Dreyfus Premier
Core Value Fund
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
15 Financial Highlights
21 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier Core Value Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Core Value
Fund, covering the six-month period from January 1, 2000 through June 30, 2000.
Inside, you' ll find valuable information about how the fund was managed during
the reporting period, including a discussion with the fund's portfolio manager,
Valerie J. Sill.
While stock prices were little changed on average over the past six months, the
period was marked by high levels of volatility and dramatic shifts in investor
sentiment. Between January and mid-March, large-cap stocks generally continued
to advance, led by fast-growing technology stocks that, many investors believed,
would benefit most from the "new economy." Subsequently, however, technology
stocks corrected sharply over concerns about rising interest rates and extremely
high valuations. Other sectors of the large-cap stock market also declined,
erasing the gains achieved earlier in the year.
Also, primarily because of the precipitous drop in technology stock prices,
value-oriented stocks generally outperformed growth stocks during the reporting
period, a reversal of the trend established over the past several years. In
addition, small-capitalization stocks generally outperformed large-cap stocks,
particularly in the value-oriented segment of the market. In our view, these
short-term swings in investor sentiment highlight once again the importance of
broad diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Core Value Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF FUND PERFORMANCE
Valerie J. Sill, Portfolio Manager
How did Dreyfus Premier Core Value Fund perform relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Premier Core Value Fund
produced a total return of -0.90% for its Class A Shares, -1.24% for its Class B
Shares, -1.27% for its Class C shares, -0.85% for its Institutional shares,
-0.77% for its Class R shares and -1.05% for its Class T shares.(1) In
comparison, the fund's benchmark, the Standard & Poor's 500/BARRA Value Index,
produced a return of -4.07% for the same period.(2)
During the first two months of 2000, investors preferred high-flying growth
stocks such as Internet companies over more conservative businesses that posted
solid profits. However, by early March, economic and inflation data heightened
investor concerns about the high prices that they were paying for growth stocks.
As a result, a shift back to the fundamentals of stock analysis took place and,
in turn, a shift to the more reasonably priced value stocks. By late May, the
efforts made by the Federal Reserve Board to slow the economy and fight
inflation appeared successful and growth stocks became popular again.
What is the fund's investment approach?
The fund invests primarily in large-cap companies that are considered
undervalued based on traditional measures such as price-to-earnings ratios. In
choosing stocks, we use a "bottom-up" stock selection approach, focusing on
individual companies rather than a "top-down" approach that forecasts market
trends. We also focus on a company's relative value, financial strength, sales
and earnings momentum and likely catalysts that could ignite the stock price.
What other factors influenced the fund's performance?
One positive factor in the fund's performance was its strong emphasis on the
pharmaceutical sector that was one of the best-performing stock The Fun
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
groups during the period. Historically, pharmaceuticals were considered a growth
category because the companies produced higher growth in earnings than the stock
market as a whole and investors were willing to pay premium prices for that.
However, in the past year, pharmaceutical stocks behaved more like value stocks,
coming down in price for two reasons. First, growth investors appeared to be
fixated on the growth potential of technology stocks which were perceived to be
higher than the growth potential offered by pharmaceutical companies. Second,
the United States Congress began debating the merits of expanding Medicare to
cover prescription drugs. That debate was viewed as a threat to the companies'
profits, because increased Medicare reimbursement to hospitals had already
adversely impacted that industry.
In addition, concerns at individual companies further depressed pharmaceutical
stock prices. For example, Abbott Laboratories, a company that was forced by
federal regulators to recall a number of diagnostic tests on the market, had its
stock price fall sharply as a result of the recall. The stock of American Home
Products was hurt because of litigation over one of its diet products and the
perceived cost of settlement. We viewed these developments as buying
opportunities and the stocks have since appreciated in value.
Another positive factor affecting performance was our ability to spot
" miscellaneous" underpriced stocks in a variety of industries. For instance, in
media and entertainment, Disney (Walt), which owns the ABC television network,
began producing extremely strong profits during the fund's reporting period,
largely due to the success of the "Who Wants To Be A Millionaire" program. In
the brokerage industry, both Morgan Stanley Dean Witter & Co. and Citigroup
benefited from unusually high stock market volatility and trading volumes during
the first half of 2000. In technology, the fund benefited from Netherlands-based
Koninklijke (Royal) Philips Electronics' success in satisfying the booming
global demand for semiconductors, the building blocks for computers and other
electronic devices.
