<PAGE>
Dreyfus
Core Value
Fund
Annual Report
December 31, 1996
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
The following letter to shareholders of the Dreyfus Core Value Fund is the
first to be signed by Valerie Sill who became the spokesperson for the Fund, a
team-managed product, in November 1996.
Valerie is a portfolio manager of The Dreyfus Corporation. She joined The
Boston Company in 1994 where she is a portfolio manager for both balanced and
value equity accounts. She also is a member of The Boston Company's Equity
Policy Group. Most recently she was The Boston Company's director of research.
Prior to joining the company, she served as a portfolio manager and analyst at
Investment Advisors, Inc. in Minneapolis. She also worked as a healthcare and
utilities analyst at State Street Research & Management Company in Boston.
Valerie graduated from Wellesley College with a bachelor's degree, magna
cum laude, in economics and philosophy. She holds an MBA from Harvard Business
School and was awarded the CFA Charter in 1993.
Sincerely,
Stephen E. Canter
Chief Investment Officer
The Dreyfus Corporation
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report that Dreyfus Core Value Fund earned a competitive
return for the fiscal year ended December 31, 1996. For that twelve-month
period, the total return for the Fund's Investor shares was 21.44%, for
Institutional shares was 21.57% and for Class R shares was 21.74%.* These
results compare closely with the total return of 22.95% for the Standard &
Poor's 500 Composite Stock Price Index ("S&P 500") for the same period.**
THE ECONOMY
The much-heralded "Goldilocks" phase of the U.S. economy--not too hot and
not too cold--may be ending. First, the slowdown to 2% GDP growth seems to have
been confined to the summer and recent data depict faster growth for the fourth
quarter of 1996. Second, inflation has begun a cyclical climb, although there is
yet little linkage to the tight labor market. The economy is operating with very
little slack near the close of its sixth year of expansion. Hence, the
resumption of faster growth quickly restored a rising trend to bond yields and
pulled short-term rates above their December lows. As yet there is little
expectation of tighter Federal Reserve policy, although sustained above-trend
growth would probably justify higher rates during 1997. Modest tightening in
1997 would in our opinion help allay inflation fears and sustain another year of
economic growth.
Although the economy grew near its 2.4% long-term trend rate in 1996, it
was nonetheless quite volatile during the year. After a strong first half, and
then the summer slowdown, the return to faster growth late in the year is not
broad-based. Strong sectors are in manufacturing, exports, services and
construction. By contrast, some retailers found Christmas sales disappointing
and capital goods orders are mixed. However, inventories are quite lean and this
tilts the odds towards yet another year of growth in 1997. While corporate
profit growth slowed in 1996, profits still tended to surprise on the upside and
should maintain steady growth in 1997 too.
Accelerating wage growth in 1996 did not fuel higher prices. And surging
energy prices have failed to lift inflation elsewhere. Indeed, core inflation
(excluding food and energy) decelerated last year. The general price structure
has so far ignored the higher oil price, responding to it as temporary. However,
oil prices have been rising now for a year and, at some point, their ability to
raise the overall price level may become worrisome, especially if the Fed finds
them significant.
Both long-term and short-term interest rates were quite volatile in 1996.
The strength of the economy prompted rising rates through summer's end, but bond
yields then fell 90 basis points after the economy slowed. That period of low
rates may have ended now that faster growth is again apparent.
We believe the economy has reverted to a period of growth above the
long-term average. Key issues are whether faster growth will fuel higher
inflation and at what point rising oil prices would disturb price stability. The
economy will shortly begin a seventh expansion year and continued volatility in
growth and in sentiment is likely.
THE MARKET
The stock market in 1996 was a mixture of agony and ecstasy, with the
accent for most of the year on the more desirable of those two alternatives. By
the end of the year, the S&P 500 had registered a gain of 22.95%, while the blue
chip Dow Jones Industrial Average ("DJIA") gained 28.91%.*** The road leading to
those impressive year-end gains was not a smooth one, however.
The market year began haltingly, in the wake of shaky business conditions
at the end of the previous year. As 1996 unfolded, however, the market picked up
steam. The economy took on characteristics that continued for much of the
year--low inflation, moderate growth and relatively low interest rates. This was
a combination that investors liked, perhaps too much. By midyear, satisfaction
with the economy turned into fear that economic growth might be overdone.
<PAGE>
The prevailing nervousness about potential inflation served to boost
interest rates temporarily, without the need for Federal Reserve intervention.
This was a temporary setback for large capitalization stocks, but more damaging
to Nasdaq issues and particularly to the smaller capitalization stocks measured
by the Russell 2000 Index.
As summer turned into fall, interest rates eased and inflation remained at
bay. The benign economic environ-ment allowed many stocks to resume their upward
course, causing a string of record-breaking performances by the DJIA and other
broad market indexes. In mid-fall the prospect that government would continue
divided in Washington, with a Democratic President and a Republican-controlled
Congress, appeared to be another plus factor for the market. Stocks continued to
surge, hardly pausing for breath when Chairman Alan Greenspan raised a caution
signal in early December by referring to "irrational exuberance" in the equity
markets.
Stock market veterans issued a stream of warnings that what goes up so
strongly and consistently must, at some point, come down. Nonetheless, a fairly
steady flow of new money coming into stocks from people putting money aside for
retirement seemed to be fueling the boom. While at the very end of the year,
caution caused a softening of stock prices, which backed away from the year's
record of 6560.91 on the DJIA, that record was surpassed in early 1997, when the
average surpassed 6700.
Among the best performing groups for 1996 were oil drillers,
semi-conductors, computers, financial enterprises and consumer nondurables.
Corporate earnings were very strong for much of the year, but showed signs of
flagging as the year wore on. This raised questions in the minds of many market
observers whether the scorching pace of the past year could be maintained.
PORTFOLIO HIGHLIGHTS
The domestic equity portion of the Fund (but not the whole Fund)
outperformed the S&P 500 during 1996. The Fund's overweight positions, compared
to the S&P 500, in consumer services and financial services contributed
significantly to performance. Stock selections in energy and transportation were
also helpful. The Fund's underweightings in technology and capital goods
detracted, however, from the year's results. The best performing stocks during
the year included BankAmerica, Woolworth, Novartis, Nokia and Lucent
Technologies. Digital Equipment and Horizon Healthcare detracted from the Fund's
performance.
The fact that the Fund slightly trailed the S&P 500 during 1996 was due
mainly to the Fund's international investments. This sector, representing
approximately 7% of the Fund's assets, did not keep up with the booming U.S.
equity market.
We appreciate the opportunity to serve your investment needs and look
forward to another rewarding year in 1997.
Sincerely,
Valerie J. Sill
Portfolio Manager
January 15, 1997
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC.--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index
of U.S. stock market performance.
***The Dow Jones Industrial Average (DJIA) is a price-weighted average of
30 actively traded blue chip stocks.
<PAGE>
Dreyfus Core Value Fund December 31, 1996
- ------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS CORE VALUE FUND INVESTOR SHARES AND
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
.......................... Insert Chart Plot Points .........................
$41,396
Standard & Poor's 500
Composite Stock Price Index
$31,896
Dreyfus Core Value Fund
(Investor Shares)
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investor Shares Institutional Shares
- ------------------------------- ---------------------------------
Period Ended 12/31/96 Period Ended 12/31/96
- --------------------- ---------------------
<S> <C> <C> <C>
1 Year 21.44% 1 Year 21.57%
5 Years 14.89 From Inception (2/1/93) 17.73
10 Years 12.30
</TABLE>
<TABLE>
<CAPTION>
Class R Shares
- ------------------------------
Period Ended 12/31/96
- ---------------------
<S> <C>
1 Year 21.74%
From Inception (8/4/94) 22.09
<FN>
- ----------------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Investor shares of Dreyfus
Core Value Fund on 12/31/86 to a $10,000 investment made in the Standard &
Poor's 500 Composite Stock Price Index on that date. All dividends and capital
gain distributions are reinvested. Performance for Institutional and Class R
shares will vary from the performance of Investor shares shown above due to
differences in charges and expenses.
The Fund's performance shown in the line graph takes into account all applicable
fees and expenses. The Standard & Poor's 500 Composite Stock Price Index is a
widely accepted, unmanaged index of overall stock market performance, which does
not take into account charges, fees and other expenses. Further information
relating to Fund performance, including expense reimbursements, if applicable,
is contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
</TABLE>
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments December 31, 1996
<TABLE>
<CAPTION>
Common Stocks--96.6% Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Aerospace & Military Technology--.0% C.S.F. (Thompson)........................ 8,805 $000,285,526
------------
Appliances--1.5% Hitachi Koki............................. 40,000 286,480
Philips Electronics NV, ADR.............. 196,500 7,860,000
Tarkett.................................. 10,000 199,221
Sony..................................... 5,000 327,862
------------
8,673,563
------------
Automobiles--.3% Bayerische Motoren Werke................. 540 376,003
Fiat Spa................................. 45,000 135,504
Honda Motor.............................. 12,000 343,153
Toyota Motor............................. 20,000 575,378
Volvo.................................... 10,000 217,500
------------
1,647,538
------------
Banking--1.0% ABN-Amro................................. 5,051 328,454
Abbey National........................... 26,000 340,616
Affin Holdings Berhad.................... 103,000 283,449
Australia & New Zealand Banking.......... 30,000(a) 189,130
Banco BHIF, ADR.......................... 5,500 90,063
Banco Comercial Portugues................ 7,000 158,170
Banco Comercial Portugues, ADR........... 3,000 39,375
Bangkok Bank Public...................... 7,000 67,680
CLF-DEXIA France......................... 3,000 261,272
Christiania Bank......................... 65,000 206,058
Commonwealth Bank of Australia,
Instalment Receipt..................... 29,400 183,010
Corporacion Bancaria de Espana, ADR...... 20,000 450,000
Creditanstalt-Bankverein................. 1,200 155,268
Dah Sing Financial....................... 10,600 43,033
Deutsche Bank............................ 10,000 466,580
Development Bank of Singapore............ 27,000 364,500
Espirito Santo Financial, ADR............ 5,000 66,250
HSBC..................................... 11,396 243,847
Istituto Mobiliare Italiano, ADR......... 10,400 269,100
Kookmin Bank, ADR........................ 3,400(a,b) 63,512
National Westminster Bank................ 55,736 654,773
PT Bank Bali............................. 35,000 87,426
Philippine National Bank................. 4,500(a) 53,470
Schweizerischer Banksverein.............. 2,400 455,311
Societe Generale......................... 3,881 419,507
------------
5,939,854
------------
Basic Industries--5.9% Alumax................................... 64,800(a) 2,162,700
Bethlehem Steel.......................... 156,000(a) 1,404,000
BetzDearborn............................. 63,900 3,738,150
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Basic Industries (continued) Great Lakes Chemical..................... 50,000 $ 2,337,500
IMC Global............................... 68,400 2,676,150
James River.............................. 233,500 7,734,688
Louisiana Pacific........................ 93,000 1,964,625
Mallinckrodt............................. 57,300 2,528,362
Reynolds Metals.......................... 80,500 4,538,188
Tenneco.................................. 100,000 4,512,500
------------
33,596,863
------------
Beverages & Tobacco--.1% Imperial Tobacco, ADR.................... 6,250 79,688
Mikuni Coca Cola......................... 27,000 349,892
------------
429,580
------------
Broadcasting & Publishing--.0% Marieberg Tidnings....................... 10,000 244,152
------------
Building Materials--.1% Barlow................................... 3,000 26,608
Barlow, ADR.............................. 6,000 52,875
Boral.................................... 130,679 371,926
Cimpor-Cimentos de Portugal.............. 2,200 47,332
Sekisui Chemical......................... 14,000 141,512
------------
640,253
------------
Capital Goods--5.1% Blue Square Chain Stores................. 8,000(a) 62,716
Controladora Comercial Mexicana, ADR..... 3,600 64,350
Ingersoll-Rand........................... 49,000 2,180,500
Litton Industries........................ 52,500(a) 2,500,313
Lockheed Martin.......................... 66,400 6,075,600
Newport News Shipbuilding................ 20,000 300,000
Nokia, ADR............................... 180,900 10,424,362
Raytheon................................. 154,600 7,440,125
------------
29,047,966
------------
Chemicals--.7% AKZO Nobel NV, ADR....................... 2,700 182,250
Bayer.................................... 10,000 407,528
Imperial Chemical Industries, ADR........ 50,500 2,626,000
Jilin Chemical Industrial, ADR........... 2,100 30,712
Polifin.................................. 25,000 41,676
Reliance Industries, ADR................. 4,000(b) 48,000
Rhone-Poulenc, ADR....................... 9,327 315,952
Sasol.................................... 4,000 47,446
Srithai Superware........................ 12,000 71,470
------------
3,771,034
------------
Construction/Housing--.2% Chudenko................................. 6,450 186,117
Hollandsche Beton Groep.................. 1,500 310,587
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Construction/Housing (continued) Nishimatsu Construction.................. 40,000 $ 349,028
Sekisui House............................ 40,000 407,775
------------
1,253,507
------------
Consumer Durables--1.3% Cooper Tire & Rubber..................... 187,100 3,695,225
