futures and options on
futures may be closed only on an exchange or board of trade that provides a
secondary market. Although the Fund intends to enter into futures and
options on futures only on exchanges or boards of trade where there appears
to be a liquid secondary market, there can be no assurance that such a market
will exist for a particular contract at a particular time. In such event, it
may not be possible to close a futures contract or options position.
Under certain circumstances, futures exchanges may establish daily
limits on the amount that the price of a futures or an option on a futures
contract can vary from the previous day's settlement price; once that limit
is reached, no trades may be made that day at a price beyond the limit.
Daily price limits do not limit potential losses because prices could move to
the daily limit for several consecutive days with little or no trading,
thereby preventing liquidation of unfavorable positions.
If the Fund were unable to liquidate a futures or options on futures
position due to the absence of a liquid secondary market or the imposition of
price limits, it could incur substantial losses. The Fund would continue to
be subject to market risk with respect to the position. In addition, except
in the case of purchased options, the Fund would continue to be required to
make daily variation margin payments and might be required to maintain the
position being hedged by the future or option or to maintain cash or
securities in a segregated account.
To the extent that the Fund enters into futures contracts, options on
futures contracts, or options on foreign currencies traded on an exchange
regulated by the CFTC, in each case other than for bona fide hedging purposes
(as defined by the CFTC), the aggregate initial margin and premiums required
to establish those positions (excluding the amount by which options are "in-
the-money" at the time of purchase) will not exceed 5% of the liquidation
value of the Fund's portfolio, after taking into account unrealized profits
and unrealized losses on any contracts the Fund has entered into. This
policy does not limit to 5% the percentage of the Fund's assets that are at
risk in futures contracts and options on futures contracts.
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.
Swaps, Caps, Collars and Floors. Swap agreements, including interest
rate, equity index and currency swaps, caps, collars and floors, may be
individually negotiated and structured to include exposure to a variety of
different types of investments or market factors. Swaps involve two parties
exchanging a series of cash flows at specified intervals. In the case of an
interest rate swap, the parties exchange interest payments based on an agreed
upon principal amount (referred to as the "notional principal amount").
Under the most basic scenario, Party A would pay a fixed rate on the notional
principal amount to Party B, which would pay a floating rate on the same
notional principal amount to Party A. Depending on their structure, swap
agreements may increase or decrease the Fund's exposure to long or short-term
interest rates (in the U.S. or abroad), foreign currency values, mortgage
securities, corporate borrowing rates, or other factors. Swap agreements can
take many different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate falls
below an agreed-upon level. An interest rate collar combines elements of
buying a cap and selling a floor.
The Fund will set aside cash or appropriate liquid assets to cover its
current obligations under swap transactions. If the Fund enters into a swap
agreement on a net basis (that is, the two payment streams are netted out,
with the Fund receiving or paying, as the case may be, only the net amount of
the two payments), the Fund will maintain cash or liquid assets with a daily
value at least equal to the excess, if any, of the Fund's accrued obligations
under the swap agreement over the accrued amount the Fund is entitled to
receive under the agreement. If the Fund enters into a swap agreement on
other than a net basis or writes a cap, collar or floor, it will maintain
cash or liquid assets with a value equal to the full amount of the Fund's
accrued obligations under the agreement.
The most important factor in the performance of swap agreements is the
change in the specific interest rate, currency or other factor(s) that
determine the amounts of payments due to and from the Fund. If a swap
agreement calls for payments by the Fund, the Fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declines, the value of a swap agreement would likely decline, potentially
resulting in losses.
The Fund will enter into swaps, caps, collars and floors only with banks
and recognized securities dealers believed by Dreyfus to present minimal
credit risks in accordance with guidelines established by the Trust's Board
of Trustees. If there is a default by the other party to such a transaction,
the Fund will have to rely on its contractual remedies (which may be limited
by bankruptcy, insolvency or similar laws) pursuant to the agreement relating
to the transaction.
The Fund understands that it is the position of the staff of the SEC
that assets involved in swap transactions are illiquid and, therefore, are
subject to the limitations on illiquid investments.
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/Feed Option. The Company may in the future seek to achieve a
Fund's investment objective by investing all of the Fund's assets in another
investment company having the same investment objective and substantially the
same investment policies and restrictions as those applicable to such Fund.
Shareholders of a Fund will be given at least 30 days' prior notice of any
such investment. Such investment would be made only if the Directors
determine it to be in the best interest of a Fund and its shareholders. In
making that determination, the Directors will consider, among other things,
the benefits to shareholders and/or the opportunity to reduce costs and
achieve operational efficiencies. Although the Funds believe that the
Directors 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
The following shareholder(s) owned 5% or more of the outstanding
Institutional shares of the Fund at __________, 1997.