However, the fund' s performance was hampered by its holdings in the banking
industry, which continued to perform poorly due to the rising interest-rate
environment. In addition, economically cyclical companies, such as those in the
chemicals and paper industries, began the year strong but performed poorly in
the second quarter as the U.S. economy began to slow down.
What is the fund's current strategy?
Regardless of whether the growth or value style of investing is in favor at the
moment, our strategy remains consistent. We will continue to look for
undervalued stocks that, in our opinion, have the potential to provide strong
stock price performance regardless of their industry. In addition, we believe
the fund should benefit from the renewed respect among the investment community
for companies that post strong profits. Even with the resurgence in stock prices
toward the end of June, we believe that there is a wide selection of
attractively priced companies available to us.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A AND T SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD & POOR'S 500/BARRA VALUE
INDEX IS A CAPITALIZATION-WEIGHTED INDEX OF ALL THE STOCKS IN THE STANDARD &
POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500 INDEX") THAT HAVE LOW
PRICE-TO-BOOK RATIOS. THE S&P 500 INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF
U.S. STOCK MARKET PERFORMANCE.
The Fund
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
COMMON STOCKS--96.9% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
APPLIANCES--2.9%
<S> <C> <C>
Koninklijke (Royal) Philips Electronics 391,528 18,597,580
BANKING--1.4%
Bank of America 205,186 8,822,998
BASIC INDUSTRIES--6.1%
Dow Chemical 331,200 9,998,100
duPont (E.I.) deNemours & Co. 346,344 15,152,550
Georgia-Pacific 243,700 6,397,125
PPG Industries 74,400 3,296,850
Union Carbide 89,900 4,450,050
39,294,675
BEVERAGES & TOBACCO--.7%
Philip Morris Cos. 162,200 4,308,438
BROADCASTING & PUBLISHING--1.1%
McGraw-Hill Cos. 135,600 7,322,400
CAPITAL GOODS--9.0%
Boeing 378,500 15,826,031
Caterpillar 198,000 6,707,250
Deere & Co. 119,300 4,414,100
Honeywell International 138,900 4,679,194
Ingersoll-Rand 125,700 5,059,425
Pitney Bowes 168,000 6,720,000
United Technologies 250,200 14,730,525
58,136,525
CONSUMER DURABLES--1.5%
Ford Motor 210,100 9,034,300
Visteon 27,509 333,547
9,367,847
CONSUMER NON-DURABLES--1.4%
Kimberly-Clark 157,200 9,019,350
CONSUMER SERVICES--7.3%
Disney (Walt) 269,100 10,444,444
Federated Department Stores 193,700 (a) 6,537,375
First Data 143,200 7,106,300
Knight-Ridder 143,000 7,605,813
Seagram 171,400 9,941,200
TJX Cos. 309,400 5,801,250
47,436,382
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
ENERGY--13.2%
Conoco, Cl. B 581,420 14,281,129
Exxon Mobil 316,816 24,870,056
Halliburton 307,300 14,500,719
Phillips Petroleum 58,400 2,960,150
Texaco 348,850 18,576,263
Williams Cos. 234,400 9,771,550
84,959,867
FINANCIAL SERVICES--22.0%
AXA Financial 177,000 6,018,000
Aetna 56,300 3,613,756
Allstate 2,900 64,525
American General 85,300 5,203,300
American International Group 146,662 17,232,785
Chase Manhattan 378,150 17,418,534
Citigroup 316,600 19,075,150
Fannie Mae 210,000 10,959,375
First Union 148,100 3,674,731
FleetBoston Financial 568,447 19,327,351
Golden State Bancorp 326,500 (a) 5,877,000
Goldman Sachs Group 50,200 4,762,725
Marsh & McLennan Cos. 79,300 8,281,894
Morgan Stanley Dean Witter & Co. 162,100 13,494,825
Wells Fargo 175,600 6,804,500
141,808,451
HEALTH CARE--7.6%
Abbott Laboratories 322,300 14,362,494
American Home Products 187,900 11,039,125
HCA-The Healthcare Company 109,500 3,326,063
Merck & Co. 94,800 7,264,050
Pharmacia 126,060 6,515,726
Wellpoint Health Networks 93,400 (a) 6,765,663
49,273,121
INSURANCE--1.0%
CIGNA 70,200 6,563,700
TECHNOLOGY--8.4%
Advanced Micro Devices 56,300 (a) 4,349,175
Computer Associates International 91,500 4,683,656
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Electronic Data Systems 103,800 4,281,750
Hewlett-Packard 91,700 11,451,038
Informix 375,800 (a) 2,795,013
International Business Machines 169,900 18,614,669
Microsoft 99,400 (a) 7,952,000
54,127,301
TELECOMMUNICATIONS--3.0%
Cable & Wireless, A.D.S. 135,600 6,788,475
SK Telecom, A.D.R. 270 9,804
Sprint (FON Group) 240,800 12,280,800
19,079,079
TRANSPORTATION--2.6%
Canadian Pacific 262,800 6,882,075
Southwest Airlines 205,700 3,895,444
Union Pacific 162,700 6,050,406
16,827,925
UTILITIES--7.7%
British Telecommunications, A.D.R. 47,800 6,321,550
Duke Energy 202,000 11,387,750
FPL Group 150,300 7,439,850
GTE 239,800 14,927,550
SBC Communications 155,900 6,742,675
Telephone & Data Systems 30,500 3,057,625
49,877,000
TOTAL COMMON STOCKS
(cost $579,247,541) 624,822,639
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PREFERRED STOCKS--2.5%
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CONSUMER SERVICES
News Corp, A.D.R.