Maytag................................... 181,500 3,584,625
Perusahaan Otomobil Nasional Berhad...... 9,400 59,553
------------
7,339,403
------------
Consumer Non-durables--10.9% Archer-Daniels-Midland................... 300,000 6,600,000
Fruit of the Loom, Cl. A................. 111,200(a) 4,211,700
Harcourt General......................... 82,400 3,800,700
Hasbro................................... 124,400 4,836,050
Kimberly Clark........................... 48,200 4,591,050
Loews.................................... 45,200 4,260,100
McGraw Hill Cos.......................... 137,800 6,356,025
Philip Morris Cos........................ 64,400 7,253,050
Polaroid................................. 190,000 8,265,000
RJR Nabisco Holdings..................... 162,500 5,525,000
Rubbermaid............................... 168,000 3,822,000
Tupperware............................... 46,600 2,498,925
------------
62,019,600
------------
Consumer Services--14.6% ACNielsen................................ 154,800 2,341,350
Ara...................................... 21,000(a) 47,939
Block (H & R)............................ 196,900 5,710,100
Browning-Ferris Industries............... 185,000 4,856,250
Cognizant................................ 145,700 4,808,100
Darden Restaurants....................... 261,000 2,283,750
Deluxe................................... 171,000 5,600,250
Dillard Department Stores, Cl. A......... 70,000 2,161,250
Dun & Bradstreet......................... 150,700 3,579,125
Footstar................................. 93,340 2,321,833
ITT...................................... 170,100 7,378,087
Kroger................................... 91,000(a) 4,231,500
New York Times, Cl. A.................... 117,000 4,446,000
News, ADR................................ 95,000 1,983,125
Pittston Brinks.......................... 108,200 2,921,400
Rite Aid................................. 143,100 5,688,225
Tandy.................................... 70,500 3,102,000
Toys R Us................................ 259,300(a) 7,779,000
Waban.................................... 53,000(a) 1,378,000
Woolworth ............................... 474,000(a) 10,368,750
------------
82,986,034
------------
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Data Processing--.1% Canon.................................... 20,000 $ 442,333
------------
Electrical & Electronics--1.0% Alcatel Alsthom, ADR..................... 199,916 3,198,656
Hitachi.................................. 53,000 494,514
Hongkong Electric........................ 100,000 332,277
Mabuchi Motor............................ 7,000 352,570
Murata Manufacturing..................... 15,400 512,225
QPL International........................ 55,000 42,666
Siemens.................................. 7,000 329,332
Toshiba.................................. 60,000 377,365
------------
5,639,605
------------
Energy--6.8% British Petroleum, ADR................... 35,600 5,032,950
Coastal.................................. 50,800 2,482,850
Dresser Industries....................... 118,900 3,685,900
ENI S.p.A, ADR........................... 6,500 335,563
Elf Aquitaine............................ 3,193 290,569
Elf Aquitaine, ADR....................... 186,158 8,423,650
Exxon.................................... 54,000 5,292,000
Fletcher Challenge Energy................ 65,000 188,202
Mobil.................................... 40,600 4,963,350
Petronas Dagangan Berhad................. 20,000 51,475
Repsol................................... 8,000 306,697
Repsol, ADR.............................. 7,000 266,875
Tosco.................................... 43,626 4,470,562
Ultramar Diamond Shamrock................ 78,800 2,492,050
YPF Sociedad Anonima, ADR................ 19,000 479,750
------------
38,762,443
------------
Financial Services--19.6% AMMB Holdings Berhad..................... 6,000 50,366
Aetna.................................... 141,400 11,312,000
Allmerica Financial...................... 80,100 2,683,350
Allstate................................. 125,600 7,269,100
American Express......................... 88,000 4,972,000
American International................... 27,050 2,928,163
Bancorp Hawaii........................... 61,200 2,570,400
Bank of Boston........................... 121,390 7,799,308
BankAmerica.............................. 80,430 8,022,892
CIGNA.................................... 57,200 7,814,950
Chubb.................................... 97,000 5,213,750
Commonwealth Bank of Australia........... 1,437 13,755
Credit Saison............................ 25,000 559,395
Dean Witter, Discover & Co............... 84,000 5,565,000
Equitable Cos............................ 175,100 4,311,838
Everest Reinsurance...................... 138,200 3,973,250
Great Western Financial.................. 86,300 2,502,700
Grupo Financiero Inbursa................. 20,000 68,231
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Financial Services (continued) ING Groep................................ 4,992 $ 179,637
ITT Hartford............................. 53,100 3,584,250
Kansas City Southern Industries.......... 55,200 2,484,000
MBF Capital Berhad....................... 28,000 45,456
Morgan (JP) & Co......................... 35,800 3,494,975
NationsBank.............................. 78,000 7,624,500
Nichiei.................................. 4,500 332,397
Republic New York........................ 47,000 3,836,375
SAFECO................................... 138,800 5,473,925
State Bank of India, ADR................. 3,300(a) 57,321
Washington Mutual........................ 159,860 6,923,936
------------
111,667,220
------------
Foods & Related Products--1.0% Danone................................... 2,588 360,525
Devro.................................... 27,500 126,682
Goodman Fielder.......................... 69,635 86,361
Henkel KGaA.............................. 700(a) 33,524
Kao...................................... 45,000 524,838
Nestle................................... 225 241,018
PT Sari Husada........................... 8,000 52,159
Pick Szeged, ADR......................... 1,000(a,b) 58,500
Tablex................................... 10,000 28,535
Unilever NV, ADR......................... 23,500 4,118,375
Universal Robina......................... 90,000 50,475
------------
5,680,992
------------
Forest & Paper Products--.1% Amcor.................................... 28,900 185,872
Aracruz Celulose, ADR.................... 7,200 59,400
Koninklijke KNP.......................... 10,000 218,108
Smith (David S.)......................... 55,925 298,807
------------
762,187
------------
Health Care--7.3% Allergan................................. 160,000 5,700,000
Baxter International..................... 97,900 4,013,900
Biomet................................... 144,000 2,178,000
Bristol-Myers Squibb..................... 57,800 6,285,750
Novartis................................. 76,046 4,287,094
OrNda Healthcorp......................... 30,500(a) 892,125
Pharmacia & Upjohn....................... 199,000 7,885,375
Progressions Health Systems.............. 69,060(a) 2,072
Schering Plough.......................... 72,500 4,694,375
Tenet Healthcare......................... 122,000(a) 2,668,750
Watson Pharmaceuticals................... 56,000(a) 2,516,500
Yamanouchi Pharmaceutical................ 15,000 308,423
------------
41,432,364
------------
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Industrial Components--.1% Leader Universal Holdings Berhad......... 30,000 $ 62,958
Minebea.................................. 40,000 334,514
------------
397,472
------------
Insurance--.1% Bangkok Insurance........................ 1,600 22,706
Dai-Tokyo Fire & Marine Insurance........ 75,000 398,488
Pacific & Orient Berhad.................. 25,000 60,384
Zurich Versicherungs..................... 1,200 332,762
------------
814,340
------------
Leisure Time--.0% Harbour Centre Development............... 50,000 73,696
------------
Machinery--.3% Far East Levingston Shipbuilding......... 57,000 297,214
GEA...................................... 1,000 305,646
Laird.................................... 45,000 306,709
Mitsubishi Heavy Industries.............. 60,000 476,890
Scania AB 'A', ADR....................... 2,250 54,281
Scania AB 'B', ADR....................... 2,250 54,281
Scapa.................................... 50,862 213,833
Sulzer................................... 420 242,013
------------
1,950,867
------------
Merchandising--.1% Companhia Brasileira de Distribuicao
Grupo Pao de Acucar, ADR............... 2,000 35,250
Disco, ADR............................... 2,200 62,150
Ito-Yokado............................... 10,000 435,421
Magazine Zum Globus...................... 450 207,305
------------
740,126
------------
Metals--.1% Companhia Vale do Rio Doce, ADR.......... 3,500 67,375
Malayawata Steel Berhad.................. 27,000 50,889
Pohang Iron & Steel, ADR................. 3,000 60,750
RTZ...................................... 30,263 486,122
Tubes de Acero de Mexico, ADR............ 2,600(a) 41,275
------------
706,411
------------
Miscellaneous Materials--.1% Bunzl.................................... 95,871 382,537
Cristalerias de Chile, ADR............... 3,300 60,225
Empaques Ponderosa....................... 102,000(a) 62,998
------------
505,760
------------
Multi Industry--.8% ALFA..................................... 10,558 48,673
BTR...................................... 103,685 504,272
First Philippine......................... 20,000 45,627
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Multi Industry (continued) Hanson, ADR.............................. 460,000 $ 3,105,000
Hunter Douglas........................... 5,083 342,591
Malbak................................... 10,000 43,813
Orkla.................................... 3,000 190,207
------------
4,280,183
------------
Real Estate--.1% Cheung Kong.............................. 33,000 293,328
Empire East Land......................... 120,000(a) 54,753
IOI Properties Berhad.................... 20,000 64,938
------------
413,019
------------
Recreation--.0% Sankyo................................... 8,000 234,298
Yue Yuen Industrial...................... 374,000 142,647
------------
376,945
------------
Technology--5.3% Digital Equipment........................ 107,200(a) 3,899,400
General Instrument....................... 110,100(a) 2,380,913
KLA Instruments.......................... 55,000(a) 1,952,500
Lucent Technologies...................... 104,154 4,817,122
National Semiconductor................... 166,600(a) 4,060,875
Quantum.................................. 62,500(a) 1,789,062
Scientific-Atlanta....................... 160,000 2,400,000
Seagate Technology....................... 93,400(a) 3,689,300
Silicon Graphics......................... 206,400(a) 5,263,200
------------
30,252,372
------------
Telecommunications--.4% Cable & Wireless, ADR.................... 15,000 369,375
Compania de Telecomucicaciones, ADR...... 500 50,563
Koor Industries.......................... 500(a) 43,623
Korea Mobile Telecommunications, ADR..... 5,253 67,632
Portugal Telecom, ADR.................... 1,700 48,025
Royal PTT Nederland, ADR................. 6,778 256,717
Stet, Di Risp............................ 155,000 522,997
Tele Danmark, ADR........................ 11,000 299,750
Telecomunicacoes Brasileiras, ADR........ 1,200 91,800
Telefonica de Argentina.................. 26,400 69,182
Telefonica del Peru, ADR................. 5,000 94,375
Telefonos de Mexico...................... 120,000 197,540
Telefonos de Mexico, ADR................. 3,000 99,000
------------
2,210,579
------------
Transportation--1.2% Air New Zealand.......................... 59,818 162,215
CSX ..................................... 46,000 1,943,500
Singapore Airlines....................... 8,000 72,571
Transportacion Maritima, ADR............. 7,800 40,950
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Transportation (continued) Union Pacific............................ 68,300 $ 4,106,538
Yamato Transport......................... 38,500 399,136
------------
6,724,910
------------
Utilities--10.4% AT&T..................................... 138,000 6,003,000
CMS Energy............................... 121,800 4,095,525
Central Costanera, Cl. B................. 15,000 45,909
Companhia Energentina de Minas Gerais, ADR 2,900 98,600
Entergy.................................. 95,000 2,636,250
GTE...................................... 100,000 4,550,000
Gas Y Electridad......................... 6,000 383,372
Illinova................................. 197,100 5,420,250
Korea Electric Power, ADR................ 3,300 67,650
MCI Communications....................... 242,700 7,933,256
NYNEX.................................... 95,600 4,600,750
New England Electric System.............. 80,000 2,790,000
Pinnacle West Capital.................... 81,000 2,571,750
Powergen................................. 57,825 568,405
Sprint................................... 137,200 5,470,850
360 (Degrees) Communications............. 252,800 5,846,000
Tenaga Nasional Berhad................... 9,000 43,120
Unicom................................... 196,900 5,340,913
VEBA..................................... 6,000 346,528
Viag..................................... 800 313,563
------------
59,125,691
------------
TOTAL COMMON STOCKS
(cost $468,038,758).................... $550,834,388
============
Preferred Stocks--.0%
- --------------------------------------------------------------------------------
Appliances--.0% Brasmotor ............................... 200 $ 55,534
------------
Banking--.0% Banco Itau............................... 200 86,622
------------
Building Materials--.0% Companhia Cimento Portland Itau.......... 200 70,254
------------
Telecommunications--.0% Ericsson Telecomunicacoes................ 4,400 67,800
------------
TOTAL PREFERRED STOCKS
(cost $265,405)........................ $ 280,210
============
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
Convertible Preferred Stocks--.1% Shares Value
- -------------------------------------------------------------------------------- -------- ------------
<S> <C> <C> <C>
Energy--.0% Petroleo Brasileiro...................... 300 $ 47,931
------------
Foods & Related Products--.1% Henkel KGaA-Vorzug....................... 7,800 391,266
------------
Telecommunications--.0% Philippine Long Distance Telecommunications, ADR 1,200 61,200
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(cost $439,212)........................ $ 500,397
============
Principal
Short-Term Investments--1.7% Amount
- --------------------------------------------------------------------------------- ----------
Commercial Paper; General Electric Corporation,
7.10%, 1/2/97
(cost $9,353,000)...................... $ 9,353,000 $ 9,353,000
============
TOTAL INVESTMENTS (cost $478,096,375)........................................... 98.4% $560,967,995
======= ============
CASH AND RECEIVABLES (NET)...................................................... 1.6% $ 9,360,342
======= ============
NET ASSETS...................................................................... 100.0% $570,328,337
======= ============
<FN>
Notes to Statement of Investments:
- ---------------------------------------------------------------------------------
(a) Non-income producing.