The following shareholder(s) owned 5% or more of the outstanding
Investor shares of the Fund at __________, 1997.
The following shareholder(s) owned 5% or more of the outstanding Class R
shares of the Fund at __________, 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. Director of the Company; Professor of English and Vice
President Emeritus, Dartmouth College; Senator, United Chapters of Phi
Beta Kappa; Trustee, Woods Hole Oceanographic Institution; 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 Directors and Assistant
Treasurer of the Company; Director and Chairman, Massachusetts Business
Development Corp. and Director, Access Capital Strategic Community
Investment Fund, Inc. - Bank Portfolio. Age: 79 years old. Address:
Massachusetts Business Development Corp., One Liberty Square, Boston,
Massachusetts 02109.
o*JOSEPH S. DiMARTINO. Director of the Company since February 1995. Since
January 1995, Mr. DiMartino has served as Chairman of the Board of
various funds in the Dreyfus Family of Funds. Director, Access Capital
Strategic Community Investment Fund, Inc. - Institutional Investment
Portfolio and Bank Portfolio. 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 161
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. Age: 53 years old.
Address: 200 Park Avenue, New York, New York 10166.
o+JAMES M. FITZGIBBONS. Director of the Company; 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.; 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. Director of the Company; Partner, Reed, Smith, Shaw &
McClay (law firm). 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. Director of the Company; 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; 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. Director of the Company; 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.; Director, Access Capital Strategic Community Investment
Fund, Inc. - Bank Portfolio; Managing Partner, Franklin Federal
Partners. Age: 49 years old. Address: Himmel and Company, Inc., 399
Boylston St., 11th Floor, Boston, Massachusetts 02116.
o*ARCH S. JEFFERY. Director of the Company; Financial Consultant. 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. Director of the Company; President and CEO, LDG
Management Company Inc.; CEO, LDG Reinsurance Underwriters, SRRF
Management Inc. and Medical Reinsurance Underwriters Inc.; 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. Director of the Company; Dean Emeritus and Professor of
Law, Duquesne University Law School; Director, Urban Redevelopment
Authority of Pittsburgh; 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. Director of the Company; Principal, Watson Ventures;
Director, American Express Centurion Bank; Director, Harvard/Pilgrim
Community Health Plan, Inc.; Director, Access Capital Strategic
Community Investment Fund, Inc. - Bank Portfolio; Director,
Massachusetts Electric Company; Director, The Hyams 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.
#ELIZABETH BACHMAN. Vice President and Assistant Secretary of the Company,
The Dreyfus/Laurel Funds Trust 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.
#MARIE E. CONNOLLY. President and Treasurer of the Company, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since September 1994); Vice President of the Company, The
Dreyfus/Laurel Funds Trust 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 Company,
The Dreyfus/Laurel Funds Trust 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. Prior to December 1991, Mr. Conroy attended
Merrimack College where he received a bachelors degree in Business
Administration. Age: 27 years old. Address: 60 State Street, Boston,
Massachusetts 02109.
#RICHARD W. INGRAM, Vice President and Assistant Treasurer of the Company,
The Dreyfus/Laurel Funds Trust 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 Company, The
Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel Tax-Free Municipal
Funds (since October 1996). Senior Paralegal of the Distributor. 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.
#MARY A. NELSON, Vice President and Assistant Treasurer of the Company, The
Dreyfus/Laurel Funds Trust 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 Company, The
Dreyfus/Laurel Funds Trust 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); Associate, Sidley & Austin (June 1989 to August 1990).
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 the Distributor. From December, 1989 through November, 1996 he was
employed with GE Investments 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
Company, The Dreyfus/Laurel Funds Trust 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 _____, 1997.
No officer or employee of Premier (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 Trust# Board Member****
-------------- -------------------
Ruth Marie Adams $ _____ $_______
Francis P. Brennan* ______ _______
James M. Fitzgibbons ______ _______
Joseph S. DiMartino** ______ _______***
J. Tomlinson Fort** ______ none
Arthur L. Goeschel ______ _______
Kenneth A. Himmel ______ _______
Arch S. Jeffery** none none
Stephen J. Lockwood ______ _______
John J. Sciullo ______ _______
Roslyn M. Watson ______ _______
# 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 $_____ 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.
** Joseph S. DiMartino, J. Tomlinson Fort and Arch S. Jeffery are 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 $_____, $_____ and $_____, respectively, and for serving as
a Board member of all funds in the Dreyfus/Laurel Funds (including the Trust)
were $______, $______ and $______, respectively. In addition, Dreyfus
reimbursed Messrs. DiMartino, Fort and Jeffery a total of $___ for expenses
attributable to the Trust's Board meetings is not included in the $_____
amount noted above.