(cost $8,159,842) 338,300 16,069,250
Principal
SHORT-TERM INVESTMENTS--3.2% Amount ($) Value ($)
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COMMERCIAL PAPER;
General Electric Capital
6.9%, 7/3/2000
(cost $20,441,000) 20,441,000 20,441,000
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TOTAL INVESTMENTS (cost $607,848,383) 102.6% 661,332,889
LIABILITIES, LESS CASH AND RECEIVABLES (2.6%) (16,711,432)
NET ASSETS 100.0% 644,621,457
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 607,848,383 661,332,889
Receivable for investment securities sold 4,040,814
Dividends and interest receivable 645,034
Receivable for shares of Beneficial Interest subscribed 281,634
666,300,371
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 635,908
Cash overdraft due to Custodian 1,649,254
Payable for investment securities purchased 19,322,308
Payable for shares of Beneficial Interest redeemed 70,444
Loan commitment fees payable--Note 4 1,000
21,678,914
--------------------------------------------------------------------------------
NET ASSETS ($) 644,621,457
--------------------------------------------------------------------------------
COMPOSITON OF NET ASSETS ($):
Paid-in capital 551,258,511
Accumulated undistributed investment income-net 296,960
Accumulated net realized gain (loss) on investments
and foreign currency transactions 39,581,670
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 53,484,316
--------------------------------------------------------------------------------
NET ASSETS ($) 644,621,457
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R Class T Institutional
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets ($) 572,480,146 10,401,809 1,525,891 940,128 120,402 59,153,081
Shares Outstanding 19,253,649 352,495 51,702 31,633 4,049 1,990,974
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE ($) 29.73 29.51 29.51 29.72 29.74 29.71
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $27,168 foreign taxes withheld at source) 5,162,403
Interest 343,826
TOTAL INCOME 5,506,229
EXPENSES:
Management fee--Note 2(a) 2,909,331
Distribution and service fees--Note 2(b) 810,866
Loan commitment fees--Note 4 1,771
TOTAL EXPENSES 3,721,968
INVESTMENT INCOME--NET 1,784,261
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments and
foreign currency transactions 41,391,978
Net realized gain (loss) on forward currency
exchange contracts 47
NET REALIZED GAIN (LOSS) 41,392,025
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (49,375,515)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (7,983,490)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (6,199,229)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,784,261 2,681,210
Net realized gain (loss) on investments 41,392,025 73,569,659
Net unrealized appreciation (depreciation)
on investments (49,375,515) 25,962,579
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (6,199,229) 102,213,448
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,584,421) (2,263,666)
Class R shares (3,949) (5,230)
Class T shares (130) (7)
Institutional shares (195,014) (342,052)
Net realized gain on investments:
Class A shares (14,384,392) (57,683,237)
Class B shares (174,778) (578,477)
Class C shares (34,443) (101,695)
Class R shares (24,594) (83,515)
Class T shares (1,341) (999)
Institutional shares (1,511,864) (6,349,211)
TOTAL DIVIDENDS (17,914,926) (67,408,089)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 91,925,159 125,569,592
Class B shares 5,238,063 5,359,943
Class C shares 859,244 1,594,686
Class R shares 199,531 318,525
Class T shares 124,277 18,242
Institutional shares 2,705,493 7,236,827
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($) (CONTINUED):
Dividends reinvested:
Class A shares 14,020,206 51,250,587
Class B shares 144,832 461,361
Class C shares 19,266 60,348
Class R shares 28,539 88,719
Class T shares 1,482 1,006
Institutional shares 1,675,916 6,550,537
Cost of shares redeemed:
Class A shares (102,282,653) (173,863,271)
Class B shares (1,392,209) (964,803)
Class C shares (502,749) (603,822)
Class R shares (145,283) (411,172)
Class T shares (23,369) (462)
Institutional shares (7,988,178) (26,333,926)
INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST TRANSACTIONS 4,607,567 (3,667,083)
TOTAL INCREASE (DECREASE) IN NET ASSETS (19,506,588) 31,138,276
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 664,128,045 632,989,769
END OF PERIOD 644,621,457 664,128,045
Undistributed investment income--net 296,960 296,213
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO DECEMBER 31,
1999 FOR CLASS T SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999(a)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(B)
Shares sold 3,028,088 3,919,514
Shares issued for dividends reinvested 460,528 1,710,386