(b) Securities exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At December 31, 1996, these
securities amounted to $170,012 or approximately .03% of net assets.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $478,096,375 $560,967,995
Cash denominated in foreign currencies........... 1,571,039 1,583,996
Receivable for investment securities sold........ 15,825,879
Dividends and interest receivable................ 946,913
Receivable for shares of Beneficial Interest subscribed 12,928
------------
579,337,711
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 535,313
Due to Distributor............................... 7,320
Cash overdraft due to Custodian.................. 3,049,203
Payable for shares of Beneficial Interest redeemed 2,712,496
Payable for investment securities purchased...... 2,698,011
Trustees' fees payable........................... 7,031
------------
9,009,374
------------
NET ASSETS..................................................................... $570,328,337
------------
------------
REPRESENTED BY: Paid-in capital.................................. $469,617,126
Accumulated undistributed investment income--net.. 225,149
Accumulated net realized gain (loss) on investments 17,599,465
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 82,886,597
------------
NET ASSETS..................................................................... $570,328,337
------------
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
-------------------------
Investor Institutional Class R
Shares Shares Shares
------------ ------------ -----------
<S> <C> <C> <C>
Net Assets..................................................... $486,816,123 $71,893,997 $11,618,217
Shares Outstanding............................................. 16,015,108 2,366,163 381,467
NET ASSET VALUE PER SHARE...................................... $30.40 $30.38 $30.46
====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Operations Year Ended December 31, 1996
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Cash dividends (net of $267,584 foreign taxes
withheld at source)............................ $ 10,230,237
Interest......................................... 600,815
------------
Total Income................................... $ 10,831,052
EXPENSES: Management fee--Note 2(a)......................... 4,593,348
Distribution fees--Note 2(b)...................... 1,203,950
Trustees' fees and expenses--Note 2(c)........... 63,282
------------
Total Expenses................................. 5,860,580
Less--reduction in management fee due to
undertaking--Note 2(a).......................... (103,470)
------------
Net Expenses................................... 5,757,110
------------
INVESTMENT INCOME--NET.......................................................... 5,073,942
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments and
foreign currency transactions................. $101,420,084
Net realized gain (loss) on forward currency
exchange contracts............................. (36,300)
------------
Net Realized Gain (Loss)....................... 101,383,784
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions............. (5,105,765)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 96,278,019
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $101,351,961
============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Investment income--net....................................................... $ 5,073,942 $ 6,286,623
Net realized gain (loss) on investments..................................... 101,383,784 44,708,361
Net unrealized appreciation (depreciation) on investments................... (5,105,765) 80,269,570
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations......... 101,351,961 131,264,554
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares........................................................... (4,113,567) (5,652,275)
Institutional shares...................................................... (647,083) (1,170,331)
Class R shares............................................................ (124,067) (20,018)
Net realized gain on investments:
Investor shares........................................................... (80,205,392) (32,708,062)
Institutional shares...................................................... (11,721,876) (6,089,493)
Class R shares............................................................ (1,866,594) (14,693)
------------ ------------
Total Dividends......................................................... (98,678,579) (45,654,872)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Investor shares........................................................... 110,377,880 32,376,118
Institutional shares...................................................... 14,132,483 92,766,522
Class R shares............................................................ 11,380,217 3,629,228
Dividends reinvested:
Investor shares........................................................... 74,407,664 34,209,203
Institutional shares...................................................... 11,944,449 7,078,027
Class R shares............................................................ 1,990,968 17,322
Cost of shares redeemed:
Investor shares........................................................... (101,845,407) (53,537,298)
Institutional shares...................................................... (30,775,024) (97,834,686)
Class R shares............................................................ (1,424,273) (5,221,642)
------------ ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions. 90,188,957 13,482,794
------------ ------------
Total Increase (Decrease) in Net Assets............................... 92,862,339 99,092,476
NET ASSETS:
Beginning of Period......................................................... 477,465,998 378,373,522
------------ ------------
End of Period............................................................... $570,328,337 $477,465,998
------------ ------------
------------ ------------
Undistributed investment income--net........................................... $ 225,149 $ 35,924
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
---------------------------------------
Year Ended Year Ended
December 31, 1996 December 31, 1995
------------------- -----------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Investor Shares
Shares sold.............................................................. 3,375,086 1,133,898
Shares issued for dividends reinvested................................... 2,435,917 1,141,448
Shares redeemed.......................................................... (3,126,844) (1,888,328)
---------- ----------
Net Increase (Decrease) in Shares Outstanding........................ 2,684,159 387,018
========== ==========
Institutional Shares
Shares sold.............................................................. 430,202 3,304,350
---------- ----------
Shares issued for dividends reinvested................................... 391,174 236,346
Shares redeemed.......................................................... (965,361) (3,450,788)
---------- ----------
Net Increase (Decrease) in Shares Outstanding........................ (143,985) 89,908
========== ==========
Class R
Shares sold.............................................................. 354,824 138,967
Shares issued for dividends reinvested................................... 65,018 577
Shares redeemed.......................................................... (44,489) (177,018)
---------- ----------
Net Increase (Decrease) in Shares Outstanding........................ 375,353 (37,474)
========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Investor Shares(1)
----------------------------------------------------
Year Ended December 31,
----------------------------------------------------
PER SHARE DATA: 1996 1995 1994(2) 1993(3) 1992
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............... $30.13 $24.56 $27.80 $25.46 $27.40
------ ------ ------ ------ ------
Investment Operations:
Investment income--net.............................. .31 .41 .42 .31 .36
Net realized and unrealized gain (loss)
on investments.................................. 6.03 8.24 (.29) 3.86 .70
------ ------ ------ ------ ------
Total from Investment Operations............. 6.34 8.65 .13 4.17 1.06
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net............... (.30) (.45) (.40) (.30) (.36)
Dividends from net realized gain on investments.... (5.77) (2.63) (2.97) (1.53) (2.64)
------ ------ ------ ------ ------
Total Distributions.......................... (6.07) (3.08) (3.37) (1.83) (3.00)
------ ------ ------ ------ ------
Net asset value, end of period..................... $30.40 $30.13 $24.56 $27.80 $25.46
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN............................... 21.44% 35.56% .38% 16.51% 4.03%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ 1.13% 1.13% 1.11% 1.15% 1.22%
Ratio of net investment income
to average net assets........................... .96% 1.43% 1.47% 1.13% 1.33%
Decrease reflected in above expense ratios
due to undertakings by the Manager.............. .02% .02% .01% .01% --
Portfolio Turnover Rate............................ 88.46% 54.42% 73.00% 75.00% 66.00%
Average commission rate paid(4) ................... $.0522 -- -- -- --
Net Assets, end of period (000's Omitted).......... $486,816 $401,674 $317,868 $349,813 $423,286
<FN>
- ------------------------------------------------------------------------------
(1) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and effective April 4, 1994 the Retail Class shares were reclassified as
Investor Shares.
(2) 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, N.A. served as the Fund's investment manager. Effective
October 17, 1994, The Dreyfus Corporation serves as the Fund's investment
manager.
(3) Per share amounts have been calculated using the monthly average
share method. (4) For years beginning January 1, 1996, the Fund is required to
disclose its average commission rate paid per share for purchases and sales of
investment securities.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Institutional Shares
----------------------------------------------------
Year Ended December 31, Period Ended
----------------------------------- December 31,
PER SHARE DATA: 1996 1995 1994(1) 1993(2)(3)
------ ------ ------ ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........... $30.12 $24.56 $27.80 $25.96
------ ------ ------ ------
Investment Operations:
Investment income--net.......................... .36 .47 .47 .32
Net realized and unrealized gain (loss)
on investments.............................. 6.01 8.20 (.31) 3.38
------ ------ ------ ------
Total from Investment Operations............... 6.37 8.67 .16 3.70
------ ------ ------ ------
Distributions:
Dividends from investment income--net........... (.34) (.48) (.43) (.33)
Dividends from net realized gain on investments (5.77) (2.63) (2.97) (1.53)
------ ------ ------ ------
Total Distributions............................ (6.11) (3.11) (3.40) (1.86)
------ ------ ------ ------
Net asset value, end of period................. $30.38 $30.12 $24.56 $27.80
------ ------ ------ ------
------ ------ ------ ------
TOTAL INVESTMENT RETURN........................... 21.57% 35.60% .49% 14.38%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........ 1.03% 1.03% 1.02% .95%(4)
Ratio of net investment income
to average net assets....................... 1.07% 1.53% 1.57% 1.13%(4)
Decrease reflected in above expense ratios
due to undertakings by the Manager.......... .02% .02% .01% --
Portfolio Turnover Rate........................ 88.46% 54.42% 73.00% 75.00%
Average commission rate paid(5)................ $.0522 -- -- --
Net Assets, end of period (000's Omitted)...... $71,894 $75,607 $59,435 $79,656
<FN>
- ------------------------------------------------------------------------------
(1) 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, N.A. served as the Fund's investment manager.
Effective October 17, 1994, The Dreyfus Corporation serves as the Fund's
investment manager.
(2) On February 1, 1993, the Fund commenced selling Institutional shares.
(3) Per share amounts have been calculated using the monthly average share method.
(4) Not annualized.
(5) For years beginning January 1, 1996, the Fund is required to disclose its
average commission rate paid per share for purchases and sales of
investment securities.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class R Shares
---------------------------------------
Year Ended December 31, Period Ended
------------------------ December 31,
PER SHARE DATA: 1996 1995 1994(1)(2)
------ ------ ----------
<S> <C> <C> <C>
Net asset value, beginning of period................... $30.18 $24.56 $28.45
------ ------ ------
Investment Operations:
Investment income--net.................................. .36 .62 .29
Net realized and unrealized gain (loss)
on investments...................................... 6.08 8.16 (.83)
------ ------ ------
Total from Investment Operations....................... 6.44 8.78 (.54)
------ ------ ------
Distributions:
Dividends from investment income--net................... (.39) (.53) (.38)
Dividends from net realized gain on investments........ (5.77) (2.63) (2.97)
------ ------ ------
Total Distributions.................................... (6.16) (3.16) (3.35)
------ ------ ------
Net asset value, end of period......................... $30.46 $30.18 $24.56
====== ====== ======
TOTAL INVESTMENT RETURN................................... 21.74% 36.05% (2.31%)(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................ .88% .88% .35%(3)
Ratio of net investment income
to average net assets............................... 1.23% 1.93% .70%(3)
Decrease reflected in above expense ratios
due to undertakings by the Manager.................. .02% .02% .01%(3)
Portfolio Turnover Rate................................ 88.46% 54.42% 73.00%
Average commission rate paid(4)........................ $.0522 -- --
Net Assets, end of period (000's Omitted).............. $11,618 $185 $1,070
<FN>
- ------------------------------------------------------------------------------
(1) From August 4, 1994 through October 16, 1994, Mellon Bank, N.A. served as
the Fund's investment manager. Effective October
17, 1994, The Dreyfus Corporation serves as the Fund's investment manager.
(2) On August 4, 1994, the Fund commenced selling Trust shares. Effective
October 17, 1994 the Trust shares were reclassified as Class R shares.
(3) Not annualized.
(4) For years beginning January 1, 1996, the Fund is required to disclose
its average commission rate paid per share for
purchases and sales of investment securities.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Funds Trust (the "Trust") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering three
series including the Dreyfus Core Value Fund (the "Fund"). The Fund's investment
objective is to seek long-term growth of capital and current income. The Dreyfus
Corporation ("Manager") serves as the Fund's investment manager. The Manager is
a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an unlimited
number of shares of Beneficial Interest in the following classes of shares:
Investor, Institutional and Class R. Investor shares are sold primarily to
retail investors and bear a distribution fee. Institutional shares are offered
only to those customers of certain financial planners and investment advisers
who held shares of a predecessor class of the Fund as of April 4, 1994, and bear
a distribution fee. Class R shares are sold primarily to bank trust departments
and other financial service providers (including Mellon Bank and its affiliates)
acting on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee. Each class of
shares has identical rights and privileges, except with respect to the
distribution fee and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market. Securities
not listed on an exchange or the national securities market, or securities for
which there were no transactions, are valued at the average of the most recent
bid and asked prices. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange. Forward currency exchange contracts are valued
at the forward rate.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(c) Foreign currency transactions: The Fund does not isolate that portion of
the results of the operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in the market prices
of securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities
of short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions, the difference between the amount of
dividends, interest, and foreign withholding taxes recorded on the Fund's books,
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
the value of assets and liabilities
other than investments in securities, resulting from changes in exchange rates.
Such gains and losses are included with net realized and unrealized gain or loss
on investments.
(d) Forward currency exchange contracts: The Fund enters into forward
currency exchange contracts in order to hedge its exposure to changes in foreign
currency exchange rates on its foreign portfolio holdings. When executing
forward currency exchange contracts, the Fund is obligated to buy or sell a
foreign currency at a specified rate on a certain date in the future. With
respect to sales of forward currency exchange contracts, the Fund would incur a
loss if the value of the contract increases between the date the forward
contract is opened and the date the forward contract is closed. The Fund
realizes a gain if the value of the contract decreases between those dates. With
respect to purchases of forward currency exchange contracts, the Fund would
incur a loss if the value of the contract decreases between the date the forward
contract is opened and the date the forward contract is closed. The Fund
realizes a gain if the value of the contract increases between those dates. The
Fund is also exposed to credit risk associated with counter party nonperformance
on these forward currency exchange contracts which is typically limited to the
unrealized gain on each open contract. At December 31, 1996, there were no open
forward currency exchange contracts.
(e) Distributions to shareholders: Dividends are recorded on the ex-divided
date. Dividends from investment income-net are declared and paid on a quarterly
basis. Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(f) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
NOTE 2--Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .90% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, Rule 12b-1 distribution fees and expenses, fees and expenses of
non-interested Trustees (including counsel fees) and extraordinary expenses. The
Manager is also required to reduce its fee in an amount equal to the Fund's
allocable portion of fees and expenses of the non-interested Trustees (including
counsel). In addition, during the period ended December 31, 1996, the Manager
voluntarily agreed to waive its fee by .02% of the value of the Fund's average
daily net assets. The reduction in the management fee pursuant to the waiver
amounted to $103,470 during the period ended December 31, 1996.
(b) Distribution plan: The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act relating to its Investor and
Institutional shares. Under the Plan, the Fund may pay annually up to .25% of
the value of the average daily net assets attributable to its Investor shares
and up to .15% of the value of
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
the average daily net assets
attributable to its Institutional shares to compensate the Distributor and
Dreyfus Service Corporation, an affiliate of the Manager, for shareholder
servicing activities and the Distributor for activities primarily intended to
result in the sale of Investor shares. The Class R shares bear no distribution
fee. During the period ended December 31, 1996, the distribution fee for the
Investor shares and Institutional shares were $1,105,214 and $98,736,
respectively.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of majority of those Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan.
(c) Trustees' Fees: Each trustee who is not an "interested person" as defined
in the Act receives $27,000 per year, $1,000 for each Board meeting attended and
$750 for each Audit Committee meeting attended and is reimbursed for travel and
out-of-pocket expenses. These expenses are paid in total by the following funds:
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust. In addition the Chairman of the Board receives
an annual fee of $75,000 per year. These fees and expenses are charged and
allocated to each series based on net assets.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts, during
the period ended December 31, 1996 amounted to $446,015,030 and $458,940,931,
respectively.
At December 31, 1996, accumulated net unrealized appreciation on investments
was $82,871,620, consisting of $91,811,941 gross unrealized appreciation and
$8,940,321 gross unrealized depreciation.
At December 31, 1996, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 4--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. For the period ended December 31, 1996, the Fund did not borrow
under the line of credit.
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Funds Trust:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Core Value Fund of The
Dreyfus/Laurel Funds Trust as of December 31, 1996, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years or periods in the three-year period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years or periods in the two-year period ended
December 31, 1993 were audited by other auditors whose report thereon, dated
February 14, 1994, expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
as of December 31, 1996, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Dreyfus Core Value Fund of The Dreyfus/Laurel Funds Trust as of December 31,
1996, the results of its operations for the year then ended, changes in its net
assets for each of the years in the two-year period then ended, and its
financial highlights for each of the years or periods in the three-year period
then ended, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
February 14, 1997
<PAGE>
Dreyfus Core Value Fund
- ------------------------------------------------------------------------------
Important Tax Information (Unaudited)
For Federal tax purposes the Fund hereby designates $4.218 per share as a
long-term capital gain distribution paid on December 24, 1996 and also
designates $.453 per share as a long-term capital gain distribution paid on
April 18, 1996.