*** Amount paid to Joseph S. DiMartino from the funds in the Fund Complex for
the fiscal year ended December 31, 1996.
****The Dreyfus Family of Funds consists of 161 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; William F. Glavin, Jr., Vice
President-Corporate Development; 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 1995 1 1994
Advisory and/or $3,796,468 $3,413,996
Management Fee
________________
1 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 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 years ended December 31, 1996 and December 31, 1995, the
Fund paid $_________, $909,513 of which was paid to the Distributor and
$898,724 of which was paid to Dreyfus Service Corporation pursuant to the
Plan with respect to Investor shares. For the fiscal year ended December 31,
1996 and 1995, the Fund paid $_______, $________ of which was paid to the
Distributor and $_______ of which was paid to Dreyfus Service Corporation.
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 and Class R shares of the Fund may be
exchanged for shares of the same or a comparable class of certain other funds
advised or administered by Dreyfus. Institutional shares 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 Service 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 Service 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 and Class R shares
of the Fund, shares of the same Class of another fund in the Dreyfus Family
of Funds, and in exchange for Institutional shares of the Fund, shares of
another fund 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, from Investor or Class R shares of the Fund in shares
of the same Class of another fund in the Dreyfus Family of Funds of which the
investor is a shareholder and from Institutional shares of the Fund into
another fund 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,
1994 and 1993 were $1,025,551, and $716,054, respectively and for the six
month period ending December 31, 1995 were $331,739. The brokerage
concession on transactions for the six month period 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 _______% 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 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 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 [two] portfolios of the Trust.
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 Auditor's Report thereon, are incorporated herein
by reference.
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. 90.
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. 62.
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
________________, 1997:
Number of Record Holders
Investor Class R Institutional
Title of Class Shares Shares Shares
- -------------- ------- ------- -------------
Dreyfus Core Value Fund
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*;
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
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.
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
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.
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 Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus S&P 500 Index Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Stock Index Fund, Inc.
67) Dreyfus Tax Exempt Cash Management
68) The Dreyfus Third Century Fund, Inc.
69) Dreyfus Treasury Cash Management
70) Dreyfus Treasury Prime Cash Management
71) Dreyfus Variable Investment Fund
72) Dreyfus Worldwide Dollar Money Market Fund, Inc.
73) General California Municipal Bond Fund, Inc.
74) General California Municipal Money Market Fund
75) General Government Securities Money Market Fund, Inc.
76) General Money Market Fund, Inc.
77) General Municipal Bond Fund, Inc.
78) General Municipal Money Market Fund, Inc.
79) General New York Municipal Bond Fund, Inc.
80) General New York Municipal Money Market Fund
81) Premier Insured Municipal Bond Fund
82) Premier California Municipal Bond Fund
83) Premier Equity Funds, Inc.
84) Premier Global Investing, Inc.
85) Premier GNMA Fund
86) Premier Growth Fund, Inc.
87) Premier Municipal Bond Fund
88) Premier New York Municipal Bond Fund
89) Premier State Municipal Bond Fund
90) Premier Strategic Growth Fund
91) Premier Value 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 One Exchange Place, 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 Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares 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 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 25th day of February, 1997.
THE DREYFUS/LAUREL FUNDS, INC.
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 02/25/97
- ---------------------------
Marie E. Connolly
/s/Francis P. Brennan* Trustee, 02/25/97
- --------------------------- Chairman of the Board
Francis P. Brennan
/s/Ruth Marie Adams* Trustee 02/25/97
- ---------------------------
Ruth Marie Adams
/s/Joseph S. DiMartino* Trustee 02/25/97
- ---------------------------
Joseph S. DiMartino
/s/James M. Fitzgibbons* Trustee 02/25/97
- ---------------------------
James M. Fitzgibbons
/s/Kenneth A. Himmel* Trustee 02/25/97
- ---------------------------
Kenneth A. Himmel
/s/Stephen J. Lockwood* Trustee 02/25/97
- ---------------------------
Stephen J. Lockwood
/s/Roslyn M. Watson* Trustee 02/25/97
- ---------------------------
Roslyn M. Watson
/s/J. Tomlinson Fort* Trustee 02/25/97
- ---------------------------
J. Tomlinson Fort
/s/Arthur L. Goeschel* Trustee 02/25/97
- ---------------------------
Arthur L. Goeschel
/s/Arch S. Jeffery* Trustee 02/25/97
- ---------------------------
Arch S. Jeffery
/s/John Sciullo* Trustee 02/25/97
- ---------------------------
John Sciullo
*By:
---------------------------
Attorney-in-Fact