Shares redeemed (3,373,809) (5,490,601)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 114,807 139,299
--------------------------------------------------------------------------------
CLASS B(B)
Shares sold 173,731 167,221
Shares issued for dividends reinvested 4,785 15,532
Shares redeemed (47,719) (30,690)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 130,797 152,063
--------------------------------------------------------------------------------
CLASS C
Shares sold 28,803 48,625
Shares issued for dividends reinvested 637 2,032
Shares redeemed (16,647) (18,428)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 12,793 32,229
--------------------------------------------------------------------------------
CLASS R
Shares sold 6,761 10,421
Shares issued for dividends reinvested 938 2,960
Shares redeemed (4,772) (13,453)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 2,927 (72)
--------------------------------------------------------------------------------
CLASS T
Shares sold 4,173 576
Shares issued for dividends reinvested 49 34
Shares redeemed (767) (16)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 3,455 594
--------------------------------------------------------------------------------
INSTITUTIONAL SHARES
Shares sold 88,325 223,113
Shares issued for dividends reinvested 55,098 218,558
Shares redeemed (265,646) (861,568)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (122,223) (419,897)
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO DECEMBER 31,
1999 FOR CLASS T SHARES.
(B) DURING THE PERIOD ENDED JUNE 30, 2000, 816 CLASS B SHARES REPRESENTING
$24,750 WERE AUTOMATICALLY CONVERTED TO 810 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. Certain information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
Six Months Ended
June 30, 2000 Year Ended December 31,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 30.83 29.26 30.11 30.40 30.13 24.56
Investment Operations:
Investment income-net .08(a) .13(a) .19 .22 .31 .41
Net realized and unrealized
gain (loss) on investments (.34) 4.78 1.95 6.98 6.03 8.24
Total from
Investment Operations (.26) 4.91 2.14 7.20 6.34 8.65
Distributions:
Dividends from
investment income-net (.08) (.13) (.17) (.23) (.30) (.45)
Dividends in excess of
investment income--net -- -- -- (.01) -- --
Dividends from net realized
gain on investments (.76) (3.21) (2.82) (7.25) (5.77) (2.63)
Total Distributions (.84) (3.34) (2.99) (7.49) (6.07) (3.08)
Net asset value,
end of period 29.73 30.83 29.26 30.11 30.40 30.13
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (.90)(b,c) 17.29(b) 7.06(b) 25.21 21.44 35.56
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .57(c) 1.15 1.15 1.14 1.13 1.13
Ratio of net investment income
to average net assets .27(c) .41 .61 .64 .96 1.43
Decrease reflected in above
expense ratios due to
undertakings by The
Dreyfus Corporation -- -- -- .01 .02 .02
Portfolio Turnover Rate 52.94(c) 91.22 84.32 92.99 88.46 54.42
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 572,480 590,129 555,863 585,624 486,816 401,674
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) EXCLUSIVE OF SALES CHARGE.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
June 30, 2000 Year Ended December 31,
------------------------
CLASS B SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C>
Net asset value, beginning of period 30.64 29.19 29.04
Investment Operations:
Investment (loss)-net (.03)(b) (.10)(b) (.02)
Net realized and unrealized gain (loss)
on investments (.34) 4.76 3.00
Total from Investment Operations (.37) 4.66 2.98
Distributions:
Dividends from investment income-net - - (.01)
Dividends from net realized gain on investments (.76) (3.21) (2.82)
Total Distributions (.76) (3.21) (2.83)
Net asset value, end of period 29.51 30.64 29.19
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (1.24)(d) 16.37 10.24(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%)
Ratio of expenses to average net assets .95(d) 1.90 1.82(d)
Ratio of net investment (loss)
to average net assets (.10)(d) (.33) (.14)(d)
Portfolio Turnover Rate 52.94(d) 91.22 84.32
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 10,402 6,792 2,033
(A) FROM JANUARY 16, 1998 (COMMENCEMENT OF INITIAL OFFERING) TO DECEMBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
June 30, 2000 Year Ended December 31,
------------------------
CLASS C SHARES (Unaudited) 1999 1998(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 30.64 29.19 29.04
Investment Operations:
Investment (loss) (.03)(b) (.11)(b) (.02)
Net realized and unrealized gain (loss)
on investments (.34) 4.77 3.00
Total from Investment Operations (.37) 4.66 2.98
Distributions:
Dividends from investment income-net - - (.01)
Dividends from net realized gain on investments (.76) (3.21) (2.82)
Total Distributions (.76) (3.21) (2.83)
Net asset value, end of period 29.51 30.64 29.19