The Fund also designates 41.13% of the ordinary dividends paid during the
fiscal year ended December 31, 1996 as qualifying for the corporate dividends
received deduction.
<PAGE>
Dreyfus Core Value Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. COREAR9612
DREYFUS SPECIAL GROWTH FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
The Dreyfus Special Growth Fund suffered a small loss in 1996, including
a sharp decline along with the overall market decline during May and June
plus a more modest price decline during the fourth quarter for many of the
Fund's more aggressive small capitalization holdings. Smaller capitalization
indices generally underperformed larger capitalization indices during the May
through November period.
The Dreyfus Special Growth Fund experienced a loss of -2.55% for its
Investor Shares and -2.25% for its Class R shares for the 12-month period
ended December 31, 1996.* This compared with a total return of 22.95% for the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") for the
same period.**
The Fund's Board of Trustees has approved, subject to approval by Fund
shareholders, an Agreement and Plan of Reorganization (the "Plan") providing
for the transfer of assets and liabilities of the Fund to the Dreyfus
Aggressive Growth Fund (the "Growth Fund"), another Dreyfus-managed fund, in
a tax free exchange for shares of common stock of the Growth Fund, the
distribution of shares of the Growth Fund to Fund shareholders and the
subsequent termination of the Fund (the "Reorganization").
It is currently contemplated that shareholders of the Fund will be asked
to approve the Plan at a special meeting of shareholders to be held on or
about April 7, 1997. If the Plan is approved, the Reorganization will become
effective shortly thereafter.
Economic and Market Review
The economy had a year of solid overall growth in 1996, but the uneven
fluctuating economic momentum during the year did significantly impact the
financial markets. Early in the first quarter, slow growth followed a weak
late 1995 economy, during which interest rates declined slightly. The slight
acceleration of economic growth and rising earnings expectations late in the
first quarter boosted investor confidence. A broad-based stock market rally
occurred as the best possible combination of solid growth, low inflation and
only a mild interest rate rise lasted for several months. Rising interest in
many new initial public stock offerings added to the excitement as investors
poured money into equity mutual funds at a record rate.
In the second quarter, stronger economic growth and rising commodity
prices contributed to a further rise in interest rates and increased investor
fears of an official rise in interest rates by the Federal Reserve Board.
During June and July the fears of additional rising inflation and interest
rates caused a sharp two-month decline in stock prices. Major stock price
indices, like the S&P 500, declined 8% to 10% from their highs and more
volatile over-the-counter and smaller capitalization indices fell 15% to 20%
from previous record high levels.
When economic momentum broadly slowed during the summer, commodity price
inflation and interest rates peaked, and began to decline in early August.
The stock market began its recovery rally in August and reached broad new
record high levels early in the fourth quarter. Large capitalization shares
led the record-breaking rally as investors seemed to prefer shares in
higher-confidence, more liquid and less volatile investments with strong
earnings growth prospects. The lingering fear of another jump in interest
rates seemed to scare off interest in more volatile smaller capitalization
shares, including initial public offerings.
Some rise in economic growth late in the fourth quarter encouraged
investors that solid growth, stable interest rates and rising earnings growth
expectations would continue into 1997, providing more fuel for the bullish
equity market. Positive news announcements including strong earnings growth
and numerous positive new product introductions and new 1997-1998 business
opportunities were the most important catalysts for rising investor
expectations that boosted stock prices during the last five months of 1996
and during the early days in 1997.
Portfolio Focus
The Fund increased its emphasis on small capitalization and microcap
shares during the year consistent with a strategy to focus on the
fastest-growing companies that we believe will provide above-average
long-term investment returns. Smaller-capitalization shares generally
outperformed the rising overall market during February through May, but then
declined more sharply than the overall market during the June-July market
correction and lagged during the market recovery before year end as investor
confidence in smaller companies was hurt by fears of higher interest rates.
Only as late as in December did many Fund holdings show improving performance
as positive company news announcements and expectations of strong 1997
earnings growth finally began to favorably affect smaller company stocks.
As the year ended, the Fund was underweighted, compared to the S&P 500,
in Consumer Durables and Consumer Nondurables, Retail Trade, Finance and
Utilities. The Fund's weightings were greater than those in the S&P 500 in
the following sectors: Technology, Health Services, Health Care Technology,
and Energy Services. During the June through November period,
underperformance by the Fund's overweighted health care and technology
holdings combined with the Fund's underweighting in the outperforming
consumer and finance sectors contributed to overall Fund underperformance.
At the end of the year, the Fund's five largest holdings and their
percentage of the total portfolio value were Ultrafem 8.4%, McAfee Associates
7.4%, Quintel Entertainment 5.4%, Varco International 4.8% and Cinar Films,
Cl.B. 4.7%.
Ultrafem suffered a price setback, though not enough to cancel out our
gains in this holding. Quintel and Cinar also gave up some of their previous
gains and there was a decline in another of our holdings, Fuisz Technologies.
For the longer term, we continue to have great confidence in small
capitalization and microcap stocks with strong expected revenue and earnings
growth trends over a forward-looking one to two-year time frame.
Sincerely,
[Michael L. Schonberg signature logo]
Michael L. Schonberg
Portfolio Manager
January 15, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. _ Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
DREYFUS SPECIAL GROWTH FUND DECEMBER 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS SPECIAL GROWTH
FUND INVESTOR SHARES AND THE STANDARD AND POOR'S 500 COMPOSITE STOCK PRICE
INDEX
[Exhibit A:
Dollars
$105,728
Standard & Poor's 500
Composite Stock Price
Index*
$65,445
Dreyfus Special Growth
Fund (Investor Shares)
(years shown above are as of December 31)
*Source: Lipper Analytical Services, Inc.]
<TABLE>
<CAPTION>
Average Annual Total Returns
Investor Shares Class R Shares
- ------------------------------------------------------- ------------------------------------------------------
Period Ended 12/31/96 Period Ended 12/31/96
- --------------------- -------------------
<S> <C> <C> <C> <C>
1 Year (2.55%) 1 Year (2.25%)
5 Years 9.50 From Inception (2/1/93) 5.10
10 Years 10.39
From Inception (5/3/82) 13.67
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Investor shares of Dreyf
us Special Growth Fund on 5/3/82 (Inception Date) to a $10,000 investment
made in the Standard & Poor's 500 Composite Stock Price Index on that date.
For comparative purposes, the value of the Index on 4/30/82 is used as the
beginning value on 5/3/82. All dividends and capital gain distributions are
reinvested. Performance for Class R shares will vary from the performance of
Investor shares shown above due to differences in charges and expenses.
The Fund's performance shown in the line graph takes into account all
applicable fees and expenses. The Standard & Poor's 500 Composite Stock Price
Index is a widely accepted, unmanaged index of overall stock market
performance, which does not take into account charges, fees and other
expenses. Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS SPECIAL GROWTH FUND
STATEMENT OF INVESTMENTS DECEMBER 31,1996
Common Stocks_97.7% Shares Value
------ ------
<S> <C> <C> <C> <C> <C>
Commercial Services_7.0% Correctional Services 60,000 (a) $ 862,500
Quintel Entertainment.................. 320,000 (a) 3,000,000
_____
3,862,500
_____
Consumer Durables_1.5% Diamond Home Services 30,000 (a) 825,000
_____
Consumer Non-durables_8.4% Ultrafem............................... 265,000 (a) 4,637,500
Vista 2000............................. 310,000 (a) 19,220
_____
4,656,720
_____
Consumer Services_8.0% Alma International..................... 300,000 (a) 624,000
Casino Data Systems.................... 100,000 (a) 687,500
Cinar Films, Cl. B..................... 100,000 (a) 2,600,000
Metromedia International Group......... 50,000 (a) 493,750
_____
4,405,250
_____
Electronic Technology_5.9% Larson Davis........................... 40,000 (a) 470,000
MRV Communications..................... 100,000 (a) 2,175,000
Personal Computer Products............. 125,000 (a) 136,719
TSL Holdings........................... 10 (a) __
Tridex................................. 37,500 (a) 482,812
_____
3,264,531
_____
Finance_3.6% Hooper Holmes.......................... 114,800 1,994,650
_____
Health Services_10.9% Complete Management.................... 175,000 (a) 2,253,125
Core................................... 182,500 (a) 1,596,875
OMEGA Health Systems................... 70,000 (a) 463,750
OnGard Systems......................... 200,000 (a) 600,000
OncorMed............................... 100,000 (a) 481,250
Pace Health Management Systems......... 200,000 (a) 600,000
_____
5,995,000
_____
Health Technology_13.0% Fuisz Technologies..................... 180,000 (a) 1,417,500
MacroChem.............................. 300,000 (a) 1,950,000
ONCOR.................................. 230,000 (a) 905,625
Protein Design Labs.................... 70,000 (a) 2,555,000
VIMRx Pharmaceuticals.................. 100,000 (a) 337,500
_____
7,165,625
_____
Industrial Services_11.1% Commodore Applied Technologies......... 200,000 (a) 1,000,000
Commodore Applied Technologies (Warrants) 50,000 (a) 68,750
Global Marine.......................... 115,000 (a) 2,371,875
Varco International.................... 115,000 (a) 2,659,375
_____
6,100,000
_____
Process Industries_3.3% Chromatics Color Sciences International. 230,000 (a) 1,035,000
Ocal.................................... 230,000 (a) 805,000
_____
1,840,000
_____
Retail Trade_.9% CML Group............................... 150,000 506,250
_____
DREYFUS SPECIAL GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31,1996
Common Stocks (continued) Shares Value
------- ------
Technology_22.4% Aspen Technology....................... 25,000 (a) $ 2,006,250
IMNET Systems.......................... 20,000 (a) 485,000
Intellicell............................ 15,000 (a) 110,625
Level 8 Systems........................ 85,000 (a) 1,317,500
McAfee Associates...................... 93,000 (a) 4,092,000
Mercury Interactive.................... 165,000 (a) 2,145,000
Simulation Sciences.................... 19,000 (a) 282,625
TriTeal................................ 70,000 (a) 1,487,500
V-One.................................. 60,000 (a) 435,000
_____
12,361,500
_____
Utilities_1.7% AMNEX.................................. 300,000 (a) 918,750
_____
TOTAL COMMON STOCKS
(cost $51,967,036)................... $53,895,776
======
Principal
Short-Term Investments_4.1% Amount
______
U.S. Treasury Bills: 4.98%, 3/6/97
(cost $2,250,521).................... $..2,270,000 $ 2,249,979
======
TOTAL INVESTMENTS (cost $54,217,557)........................................ 101.8% $56,145,755
====== ======
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (1.8%) $ (989,920)
====== ======
NET ASSETS.................................................................. 100.0% $55,155,835
====== ======
Notes to Statement of Investments:
(a) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS
DREYFUS SPECIAL GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
Cost Value
______ ______
ASSETS: Investments in securities_See Statement of Investments $54,217,557 $56,145,755
Cash....................................... 139,470
Receivable for shares of Beneficial Interest subscribed 2,000
Dividends receivable....................... 166
______
56,287,391
______
LIABILITIES: Due to The Dreyfus Corporation and affiliates 70,261
Due to Distributor......................... 402
Payable for investment securities purchased 1,058,907
Payable for shares of Beneficial Interest redeemed 1,000
Trustees' fees payable..................... 986
______
1,131,556
______
NET ASSETS.................................................................. $55,155,835
======
REPRESENTED BY: Paid-in capital............................ $49,337,894
Accumulated net realized gain (loss) on investments 3,889,755
Accumulated net unrealized appreciation (depreciation) on
investments and foreign currency transactions 1,928,186
______
NET ASSETS.................................................................. $55,155,835
======
NET ASSET VALUE PER SHARE
____________________________
Investor Class R
Shares Shares
____________ ____________
Net Assets.................................................................. $51,025,050 $ 4,130,785
Shares Outstanding.......................................................... 3,089,861 246,210
NET ASSET VALUE PER SHARE................................................... $16.51 $16.78
====== ======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS SPECIAL GROWTH FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
INVESTMENT (LOSS)
INCOME: Interest (net of $65 foreign taxes
withheld at source).................... $ 113,249
Cash dividends (net of $1,215 foreign taxes
withheld at source).................... 68,993
_____
Total Income......................... $ 182,242
EXPENSES: Management fee_Note 2(a)................... 734,754
Distribution fee (Investor shares)_Note 2(b) 149,370
Trustees' fees and expenses_Note 2(c)...... 8,873
_____
Total Expenses....................... 892,997
______
INVESTMENT (LOSS)........................................................... (710,755)
______
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 3:
Net realized gain (loss) on investments and
foreign currency transactions (including
option transactions)................... $9,542,015
Net realized gain (loss) on forward currency
exchange contracts..................... 374
_____
Net Realized Gain (Loss)............. 9,542,389
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions...... (10,640,734)
______
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (1,098,345)
______
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (1,809,100)
======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS SPECIAL GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1996 December 31, 1995
--------- ---------
OPERATIONS:
Investment (loss).............................................. $ (710,755) $ (397,865)
Net realized gain (loss) on investments........................ 9,542,389 1,520,806
Net unrealized appreciation (depreciation) on investments...... (10,640,734) 18,222,938
______ ______
Net Increase (Decrease) in Net Assets Resulting from Operations (1,809,100) 19,345,879
______ ______
DIVIDENDS TO SHAREHOLDERS FROM:
Net realized gain on investments:
Investor shares.............................................. (5,955,227) __
Class R shares............................................... (479,447) __
______ ______
Total Dividends............................................ (6,434,674) __
______ ______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Investor shares.............................................. 20,726,236 27,132,927
Class R shares............................................... 3,471,812 2,905,819
Dividends reinvested:
Investor shares.............................................. 5,714,781 __
Class R shares............................................... 479,345 __
Cost of shares redeemed:
Investor shares.............................................. (34,007,893) (43,483,029)
Class R shares............................................... (4,499,800) (6,009,549)
______ ______
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (8,115,519) (19,453,832)
______ ______
Total Increase (Decrease) in Net Assets.................. (16,359,293) (107,953)
NET ASSETS:
Beginning of Period............................................ 71,515,128 71,623,081
______ ______
End of Period.................................................. $ 55,155,835 $ 71,515,128
====== ======
ACCUMULATED INVESTMENT (LOSS).................................... __ $ (397,865)
______ ______
CAPITAL SHARE TRANSACTIONS:
Shares Shares
______ ______
Investor Shares
--------
Shares sold.................................................... 1,049,899 1,584,544
Shares issued for dividends reinvested......................... 346,420 __
Shares redeemed................................................ (1,770,547) (2,544,847)
______ ______
Net Increase (Decrease) in Shares Outstanding (374,228) (960,303)
====== ======
Class R Shares
--------
Shares sold.................................................... 176,567 168,019
Shares issued for dividends reinvested......................... 28,631 __
Shares redeemed................................................ (233,837) (352,040)
______ ______
Net Increase (Decrease) in Shares Outstanding (28,639) (184,021)
====== ======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS SPECIAL GROWTH FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Investor Shares
______________________________________________________
Year Ended December 31,
______________________________________________________
PER SHARE DATA: 1996 1995 1994(1)(2) 1993(1)(3) 1992(1)
--- --- ---- --- ---
Net asset value, beginning of period......... $19.11 $14.65 $17.97 $ 16.45 $14.59
___ ___ ____ ___ ___
Investment Operations:
Investment (loss)(4)......................... (.23) (.11) (.09) (.20) (.10)
Net realized and unrealized gain (loss)
on investments............................. (.29) 4.57 (3.18) 3.51 3.77
___ ___ ____ ___ ___
Total from Investment Operations............. (.52) 4.46 (3.27) 3.31 3.67
___ ___ ____ ___ ___
Distributions:
Dividends in excess of investment income_net. -- -- -- -- (.19)
Dividends from net realized gain on investments (2.08) -- (.05) (1.79) (1.62)
Dividends in excess of net realized gain on investments -- -- (.00)(5) -- --
___ ___ ____ ___ ___
Total Distributions.......................... (2.08) __ (.05) (1.79) (1.81)
___ ___ ____ ___ ___
Net asset value, end of period............... $16.51 $19.11 $14.65 $17.97 $16.45
=== === === === ===
TOTAL INVESTMENT RETURN.......................... (2.55%) 30.44% (18.22%) 20.01% 26.19%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(6)... 1.40% 1.40% 1.42% 1.73% 1.57%
Ratio of net investment (loss)
to average net assets...................... (1.12%) (.57%) (.51%) (1.09%) (.71%)
Portfolio Turnover Rate...................... 127.23% 68.91% 133.00% 94.00% 112.00%
Average commission rate paid(7).............. $.0528 -- -- -- --
Net Assets, end of period (000's Omitted).... $51,025 $66,201 $64,839 $83,879 $64,071
(1) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the
Institutional Class and the Investment Class of shares. Effective April
4, 1994 the Retail and Institutional Classes were reclassified as a single
class of shares known as Investor Shares. The amounts shown for the year
ended December 31, 1994 were calculated using the performance of a Retail
Class share outstanding from January 1, 1994 to April 3, 1994, and the
performance of an Investor Share outstanding from April 4, 1994 to
December 31, 1994. The Financial Highlights for the year ended December
31, 1993 and prior years are based upon a Retail Class share outstanding.
(2) Prior to April 4, 1994, The Boston Company Advisors, Inc. served as
the Fund's investment adviser. From April 4, 1994
through October 16, 1994, Mellon Bank, N.A. served as the Fund's
investment manager. Effective October 17, 1994, The Dreyfus Corporation
serves as the Fund's investment manager.
(3) Per share amounts have been calculated using the monthly average share
method.
(4) Without the voluntary waiver of fees and/or reimbursement of expenses
by the investment adviser, net investment loss for
the year ended December 31, 1993 would have been ($.21).
(5) Amount represents less than $.01 per share.
(6) Without voluntary reimbursement of expenses and/or waiver of fees by
the investment adviser, the annualized ratio of
expenses to average net assets for the year ended December 31, 1993 would
have been 1.79%.
(7) For years beginning January 1, 1996, the Fund is required to disclose
its average commission paid per share for
purchases and sales of investment securities.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS SPECIAL GROWTH FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Class R Shares
--------------------------------------------------
Period Ended
Year Ended December 31, December 31,
--------------------------------
PER SHARE DATA: 1996 1995 1994(1)(2) 1993(1)(3)
--- --- -------- ----------
Net asset value, beginning of period.............. $19.33 $14.78 $18.06 $17.31
___ ___ ___ ___
Investment Operations:
Investment income (loss)_net(4)................... (.15) .03 (.02) (.10)
Net realized and unrealized gain (loss)
on investments.................................. (.32) 4.52 (3.21) 2.64
___ ___ ___ ___
Total from Investment Operations.................. (.47) 4.55 (3.23) 2.54
___ ___ ___ ___
Distributions:
Dividends from net realized gain on investments... (2.08) -- (.05) (1.79)
Dividends in excess of net realized gain on investments -- -- (.00)(5) --
___ ___ ___ ___
Total Distributions............................... (2.08) -- (.05) (1.79)
___ ___ ___ ___
Net asset value, end of period.................... $16.78 $19.33 $14.78 $18.06
=== === === ===
TOTAL INVESTMENT RETURN............................... (2.25%) 30.79% (17.91%) 15.78%(6)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(7)........ 1.15% 1.15% 1.15% 1.09%(6)
Ratio of net investment income (loss)
to average net assets........................... (.87%) (.31%) (.24%) (.50%)(6)
Portfolio Turnover Rate........................... 127.23% 68.91% 133.00% 94.00%(6)
Average commission rate paid(8)................... $.0528 -- -- --
Net Assets, end of period (000's Omitted)......... $4,131 $5,314 $6,784 $ 14,941
(1) On February 1, 1993, the Fund commenced selling Investment Class
shares. Effective April 4, 1994 the Investment Class
shares were reclassified as Trust shares and on October 17, 1994 were
reclassified as Class R shares.
(2)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, N.A. served as the Fund's
investment manager. Effective October 17, 1994, The Dreyfus Corporation
serves as the Fund's investment manager.
(3) Per share amounts have been calculated using the monthly
average share method.
(4)Without the voluntary waiver of fees and/or reimbursement of expenses
by the investment adviser, net investment loss for
the period ended December 31, 1993 would have been ($.11).
(5) Amount represents less than $.01 per share.
(6) Not annualized.
(7)Without voluntary reimbursement of expenses and/or waiver of fees by
the investment adviser, the ratio of expenses to
average net assets for the period ended December 31, 1993 would have been
1.14%.
(8)For years beginning January 1, 1996, the Fund is required to disclose
its average commission paid per share for purchases
and sales of investment securities.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS SPECIAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
The Dreyfus/Laurel Funds Trust (the "Trust") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering three
series including the Dreyfus Special Growth Fund (the "Fund"). The Fund's
investment objective is to seek above-average capital growth without regard
to income through investments principally in securities of issuers thought to
have significant growth potential. The Dreyfus Corporation ("Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A. ("Mellon Bank").
The Trust's Board of Trustees has approved, subject to approval by Fund
shareholders, an Agreement and Plan of Reorganization providing for the
transfer of all or substantially all of the assets and liabilities of the
Fund to the Dreyfus Aggressive Growth Fund (the "Growth Fund") in a tax free
exchange for shares of common stock of the Growth Fund and the subsequent
termination of the Fund (the "Reorganization"). The meeting of Fund
shareholders is currently scheduled for April 7, 1997 and, if the Agreement
of Plan of Reorganization is approved, the Reorganization will become
effective shortly thereafter.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an
unlimited number of shares of Beneficial Interest in the following classes of
shares: Investor and Class R. Investor shares are sold primarily to retail
investors and bear a distribution fee. Class R shares are sold primarily to
bank trust departments and other financial service providers (including
Mellon Bank and its affiliates) acting on behalf of customers having a
qualified trust or investment account or relationship at such institution,
and bear no distribution fee. Each class of shares has identical rights and
privileges, except with respect to the distribution fee and voting rights on
matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (including options)
are valued at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market. Securities not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the
direction of the Board of Trustees. Investments denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of
exchange. Forward currency exchange contracts are valued at the forward rate.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(C) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of the operations resulting from changes in foreign exchange
rates on investments from the fluctuations arising from changes in the market
prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amount of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts
DREYFUS SPECIAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than
investments in securities, resulting from changes in exchange rates. Such
gains and losses are included with net realized and unrealized gain or loss
on investments.
(D) OPTIONS: The Fund may purchase and write (sell) put and call options
in order to gain exposure to or protect against changes in the market.
As a writer of put options, the Fund receives a premium at the outset and
then bears the market risk of unfavorable changes in the price of the
financial instrument underlying the option. Generally, the Fund would incur a
gain, to the extent of the premium, if the price of the underlying financial
instrument increases between the date the option is written and the date on
which the option is terminated. Generally, the Fund would realize a loss, if
the price of the financial instrument decreases between those dates. At
December 31, 1996, there were no put options written outstanding.
(E) FORWARD CURRENCY EXCHANGE CONTRACTS: The Fund enters into forward
currency exchange contracts in order to hedge its exposure to changes in
foreign currency exchange rates on its foreign portfolio holdings. When
executing forward currency exchange contracts, the Fund is obligated to buy
or sell a foreign currency at a specified rate on a certain date in the
future. With respect to sales of forward currency exchange contracts, the
Fund would incur a loss if the value of the contract increases between the
date the forward contract is opened and the date the forward contract is
closed. The Fund realizes a gain if the value of the contract decreases
between those dates. With respect to purchases of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract decreases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
increases between those dates. The Fund is also exposed to credit risk
associated with counter party nonperformance on these forward currency
exchange contracts which is typically limited to the unrealized gains on such
contracts that are recognized in the Statement of Assets and Liabilities. At
December 31, 1996, there were no open forward currency exchange contracts.
(F) DISTRIBUTIONS TO SHAREHOLDERS: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net and dividends from net
realized capital gain are normally declared and paid annually, but the Fund
may make distributions on a more frequent basis to comply with the distributio
n requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
(G) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interest of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
In accordance with Statement of Position 93-2, the Fund reclassed
$1,108,620 to undistributed income and $9,716 to undistributed realized gains
to paid-in capital.
NOTE 2_INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties and/or affiliates to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. The Manager also directs the investments of the Fund in accordance with
its investment objective, policies and limitations. For these services, the
Fund is contractually obligated to pay the Manager a fee, calculated daily
and paid monthly, at the annual rate of 1.15% of the value of the Fund's
average daily net assets. Out of its fee, the Manager pays all of the
expenses of the Fund except brokerage fees, taxes, interest, Rule 12b-1
distribution fees and expenses, fees and expenses of non-interested Trustees
(including counsel fees) and
DREYFUS SPECIAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
extraordinary expenses. In addition, the Manager is required to reduce its
fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel).
(B) DISTRIBUTION PLAN: The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its Investor
shares. Under the Plan, the Fund may pay annually up to .25% of the value of
the average daily net assets attributable to its Investor shares to
compensate the Distributor and Dreyfus Service Corporation, an affiliate of
the Manager, for shareholder servicing activities and the Distributor for
activities primarily intended to result in the sale of Investor shares. The
Class R shares bear no distribution fee. During the period ended December 31,
1996, the distribution fee for the Investor shares was $149,370.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Trustees who are not "interested persons" of the Trust and who have no direct
or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(C) TRUSTEES' FEES: Each trustee who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee meeting attended and is reimbursed
for travel and out-of-pocket expenses. These expenses are paid in total by
the following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel
Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the
Chairman of the Board receives an annual fee of $75,000 per year. These fees
and expenses are charged and allocated to each series based on net assets.
NOTE 3_SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, option transactions and forward currency
exchange contracts, during the period ended December 31, 1996 amounted to
$80,290,769 and $92,795,669, respectively.
In addition, the following table summarizes the Fund's put options
written transactions during the period ended December 31, 1996:
Options Closed
--------------------------
Net
Number of Premiums Realized
Contracts Received Cost Gain
---------- ------------ --------- ----------
OPTIONS WRITTEN:
Contracts outstanding December 31, 1995..... _ $ _
Contracts written........................... 300 254,100
Contracts closed............................ 300 254,100 $ 83,250 $170,850
--- ---- ==== ====
Contracts outstanding December 31, 1996..... _ $ _
=== ====
</TABLE>
(B) At December 31, 1996, accumulated net unrealized appreciation on
investments was $1,928,198, consisting of $14,381,266
gross unrealized appreciation and $12,453,068 gross unrealized depreciation.
At December 31, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 4_BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ended December 31, 1996, the Fund did not
borrow under the line of credit.
DREYFUS SPECIAL GROWTH FUND
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL FUNDS TRUST:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Special Growth Fund of The
Dreyfus/Laurel Funds Trust as of December 31, 1996, and the related statement
of operations for the year then ended, the statements of changes in net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the three-year period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for each of the years or periods in the
two-year period ended December 31, 1993 were audited by other auditors whose
report thereon, dated February 14, 1994, expressed an unqualified opinion on
those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of December 31, 1996, by correspondence with the
custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Special Growth Fund of The Dreyfus/Laurel Funds Trust as
of December 31, 1996, the results of its operations for the year then ended,
changes in its net assets for each of the years in the two-year period then
ended, and its financial highlights for each of the years in the three-year
period then ended, in conformity with generally accepted accounting
principles.
[KPMG Peat Marwick LLP signature logo]
New York, New York
February 14, 1997
DREYFUS SPECIAL GROWTH FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $1.861 per share as a
long-term capital gain distribution paid on December 23, 1996. The Fund also
designates $.223 per share as a long-term capital gain distribution paid on
April 18, 1996.
[Dreyfus lion "d" logo]
DREYFUS SPECIAL GROWTH FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 322/722AR9612
[Dreyfus logo]
Special Growth
Fund
Annual Report
December 31, 1996
PREMIER MANAGED INCOME FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Premier Managed
Income Fund. For its annual reporting period ended December 31, 1996, your
Fund paid the following income dividends: approximately $.692 per share for
Class A shares, $.611 per share for Class B shares, $.606 per share for Class
C shares and $.719 per share for Class R shares. These dividends amount to
annualized distribution rates per share of 6.14%, 5.68%, 5.63% and 6.68% for
Class A, Class B, Class C and Class R shares, respectively.* During this
twelve-month period, the Fund produced total returns of 3.42% for Class A
shares, 2.54% for Class B shares, 2.49% for Class C shares and 3.58% for
Class R shares.** This compares to a return of 3.63% for the Lehman Brothers
Aggregate Bond Index, the Fund's benchmark.***
THE ECONOMY
Over the reporting period, the economy grew moderately showing little
evidence of accelerating inflation despite the robust pace of job creation
and the low unemployment rate. Fear of accelerating inflation prompted a
sharp rise in long-term interest rates earlier in the year. By year-end,
however, long-term rates had fallen by one-half of one percent (50 basis
points) from last summer's peak. Contributing to the drop in rates was the
decision of the Open Market Committee of the Federal Reserve Board (the
"Fed") to leave short-term rates unchanged.