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (1.27)(d) 16.41 10.24(d)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%)
Ratio of expenses to average net assets .95(d) 1.90 1.82(d)
Ratio of net investment (loss)
to average net assets (.10)(d) (.35) (.13)(d)
Portfolio Turnover Rate 52.94(d) 91.22 84.32
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 1,526 1,192 195
(A) FROM JANUARY 16, 1998 (COMMENCEMENT OF INITIAL OFFERING) TO DECEMBER 31, 1998.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
June 30, 2000 Year Ended December 31,
----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 30.82 29.25 30.11 30.46 30.18 24.56
Investment Operations:
Investment income-net .12(a) .20(a) .26 .33(a) .36 .62
Net realized and unrealized
gain (loss) on investments (.34) 4.79 1.95 6.90 6.08 8.16
Total from Investment Operations (.22) 4.99 2.21 7.23 6.44 8.78
Distributions:
Dividends from
investment income-net (.12) (.21) (.25) (.32) (.39) (.53)
Dividends in excess of
investment income--net -- -- -- (.01) -- --
Dividends from net realized
gain on investments (.76) (3.21) (2.82) (7.25) (5.77) (2.63)
Total Distributions (.88) (3.42) (3.07) (7.58) (6.16) (3.16)
Net asset value, end of period 29.72 30.82 29.25 30.11 30.46 30.18
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (.77)(b) 17.59 7.01 25.54 21.74 36.05
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .45(b) .90 .90 .89 .88 .88
Ratio of net investment income
to average net assets .39(b) .65 .82 .88 1.23 1.93
Decrease reflected in above
expense ratios due to
undertakings by The
Dreyfus Corporation -- -- -- .01 .02 .02
Portfolio Turnover Rate 52.94(b) 91.22 84.32 92.99 88.46 54.42
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 940 885 842 867 11,618 185
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
Six Months Ended Year Ended
June 30, 2000 December 31,
CLASS T SHARES (Unaudited) 1999(a)
--------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 30.84 32.45
Investment Operations:
Investment income-net .03(b) .01(b)
Net realized and unrealized gain (loss) on investments (.32) 1.23
Total from Investment Operations (.29) 1.24
Distributions:
Dividends from investment income-net (.05) (.02)
Dividends from net realized gain on investments (.76) (2.83)
Total Distributions (.81) (2.85)
Net asset value, end of period 29.74 30.84
--------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (.85)(d) 4.10(d)
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%)
Ratio of expenses to average net assets .70(d) .53(d)
Ratio of net investment income to average net assets .10(d) .05(d)
Portfolio Turnover Rate 52.94(d) 91.22
--------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 120 18
(A) FROM AUGUST 16, 1999 (COMMENCEMENT OF INITIAL OFFERING) TO DECEMBER 31,
1999.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(C) EXCLUSIVE OF SALES CHARGE.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
June 30, 2000 Year Ended December 31,
----------------------------------------------------------------
INSTITUTIONAL SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 30.81 29.24 30.10 30.38 30.12 24.56
Investment Operations:
Investment income-net .10(a) .16(a) .22 .26 .36 .47
Net realized and unrealized
gain on investments (.34) 4.78 1.95 6.98 6.01 8.20
Total from Investment Operations (.24) 4.94 2.17 7.24 6.37 8.67
Distributions:
Dividends from
investment income-net (.10) (.16) (.21) (.26) (.34) (.48)
Dividends in excess of
investment income--net -- -- -- (.01) -- --
Dividends from net realized
gain on investments (.76) (3.21) (2.82) (7.25) (5.77) (2.63)
Total Distributions (.86) (3.37) (3.03) (7.52) (6.11) (3.11)
Net asset value, end of period 29.71 30.81 29.24 30.10 30.38 30.12
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (1.05)(b) 17.41 7.17 25.34 21.57 35.60
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .52(b) 1.05 1.05 1.04 1.03 1.03
Ratio of net investment income
to average net assets .33(b) .50 .71 .74 1.07 1.53
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- -- -- .01 .02 .02
Portfolio Turnover Rate 52.94(b) 91.22 84.32 92.99 88.46 54.42
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 59,153 65,111 74,058 80,427 71,894 75,607
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Core Value fund (the "fund") is a separate diversified series of
The Dreyfus/Laurel Funds Trust (the "Trust" ) which is registered under the
Investment Company Act of 1940, as amended (the "Act" ), as an open-end
management investment company and operates as a series company currently
offering three series including the fund.The fund's investment objective is to
seek long-term growth of capital and current income. The Dreyfus Corporation
(the "Manager") serves as the fund's investment manager. The Manager is a direct