Inflation at the consumer level remained in the 3% range; a benign
inflation picture exists at the production level of the economy as well. The
so-called "core" Producer Price Index (it excludes the energy and food
components because of their volatility) rose just 0.1% in November and a mere
0.6% for the previous 12 months. Producers appeared to have little ability to
pass on price increases to their customers, a reason cited by the Federal
Reserve Board for the lack of accelerating price inflation.
Despite this sanguine price environment, consumers remained wary spenders
and modest borrowers, and retail sales growth has been moderate.
Nevertheless, the decline in mortgage rates spurred the housing market at
year-end. Existing home sales increased in November for the first time in six
months. New housing starts also rose sharply, with the late-year increase the
largest monthly rise since July 1995. Job growth has eased over recent
months, with the monthly increase in non-farm payrolls at about half the rate
earlier in the year.
Lending optimism to the prospect for continued economic growth was the
report from The Conference Board (a private research group) that its Index of
Leading Economic Indicators rose for the tenth consecutive month in November.
An increase in this index generally correlates with economic expansion over
the next three to twelve months. Manufacturing remained firm all year, with
both factory orders and industrial production rising moderately. Despite this
overall strength in production, there were some signs of moderation at
year-end. Inventories have built up and orders for durable goods (those items
intended to last three or more years) showed a surprising 1.6% decline in
November. This marked the first month-to-month drop in durable good orders
since August.
Last year, low inflation and moderate economic growth stayed the Federal
Reserve Board's hand from raising interest rates. With the economy now in its
sixth year of expansion, we remain particularly alert to signs of a maturing
business cycle and the potential rekindling of inflationary pressures.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
The strong fixed-income returns of 1995 did not carry over into 1996,
which was a year plagued by volatility. Overall, the yield on the benchmark
30-year Treasury ended the year at 6.64%, 72 basis points higher than its
level at the beginning of the year. The bond market declined in February as
the prospect for a balanced budget amendment dimmed and economic data
suggested possible inflationary pressures. From March through September, the
rates on long-term Treasuries fluctuated between 6.8% and 7.2% as investors
reacted to economic data that provided mixed signals regarding
inflation. In September, the Fed surprised investors with its decision not to
raise interest rates. This sparked a brief rally which brought rates down
from over 7% in early September to 6.35% at the end of November. Comments by
Federal Reserve Board Chairman Alan Greenspan in early December shook the
financial markets. The fixed-income market interpreted his comments as a
change in the economic viewpoint of the Federal Reserve and as a warning that
a tighter monetary policy may be on the horizon.
During the Fund's reporting period, the Fund has found value in specific
parts of the corporate and mortgage sectors. In particular, the finance
sector has offered excellent relative value. Valuations in the mortgage
sector appear attractive given our overall view that interest rates will
remain in a trading range or trend slightly higher. Accordingly, at year-end
we increased our allocation in the mortgage sector. We have maintained our
position in high-yield securities and continue to see investment opportunity
in the below-investment grade sector for companies with improving credit
characteristics. We intend to continue to focus on security selection across
all sectors as the primary method to add value in this investment
environment.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[ Arthur J. MacBride signature logo]
Arthur J. MacBride
Portfolio Manager
January 15, 1997
New York, N.Y.
* Distribution rate per share is based upon dividends per share paid from
net investment income during the period (annualized), divided by the maximum
offering price in the case of Class A shares or the net asset value per share
in the case of Class B, Class C and Class R shares at the end of the period.
**Total return includes reinvestment of dividends and any capital gains paid
without taking into account the maximum initial sales charge in the case of
Class A shares or the applicable contingent deferred sales charge imposed on
redemptions in the case of Class B and Class C shares.
*** SOURCE: LEHMAN BROTHERS - The Lehman Brothers Aggregate Bond Index is
a widely accepted index of corporate, government and government agency debt
instruments.
PREMIER MANAGED INCOME FUND DECEMBER 31, 1996
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER MANAGED INCOME
FUND CLASS A SHARES AND THE LEHMAN BROTHERS AGGREGATE BOND INDEX
$22,547
Lehman Brothers
Aggregate Bond Index*
Dollars
$20,595
Premier Managed
Income Fund
(Class A Shares)
*Source: Lehman Brothers
[Exhibit A]
<TABLE>
<CAPTION>
Average Annual Total Returns
Class A Shares Class B Shares
_________________________________________________________________ ___________________________________________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 12/31/96 Sales Charge Sales Charge (4.5%) Period Ended 12/31/96 Redemption Redemption*
______________________ ____________ __________________ _____________________ ___________ ______________
<S> <C> <C> <C> <C> <C>
1 Year 3.42% (1.22)% 1 Year 2.54% (1.33)%
5 Years 7.47 6.49 From Inception (12/19/94) 8.89 7.53
10 Years 7.99 7.49
Class C Shares Class R Shares
_________________________________________________________________ ___________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 12/31/96 No Redemption Redemption** Period Ended 12/31/96
______________________ _____________ _______________ _____________________
1 Year 2.49% 1.53% 1 Year 3.58%
From Inception (12/19/94) 8.86 8.86 From Inception (2/1/93) 7.05
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of
Premier Managed Income Fund on 12/31/86 to a $10,000 investment made in the
Lehman Brothers Aggregate Bond Index on that date. All dividends and capital
gain distributions are reinvested. Performance for Class B, Class C and Class
R shares will vary from the performance of Class A shares shown above due to
differences in charges and expenses.
Premier Managed Income Fund seeks high current income consistent with what is
believed to be prudent risk of capital primarily through investments in
investment-grade corporate and U.S. Government obligations and in obligations
having maturities of 10 years or less. The Fund's performance shown in the
line graph takes into account the maximum initial sales charge on Class A
shares and all other applicable fees and expenses. The Lehman Brothers
Aggregate Bond Index is a widely accepted, unmanaged index of corporate,
government and government agency debt instruments. The Index does not take
into account charges, fees and other expenses. Further information relating
to Fund performance, including expense reimbursements, if applicable, is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
* The maximum contingent deferred sales charge for Class B shares is 4% and
is reduced to 0% after six years.
**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1996
Principal
Convertible Subordinated Debentures-.8% Amount Value
__________ ____________
<S> <C> <C> <C> <C>
Foreign; Rogers Communications,
2%, 2005.............................
(cost $724,876)...................... $ 1,405,000 $ 779,775
_____________
Bonds and Notes-99.0%
Aircraft & Aerospace-.7% BE Aerospace,
Sr. Sub. Notes, 9 7/8%, 2006......... 300,000 316,500
K&F Industries,
Sr. Sub. Notes, 10 3/8%, 2004........ 320,000 339,200
_____________
655,700
_____________
Banking-5.5%.. First National Bank of Boston,
Sub. Notes, 7 3/8%, 2006............. 758,000 770,609
First Nationwide Holdings,
Sr. Sub. Notes, 10 5/8%, 2003........ 350,000 (a) 379,750
First Security,
Sr. Notes, 6 7/8%, 2006.............. 670,000 655,726
First USA Bank,
Medium-Term Notes, 8.10%, 1997....... 710,000 711,950
First Union Institutional Capital II,
Gtd. Capital Securities, 7.85%, 2027. 445,000 (a) 440,939
Fleet Financial Group,
Sub. Notes, 7 1/8%, 2006............. 400,000 399,382
NationsBank,
Sub. Notes, 7 1/2%, 2006............. 882,000 906,897
Sanwa Business Credit,
Notes, 7 1/4%, 2001.................. 925,000 (a) 943,223
_____________
5,208,476
_____________
Broadcasting & Media-2.8% Cablevision Systems,
Sr. Sub. Notes, 9 7/8%, 2006......... 125,000 128,906
Century Communications,
Sr. Notes, 9 1/2%, 2000.............. 600,000 619,500
Comcast,
Sr. Sub. Deb., 9 3/8%, 2005.......... 400,000 417,000
JCAC (Gtd. by Jacor Communications),
Sr. Sub. Notes, 10 1/8%, 2006........ 400,000 417,000
LodgeNet Entertainment,
Sr. Notes, 10 1/4%, 2006............. 600,000 (a) 600,750
News America Holdings,
Gtd. Sr. Notes, 8 5/8%, 2003......... 365,000 392,399
Tele-Communications,
Medium-Term Notes, 7.13%, 1998....... 100,000 100,594
_____________
2,676,149
_____________
Building &
Construction-.1% American Standard,
Sr. Notes, 10 7/8%, 1999............. 100,000 107,000
_____________
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
_________ _________
Consumer-5.4% CPC International,
Medium-Term Notes, Ser. D, 6 7/8%, 2003 $ 875,000 $ 885,088
E&S Holdings,
Sr. Sub. Notes, 10 3/8%, 2006........ 400,000 (a) 420,500
Federated Department Stores,
Sr. Notes, 8 1/8%, 2002.............. 125,000 128,164
International Semi-Tech Microelectronics,
Sr. Secured Discount Notes,
Zero Coupon, 2000.................... 450,000 (b) 293,625
Loewen Group International,
Gtd. Sr. Notes, Ser. I, 7 1/2%, 2001. 200,000 199,976
Muzak L.P./Capital,
Sr. Notes, 10%, 2003................. 400,000 411,000
Prime Succession Acquisition,
Sr. Sub. Notes, 10 3/4%, 2004........ 130,000 (a) 141,375
Revlon Worldwide,
Sr. Secured Discount Notes,
Zero Coupon, 1998.................... 400,000 349,000
Rite Aid,
Notes, 6.70%, 2001................... 200,000 199,939
Safeway,
Sr. Sub. Deb., 9.65%, 2004........... 150,000 168,376
Sears Roebuck Acceptance,
Medium-Term Notes:
Ser. I, 5.60%, 1998 535,000 530,105
Ser. I, 5.71%, 2001 305,000 296,138
Ser. II, 6.69%, 2001 930,000 934,635
Southland,
Sr. Sub. Deb., 5%, 2003.............. 250,000 208,125
_____________
5,166,046
_____________
Energy-2.4% Chesapeake Energy,
Sr. Notes, 9 1/8%, 2006.............. 726,000 756,855
Flores & Rucks,
Sr. Sub. Notes, 9 3/4%, 2006......... 500,000 531,250
Gulf Canada Resources Ltd.,
Sr. Sub. Deb., 9 5/8%, 2005.......... 400,000 435,000
HS Resources,
Sr. Sub. Notes, 9 1/4%, 2006......... 205,000 (a) 210,638
NorAm Energy,
Notes, 7 1/2%, 2000.................. 100,000 102,833
Norcen Energy Resources Ltd.,
Deb., 7 3/8%, 2006................... 165,000 167,256
Oryx Energy,
Notes, 10%, 2001..................... 80,000 87,783
_____________
2,291,615
_____________
Finance-9.6% Aetna/Travelers Life and Casualty,
Notes, 6 3/4%, 2001.................. 380,000 382,033
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
____________ ____________
Finance (continued) Associates Corp. of North America, Sr. Notes:
6 5/8%, 2001......................... $ 280,000 $ 280,538
6 3/4%, 2001......................... 225,000 226,313
6 3/4%, 2001......................... 210,000 211,350
Dollar Financial Group,
Sr. Notes, 10 7/8%, 2006............. 300,000 (a) 310,500
GMAC,
Notes, 6 7/8%, 2001.................. 780,000 784,689
H.F. Ahmanson & Co.,
Medium-Term Notes, Ser. A, 7.65%, 2000 630,000 651,908
Lehman Brothers,
Sr. Sub. Notes, 6 1/8%, 2001......... 400,000 389,789
Lehman Brothers Holdings:
Medium-Term Notes:
Ser. D, 6 1/8%, 1998 230,000 228,426
Ser. E, 6.65%, 1998 615,000 617,867
Notes, 7 1/4%, 2003.................. 345,000 346,487
Lincoln National,
Deb., 7 1/4%, 2005................... 770,000 772,584
McDonnell Douglas Financial Services,
Medium-Term Notes, Ser. B, 6.53%, 1998 245,000 (a) 245,803
Merrill Lynch & Co.,
Notes, 7 3/8%, 2006.................. 670,000 684,908
Paine Webber Group,
Medium-Term Sr. Notes, Ser. C, 7.31%, 2000 1,093,000 1,110,189
Notes, 7 5/8%, 2008.................. 445,000 448,293
Prudential Insurance Company of America,
Surplus Notes, 7.65%, 2007........... 117,000 (a) 119,705
Smith Barney Holdings, Notes:
7 7/8%, 1999......................... 1,000,000 1,036,126
7 1/8%, 2006......................... 325,000 324,274
_____________
9,171,782
_____________
Finance/
Asset Backed-6.8% Asset Securitization,
Commercial Mortgage Pass-Through Ctfs.,
Ser. 1996-MD VI, Cl. A-1C, 7.04%, 2026 780,000 781,584
Capita Equipment Receivables Trust,
Receivable-Backed Notes,
Ser. 1996-1, Cl. A-3, 6.11%, 1999.... 1,190,000 1,191,859
Centrex Auto Trust,
Asset Backed Notes,
Ser. 1996-B, Cl. A, 6.15%, 2004...... 549,000 (a) 547,284
EQCC Home Equity Loan Trust,
Asset Backed Ctfs.:
Ser. 1993-3, 5.15%, 2008 643,208 612,733
Ser. 1996-1, Cl. A-2, 5.82%, 2009 627,000 619,996
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
__________ __________
Finance/
Asset Backed (continued) Ford Credit Auto Owner Trust,
Asset Backed Notes,
Ser. 1996-A, Cl. A-3, 6 1/2%, 1999... $ 640,000 $ 645,715
TMS Home Equity Trust,
Asset Backed Ctfs.:
Ser. 1994-B, Cl. A-4, 7.60%, 2021 359,000 368,126
Ser. 1994-C, Cl. A-4, 7.80%, 2021 245,000 252,595
Ser. 1996-C, Cl. A-6, 7.69%, 2024 637,000 655,065
UACSC Auto Trust,
Automobile Receivable Backed Ctfs.,
Ser. 1996-D, Cl. A-2, 6.17%, 2002.... 808,000 803,798
_____________
6,478,755
_____________
Foreign-8.0% ANZ Banking Group Ltd.,
Sub. Notes, 7.55%, 2006.............. 755,000 782,142
Aegon N.V.,
Sub. Notes, 8%, 2006................. 972,000 1,035,245
BHP Finance (USA) Ltd.
(Gtd. by Broken Hill Proprietary Ltd.),
Notes, 6.69%, 2006................... 967,000 945,898
China International Trust and Investment,
Bonds, 6 7/8%, 2003.................. 1,000,000 963,466
Hanson Overseas B.V.,
Gtd. Sr. Notes, 6 3/4%, 2005......... 619,000 607,391
Malayan Banking Berhad,
Sub. Notes, 7 1/8%, 2005............. 160,000 159,330
Midland Bank plc,
Sub. Notes, 7 5/8%, 2006............. 519,000 536,937
People's Republic of China,
Bonds, 7 3/4%, 2006.................. 610,000 624,797
Petroliam Nasional Berhad,
Bonds, 7 5/8%, 2026.................. 890,000 (a) 903,022
Stone-Consolidated,
Sr. Secured Notes, 10 1/4%, 2000..... 470,000 500,550
Wharf Capital International Ltd.,
Gtd. Notes, 8 7/8%, 2004............. 490,000 515,634
_____________
7,574,412
_____________
Hospital Related-1.9% Genesis Health Ventures,
Sr. Sub. Notes, 9 1/4%, 2006......... 310,000 (a) 320,075
Integrated Health Services,
Sr. Sub. Notes, 9 5/8%, 2002......... 400,000 414,000
Tenet Healthcare,
Sr. Notes, 9 5/8%, 2002.............. 620,000 682,000
Universal Health Services,
Sr. Notes, 8 3/4%, 2005.............. 380,000 391,875
_____________
1,807,950
_____________
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
__________ __________
Industrial-8.1% ADT Operations,
Gtd. Sr. Notes, 8 1/4%, 2000......... $ 100,000 $ 104,458
Building Materials Corp. of America,
Sr. Notes, 8 5/8%, 2006.............. 490,000 (a) 490,000
ConAgra,
Sr. Notes, 7 1/8%, 2006.............. 670,000 (c) 684,267
Goss Graphic Systems,
Sr. Sub. Notes, 12%, 2006............ 175,000 181,125
Iron Mountain,
Sr. Sub. Notes, 10 1/8%, 2006........ 600,000 639,000
Lear Seating,
Sub. Notes, 8 1/4%, 2002............. 485,000 491,063
Lockheed Martin:
Gtd. Deb., 7 3/4%, 2026.............. 1,235,000 1,289,778
Gtd. Notes, 7 1/4%, 2006............. 405,000 412,074
Newport News Shipbuilding,
Sr. Notes, 8 5/8%, 2006.............. 300,000 (a) 308,250
Plastic Containers,
Sr. Secured Notes, 10%, 2006......... 325,000 (a) 334,750
Pohang Iron & Steel, Ltd.,
Notes, 7 3/8%, 2005.................. 845,000 858,051
Rayovac,
Sr. Sub. Notes, 10 1/4%, 2006........ 300,000 (a) 309,000
Safelite Glass,
Sr. Sub Notes, 9 7/8%, 2006.......... 250,000 (a) 258,750
Speedy Muffler King,
Sr. Notes, 10 7/8%, 2006............. 480,000 517,200
USG,
Sr. Notes, Ser. B, 9 1/4%, 2001...... 400,000 424,986
Valassis Inserts,
Sr. Sub. Notes, 9 3/8%, 1999......... 440,000 451,228
_____________
7,753,980
_____________
Metals-.8% Kaiser Aluminum & Chemical,
Sr. Notes, 10 7/8%, 2006............. 350,000 (a) 370,125
U.S. Can,
Sr. Sub. Notes, 10 1/8%, 2006........ 350,000 (a) 369,250
_____________
739,375
_____________
Paper-.7% Fort Howard,
Sr. Notes, 9 1/4%, 2001.............. 400,000 417,000
Stone Container,
First Mortgage Notes, 10 3/4%, 2002.. 210,000 222,075
_____________
639,075
_____________
Railroad-1.2% Burlington Northern Railroad Trust,
Pass Through Ctfs.,
Ser. 1996-B, 6.96%, 2009............. 430,000 432,580
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
______ ______
Railroad (continued) Union Pacific,
Notes, 6.70%, 2006................... $ 715,000 $ 696,214
_____________
1,128,794
_____________
Telecommunications-2.4% 360 Communications,
Sr. Notes, 7 1/8%, 2003.............. 225,000 222,716
MFS Communications,
Sr. Discount Notes, Zero Coupon, 2001 600,000 (d) 444,750
Paging Network,
Sr. Sub. Notes, 10%, 2008............ 450,000 458,438
Teleport Communications Group,
Sr. Notes, 9 7/8%, 2006.............. 400,000 430,000
Vanguard Cellular Systems,
Sr. Deb., 9 3/8%, 2006............... 700,000 710,500
_____________
2,266,404
_____________
Textiles-1.1% Dominion Textile (USA),
Gtd. Sr. Notes, 8 7/8%, 2003......... 400,000 407,000
WestPoint Stevens,
Sr. Notes, 8 3/4%, 2001.............. 615,000 632,681
_____________
1,039,681
_____________
Utilities-1.4% El Paso Electric,
First Mortgage Bonds, Ser. A, 7 1/4%, 1999 740,000 744,625
Ferrellgas Partners Finance/Partners, L.P.,
Sr. Secured Notes, 9 3/8%, 2006...... 485,000 494,094
Ohio Edison,
First Mortgage Bonds, 8 3/4%, 1998... 110,000 112,598
_____________
1,351,317
_____________
U.S. Government
Agencies-36.2% Federal National Mortgage Association:
6.097%, 2/1/2031..................... 493,922 (e) 492,071
6 1/2%, 4/1/2003-5/1/2026............ 3,425,562 3,307,015
7%, 7/1/2003-11/1/2026............... 9,488,086 (f) 9,433,941
7.43%, 8/1/2006...................... 596,463 604,850
7 1/2%, 10/1/2003-10/1/2011.......... 3,199,562 3,248,458
7.536%, 6/1/2016..................... 962,474 982,025
8%, 10/1/2010-6/1/2026............... 5,843,993 5,974,025
9%, 4/1/2025-6/1/2026................ 3,335,116 3,520,559
14 3/4%, 8/1/2012.................... 33,746 38,797
Multifamily REMIC Trust,
Gtd. REMIC Pass-Through Ctfs.,
Ser. 1996-M7, Cl. B, 6.856%, 6/17/2011 320,000 (e) 317,600
Real Estate Mortgage Investment
Conduit Trust, Pass-Through Ctfs.
(Collateralized by FNMA Pass-Through Ctfs.),
Ser. G92-20, Cl. SA, 468 7/8%, 4/25/2022
(Interest Only Obligation) (e,g) 192,881
PREMIER MANAGED INCOME FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Bonds and Notes (continued) Amount Value
__________ __________
U.S Government
Agencies (continued) Government National Mortgage Association I:
7 1/2%, 12/15/2023-12/15/2026........ $ 2,909,660 (f) $ 2,918,137
8 1/2%, 12/15/2021................... 967,908 1,006,925
Government National Mortgage Association II:
7%, 6/20/2026........................ 1,465,111 1,427,106
8%, 11/20/2026....................... 1,065,918 1,082,899
_____________
34,547,289
_____________
U.S. Government-3.9% U.S. Treasury Bonds:
11 3/4%, 2/15/2010................... 318,000 422,542
7 1/4%, 5/15/2016.................... 2,568,000 2,712,450
7 1/8%, 2/15/2023.................... 248,000 258,928
U.S. Treasury Notes,
7 1/4%, 8/15/2004.................... 324,000 341,162
_____________
3,735,082
_____________
TOTAL BONDS AND NOTES
(cost $93,572,005)................... $94,338,882
==============
Short-Term Investments-.8%
Commercial Paper; Ford Motor Credit,
7.10%, 1/2/1997
(cost $755,000)...................... $ 755,000 $ 755,000
==============
TOTAL INVESTMENTS (cost $95,051,881)........................................ 100.6% $95,873,657
======== ==============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (.6%) $ (608,435)
======== ==============
NET ASSETS.................................................................. 100.0% $95,265,222
======== ==============
Notes to Statements of Investments:
(a) Securities exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
December 31, 1996, these securities amounted to $8,023,689 or 8.4% of net
assets.
(b) Zero Coupon until 8/15/2000, date on which a stated coupon rate of
11 1/2% becomes effective; the stated maturity date is 8/15/2003.
(c) Reflects date security can be redeemed at holder's option; the
stated maturity is 10/1/2026.
(d) Zero coupon until 1/15/2001, date on which a stated coupon rate of 8
7/8% becomes effective; the stated maturity is 1/15/2006.
(e) Variable rate security-interest rate subject to periodic change.
(f) Partially purchased on a forward commitment basis.
(g) Nominal face $15,308.
See notes to financial statements.
PREMIER MANAGED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
Cost Value
____________ ____________
ASSETS: Investments in securities-See Statement of Investments $ 95,051,881 $ 95,873,657
Receivable for investment securities sold.. 2,610,281
Interest receivable........................ 1,202,685
____________
99,686,623
____________
LIABILITIES: Due to The Dreyfus Corporation............. 57,142
Due to Distributor......................... 20,899
Cash overdraft due to Custodian............ 114,655
Payable for investment securities purchased 3,190,947
Payable for shares of Beneficial Interest redeemed 1,037,758
____________
4,421,401
____________
NET ASSETS.................................................................. $ 95,265,222
=============
REPRESENTED BY: Paid-in capital............................ $102,697,424
Accumulated net realized gain (loss) on investments (8,253,978)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 3 821,776
____________
NET ASSETS.................................................................. $ 95,265,222
=============
NET ASSET VALUE PER SHARE
_______________________________
Class A Class B Class C Class R
_____________ ______________ _______________ ________________
Net Assets...................... $ 77,304,888 $ 4,973,026 $ 420,12 $ 12,567,181
Shares Outstanding..................... 7,206,339 463,576 39,155 1,171,741
NET ASSET VALUE PER SHARE............ $10.73 $10.73 $10.73 $10.73
======== ======= ======== ========
See notes to financial statements.
PREMIER MANAGED INCOME FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME
INCOME Interest Income............................ $ 7,043,422
EXPENSES: Management fee-Note 2(a)................... $ 653,857
Distribution and service fees-Note 2(b).... 233,817
Trustees' fees and expenses-Note 2(c)...... 9,146
___________
Total Expenses......................... 896,820
____________
INVESTMENT INCOME-NET....................................................... 6,146,602
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 3:
Net realized gain (loss) on investments.... $ (576,926)
Net unrealized appreciation (depreciation) on investments (2,599,839)
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (3,176,765)
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 2,969,837
=============
See notes to financial statements.
PREMIER MANAGED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1996 December 31, 1995
___________________ ___________________
OPERATIONS:
Investment income-net.......................................... $ 6,146,602 $ 6,556,543
Net realized gain (loss) on investments........................ (576,926) (862,188)
Net unrealized appreciation (depreciation) on investments...... (2,599,839) 9,120,356
___________________ ___________________
Net Increase (Decrease) in Net Assets Resulting from Operations 2,969,837 14,814,711
___________________ ___________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares............................................... (5,098,797) (5,668,955)
Class B shares............................................... (204,999) (55,908)
Class C shares............................................... (9,243) (1,493)
Class R shares............................................... (832,063) (797,413)
___________________ ___________________
Total Dividends............................................ (6,145,102) (6,523,769)
___________________ ___________________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares............................................... 11,645,529 10,220,352
Class B shares............................................... 3,058,864 2,207,592
Class C shares............................................... 417,763 87,477
Class R shares............................................... 5,288,706 6,078,239
Dividends reinvested:
Class A shares............................................... 4,086,892 4,488,158
Class B shares............................................... 94,447 29,712
Class C shares............................................... 2,065 405
Class R shares............................................... 747,833 647,434
Cost of shares redeemed:
Class A shares............................................... (16,479,953) (20,718,702)
Class B shares............................................... (359,304) (68,609)
Class C shares............................................... (65,122) (22,587)
Class R shares............................................... (4,614,714) (5,758,344)
___________________ ___________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 3,823,006 (2,808,873)
___________________ ___________________
Total Increase (Decrease) in Net Assets.................. 647,741 5,482,069
NET ASSETS:
Beginning of Period............................................ 94,617,481 89,135,412
___________________ ___________________
End of Period.................................................. $ 95,265,222 $ 94,617,481
=================== ===================
DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME-NET................. __ $ (1,500)
___________________ ___________________
See notes to financial statements.
PREMIER MANAGED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
____________________________________________
Year Ended Year Ended
December 31, 1996 December 31, 1995
___________________ ___________________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold...................................................... 1,074,433 973,428
Shares issued for dividends reinvested........................... 383,665 420,887
Shares redeemed.................................................. (1,542,448) (1,961,160)
___________________ ___________________
Net Increase (Decrease) in Shares Outstanding (84,350) (566,845)
=================== ===================
Class B
________
Shares sold...................................................... 286,510 205,379
Shares issued for dividends reinvested........................... 8,877 2,738
Shares redeemed.................................................. (33,651) (6,278)
___________________ ___________________
Net Increase (Decrease) in Shares Outstanding 261,736 201,839
=================== ===================
Class C
________
Shares sold...................................................... 39,075 8,049
Shares issued for dividends reinvested........................... 193 37
Shares redeemed.................................................. (6,124) (2,076)
___________________ ___________________
Net Increase (Decrease) in Shares Outstanding 33,144 6,010
=================== ===================
Class R
________
Shares sold...................................................... 493,176 574,177
Shares issued for dividends reinvested........................... 70,200 60,440
Shares redeemed.................................................. (432,290) (541,031)
___________________ ___________________
Net Increase (Decrease) in Shares Outstanding 131,086 93,586
=================== ===================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER MANAGED INCOME FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Class A Shares
________________________________________________________________________
Year Ended December 31,
________________________________________________________________________
PER SHARE DATA: 1996 1995 1994(1)(2) 1993(1)(3) 1992(1)
_______ _______ ________ ________ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $11.08 $10.12 $11.38 $11.45 $11.41
_______ _______ ________ ________ _______
Investment Operations:
Investment income-net....................... .69 .75 .69(4) .78(4) .87
Net realized and unrealized gain (loss)
on investments............................. (.35) .96 (1.26) .83 .10
_______ _______ ________ ________ _______
Total from Investment Operations............. .34 1.71 (.57) 1.61 .97
_______ _______ ________ ________ _______
Distributions:
Dividends from investment income-net......... (.69) (.75) (.69) (.75) (.87)
Dividends in excess of investment income-net. -- -- -- -- (.06)
Dividends from net realized gain on investments -- -- -- (.57) --
Dividends in excess of net realized
gain on investments -- -- -- (.36) --
_______ _______ ________ ________ _______
Total Distributions.......................... (.69) (.75) (.69) (1.68) (.93)
_______ _______ ________ ________ _______
Net asset value, end of period............... $10.73 $11.08 $10.12 $11.38 $11.45
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(5)....................... 3.42% 17.32% (5.14%) 14.54% 8.77%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .95% .95% .98%(6) 1.14%(6) 1.02%
Ratio of net investment income
to average net assets...................... 6.48% 7.08% 6.32% 6.55% 7.58%
Portfolio Turnover Rate...................... 251.66% 236.10% 270.00% 333.00% 216.00%
Net Assets, end of period (000's Omitted)... $77,305 $80,782 $79,548 $58,052 $98,207
_________________________
(1) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the
Institutional Class and the Investment Class of shares. Effective April
4, 1994 the Retail and Institutional Classes were reclassified as a single
class of shares known as the Investor shares. On October 17, 1994 Investor
shares were redesignated Class A shares. The amounts shown for the year
ended December 31, 1994 were calculated using the performance of a Retail
Class share outstanding from January 1, 1994 to April 3, 1994 and the
performance of an Investor (now Class A) share outstanding from April 4,
1994 to December 31, 1994. The Financial Highlights for the year ended
December 31, 1993 and prior years are based upon a Retail Class share
outstanding.
(2) 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, N.A. served as the Fund's
investment manager. Effective October 17, 1994, The Dreyfus Corporation
serves as the Fund's investment manager.
(3) Per share amounts have been calculated using the monthly average
share method, which more appropriately presents the per
share data for this year since the use of the undistributed net
investment income method did not accord with results of operations.
(4) Net investment income before voluntary waiver of fees or
reimbursement of expenses by the investment adviser for the
year ended December 31, 1994 was $.69. Net investment income before
waiver of fees and/or reimbursement of expenses by the investment adviser,
transfer agent, and distributor, for the year ended December 31, 1993 was
$.77.
(5) Exclusive of sales load.
(6) Without the voluntary reimbursement of expenses and/or waiver of fees
by the investment adviser and/or transfer agent,
and/or distributor, the ratio of expenses to average net assets for the
years ended December 31, 1994 and 1993 would have been .99% and 1.27%
respectively.
See notes to financial statements.
PREMIER MANAGED INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.(1)
Class B Shares Class C Shares
______________________ ______________________
Year Ended December 31, Year Ended December 31,
_________________________ _________________________
PER SHARE DATA: 1996 1995 1996 1995
_______ _______ _______ _______
Net asset value, beginning of period.................. $11.08 $10.12 $11.08 $10.12
_______ _______ _______ _______
Investment Operations:
Investment income-net................................. .61 .67 .61 .67
Net realized and unrealized gain (loss)
on investments...................................... (.35) .96 (.35) .96
_______ _______ _______ _______
Total from Investment Operations...................... .26 1.63 .26 1.63
_______ _______ _______ _______
Distributions:
Dividends from investment income-net.................. (.61) (.67) (.61) (.67)
_______ _______ _______ _______
Net asset value, end of period........................ $10.73 $11.08 $10.73 $11.08
======= ======= ======= =======
TOTAL INVESTMENT RETURN(2)................................ 2.54% 16.55% 2.49% 16.54%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... 1.70% 1.69% 1.68% 1.66%
Ratio of net investment income
to average net assets............................... 5.77% 6.41% 5.69% 6.03%
Portfolio Turnover Rate............................... 251.66% 236.10% 251.66% 236.10%
Net Assets, end of period (000's Omitted)............. $4,973 $2,236 $420 $67
(1) The Fund commenced offering Class B and Class C shares on
December 19, 1994. Financial Highlights for the period ended
December 31, 1994 for Class B and Class C shares are not present because
no shares have been issued to the public as of this date.
(2) Exclusive of sales load.
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER MANAGED INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.(1)
Class R Shares
___________________________________________________________
Period Ended
Year Ended December 31, December 31,
______________________________________ _______________
PER SHARE DATA: 1996 1995 1994(1)(2) 1993(1)(3)
_________ _________ _________ _______________
Net asset value, beginning of period................... $11.08 $10.12 $11.38 $11.62
_______ _______ _______ ________
Investment Operations:
Investment income-net.................................. .72 .78 .72(4) .74(4)
Net realized and unrealized gain (loss)
on investments....................................... (.35) .96 (1.26) .67
_______ _______ _______ ________
Total from Investment Operations....................... .37 1.74 (.54) 1.41
_______ _______ _______ ________
Distributions:
Dividends from investment income-net................... (.72) (.78) (.72) (.71)
Dividends from net realized gain on investments........ -- -- -- (.61)
Dividends in excess of net realized
gain on investments -- -- -- (.33)
_______ _______ _______ ________
Total Distributions.................................... (.72) (.78) (.72) (1.65)
_______ _______ _______ ________
Net asset value, end of period......................... $10.73 $11.08 $10.12 $11.38
====== ====== ====== ========
TOTAL INVESTMENT RETURN(5)................................. 3.58% 17.71% (4.88%) 12.59%(6)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................ .70% .70% .71%(7) .83%(6)(7)
Ratio of net investment income
to average net assets................................ 6.74% 7.31% 6.59% 6.86%(6)
Portfolio Turnover Rate................................ 251.66% 236.10% 270.00% 333.00%(8)
Net Assets, end of period (000's Omitted)........ $12,567 $11,532 $9,588 $1,338
(1) On February 1, 1993, the Fund commenced selling Investment
Class shares. Effective April 4, 1994 the Investment Class
shares were redesignated as the Trust shares. On October 17, 1994 the
Trust shares were redesignated Class R shares.
(2) 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, N.A. served as the Fund's
investment manager. Effective October 17, 1994, The Dreyfus Corporation
serves as the Fund's investment manager.
(3) Per share amounts have been calculated using the monthly average
share method, which more appropriately presents the per share data for
this period since the use of the undistributed net investment income
method did not accord with results of operations.
(4) Net investment income before voluntary waiver of fees or
reimbursement of expenses by the investment adviser for the
year ended December 31, 1994 was $.71. Net investment income before
waiver of fees and/or reimbursement of expenses by the investment adviser,
transfer agent, and distributor, for the period ended December 31, 1993 was
$.74.
(5) Exclusive of sales load.
(6) Annualized.
(7) Without the voluntary reimbursement of expenses and/or waiver of
fees by the investment adviser and transfer agent, the
ratio of expenses to average net assets for the years ended December 31,
1994 and 1993 would have been .72% and .87%, respectively.
(8) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PREMIER MANAGED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1- SIGNIFICANT ACCOUNTING POLICIES:
The Dreyfus/Laurel Funds Trust (the "Trust") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering three
series including the Premier Managed Income Fund (the "Fund"). The Fund's
investment objective is to seek high current income consistent with what is
believed to be prudent risk of capital primarily through investments in
investment-grade corporate and U.S. Government obligations and in obligations
having maturities of 10 years or less. The Dreyfus Corporation ("Manager")
serves as the Fund's investment manager. The Manager is a direct subsidiary
of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an
unlimited number of shares of Beneficial Interest in the following classes of
shares: Class A, Class B, Class C and Class R. Class A, Class B and Class C
shares are sold primarily to retail investors through financial
intermediaries and bear a distribution fee and/or service fee. Class A shares
are sold with a front-end sales charge, while Class B and Class C shares are
subject to a contingent deferred sales charge ("CDSC") and a service fee.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee or service
fee. Class R shares are offered without a front-end sales load or CDSC. Each
class of shares has identical rights and privileges, except with respect to
distribution fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: The Fund's investments (excluding short-term
investments and U.S. Government obligations) are valued each business day by
an independent pricing service ("Service") approved by the Board of Trustees.
Investments for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the
Service from dealers in such securities) and asked prices (as calculated by
the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from dealers;
and general market conditions. Securities for which there are no such
valuations are valued at fair value as determined in good faith under the dire
ction of the Board of Trustees. Investments in U.S. Government obligations
are valued at the mean between quoted bid and asked prices. Short-term
investments are carried at amortized cost, which approximates value.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recorded on the ex-dividend date. Interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(C) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund to
declare dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain, if any, are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can be offset by
capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
PREMIER MANAGED INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such
qualification is in the best interests of its shareholders, by complying with
the applicable provisions of the Internal Revenue Code, and to make
distributions of taxable income sufficient to relieve it from substantially
all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $8,217,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1996. The
carryover does not include net realized securities losses from November 1,
1996 through December 31, 1996 which are treated, for Federal income tax
purposes, as arising in fiscal 1997. If not applied, $6,470,000 of the
carryover expires in fiscal 2002, $540,000 of the carryover expires in fiscal
2003, and $1,207,000 of the carryover expires in fiscal 2004.
NOTE 2-INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties or affiliates to provide investment advisory, administrative,
custody, fund accounting and transfer agency services to the Fund. The
Manager also directs the investments of the Fund in accordance with its
investment objective, policies and limitations. For these services, the Fund
is contractually obligated to pay the Manager a fee, calculated daily and
paid monthly, at the annual rate of .70% of the value of the Fund's average
daily net assets. Out of its fee, the Manager pays all of the expenses of the
Fund except brokerage fees, taxes, interest, Rule 12b-1 distribution fees and
expenses, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to
reduce its fee in an amount equal to the Fund's allocable portion of fees and
expenses of the non-interested Trustees (including counsel).
(B) DISTRIBUTION AND SERVICE PLAN: The Fund has adopted a distribution
plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, the Fund may pay annually up to .25%
of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the
sale of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .75% of the value of the average daily net assets of Class B and
Class C shares. Class B and Class C shares are also subject to a service plan
adopted pursuant to Rule 12b-1, pursuant to which the Fund pays Dreyfus
Service Corporation or the Distributor for providing certain services to the
holders of Class B and Class C shares a fee at the annual rate of .25% of the
value of the average daily net assets of Class B and Class C shares. Class R
shares bear no service or distribution fee. For the period ended December 31,
1996, the distribution fee for Class A, Class B and Class C shares was
$196,636, $26,667 and $1,219, respectively. During the period ended December
31, 1996, the service fee for Class B and Class C shares was $8,889 and $406,
respectively.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Trustees who are not "interested persons" of the Trust and who have no direct
or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(C) TRUSTEES' FEES: Each trustee who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee meeting attended and is reimbursed
for travel and out-of-pocket expenses. These expenses are paid in total by
the following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel
Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the
Chairman of the Board receives an annual fee of $75,000 per year. These fees
and expenses are charged and allocated to each series
PREMIER MANAGED INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
based on net assets.
NOTE 3- SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the period
ended December 31, 1996 amounted to $239,911,562 and $233,198,317,
respectively.
At December 31, 1996, accumulated net unrealized appreciation on
investments was $821,776, consisting of $1,497,046 gross unrealized
appreciation and $675,270 gross unrealized depreciation.
At December 31, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 4-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ended December 31, 1996, the Fund did not
borrow under the line of credit.
PREMIER MANAGED INCOME FUND
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL FUNDS TRUST:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier Managed Income Fund of The
Dreyfus/Laurel Funds Trust as of December 31, 1996, and the related statement
of operations for the year then ended, the statements of changes in net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the three-year period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for each of the years or periods in the
two-year period ended December 31, 1993 were audited by other auditors whose
report thereon, dated February 14, 1994, expressed an unqualified opinion on
those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of December 31, 1996, by correspondence with the
custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Managed Income Fund of The Dreyfus/Laurel Funds Trust as
of December 31, 1996, the results of its operations for the year then ended,
changes in its net assets for each of the years in the two-year period then
ended and its financial highlights for each of the years in the three-year
period then ended, in conformity with generally accepted accounting
principles.
[KPMG Peat Marwick signature logo]
New York, New York
February 14, 1997
PREMIER MANAGED
INCOME FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. MIFAR9612
Annual Report
Premier Managed
Income Fund
December 31, 1996
[lion2hres logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS CORE VALUE FUND INVESTOR CLASS SHARES AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS CORE STANDARD
VALUE FUND & POOR'S
(INVESTOR 500 COMPOSITE
PERIOD CLASS STOCK PRICE
SHARES) INDEX*
12/31/86 10,000 10,000
12/31/87 10,027 10,525
12/31/88 11,986 12,268
12/31/89 14,978 16,148
12/31/90 12,965 15,646
12/31/91 15,930 20,402
12/31/92 16,573 21,955
12/31/93 19,309 24,164
12/31/94 19,375 24,480
12/31/95 26,265 33,668
12/31/96 31,896 41,396
*Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS SPECIAL GROWTH FUND INVESTOR SHARES AND THE
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
DREYFUS STANDARD & POOR'S
SPECIAL GROWTH 500 COMPOSITE
PERIOD FUND STOCK
(INVESTOR SHARES) PRICE INDEX*
5/3/82 10,000 10,000
12/31/82 13,490 12,545
12/31/83 18,869 15,375
12/31/84 16,775 16,339
12/31/85 22,613 21,524
12/31/86 24,346 25,540
12/31/87 23,418 26,881
12/31/88 28,451 31,332
12/31/89 33,808 41,243
12/31/90 32,170 39,960
12/31/91 41,571 52,108
12/31/92 52,458 56,073
12/31/93 62,954 61,714
12/31/94 51,485 62,523
12/31/95 67,159 85,996
12/31/96 65,445 105,728
* Source: Lipper Analytical Services, Inc.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER MANAGED INCOME FUND CLASS A SHARES AND
THE LEHMAN BROTHERS AGGREGATE BOND INDEX
EXHIBIT A:
PREMIER LEHMAN
MANAGED BROTHERS
PERIOD INCOME FUND AGGREGATE
(CLASS A SHARES) BOND INDEX*
12/31/86 9,551 10,000
12/31/87 10,120 10,276
12/31/88 11,137 11,086
12/31/89 11,756 12,697
12/31/90 12,273 13,834
12/31/91 14,363 16,048
12/31/92 15,622 17,236
12/31/93 17,893 18,916
12/31/94 16,974 18,365
12/31/95 19,915 21,757
12/31/96 20,595 22,547
*Source: Lehman Brothers