subsidiary of Mellon Bank, N.A. (" Mellon Bank" ), which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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, Class R, Class T and
Institutional shares. Class A, Class B, Class C and Class T shares are sold
primarily to retail investors through financial intermediaries and bear a
distribution fee and/or service fee. Class A and Class T shares are subject to a
front-end sales charge, while Class B and Class C shares are subject to a
contingent deferred sales charge ("CDSC"). Class B shares automatically convert
to Class A shares after six years. 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
or service fees. Class R shares are offered without a front-end sales charge or
CDSC. 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. Each class
of shares has identical rights and privileges, except with respect to the
distribution and service fees and voting rights on matters affecting a single
class.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
Investment income, net of expenses (other than class specific expenses) and
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 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, cur
rency gains or losses realized on securities transactions and 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 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 and to settle foreign currency
transactions. 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 June 30, 2000, there were no open forward currency exchange
contracts.
(e) Distributions to shareholders: Dividends are recorded on the ex-dividend
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 of 1986, as
amended (the The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
" 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 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, commitment fees, Rule 12b-1 distribution fees and expenses,
service fees, 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 fees). Each Trustee receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly scheduled
board meeting and $500 for Board meetings and separate committee meetings
attended that are conducted by telephone and is
reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
receives an additional 25% of such compensation (with the exception of
reimbursable amounts). These fees are charged and allocated to each series based
on net assets. In the event that there is a joint committee meeting of the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee
will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield
Strategies Fund. Amounts required to be paid by the Trust directly to the
non-interested trustees, that would be applied to offset a portion of the
management fee payable to the Manager, are in fact paid directly by the Manager
to the non-interested trustees.
DSC retained $5,591 during the period ended June 30, 2000, from commissions
earned on sales of the fund's shares.
(b) Distribution and Service Plan: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares and Institutional
shares may pay annually up to .25% and .15%, respectively, of the value of their
average daily net assets to compensate the distributor for shareholder servicing
activities and expenses primarily intended to result in the sale of Class A
shares and Institutional shares. Under the Plan, Class B, Class C and Class T
shares pay the distributor for distributing shares at an aggregate annual rate
of .75% of the value of the average daily net assets of Class B and Class C
shares and .25% of the value of average daily net assets of Class T shares. The
distributor may pay one or more agents in respect of advertising, marketing and
other distribution services for Class T shares and determines the amounts, if
any, to be paid to agents and the basis on which such payments are made. Class
B, Class C and Class T shares are also subject to a Service Plan adopted
pursuant to Rule 12b-1, under which Class B, Class C and Class T shares pay the
distributor for providing certain services to the holders of Class B, Class C
and Class T shares a fee at the annual rate of .25% of the value of the average
daily net assets of Class B, Class C and Class T shares. During the period ended
June 30, 2000, Class A, Class B, Class C, Class T and Institutional
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
shares were charged $718,395 $29,375 $5,246, $73 and $46,163, respectively,
pursuant to the Plan, of which $702,294, $21,086, $3,837, $64 and $44,472,
respectively, were paid to DSC. During the period ended June 30, 2000, Class B,
Class C and Class T shares were charged $9,792, $1,749 and $73, respectively,
pursuant to the Service Plan, of which $7,029, $1,279 and $57, respectively,
were paid to DSC.
Under its terms, the Plan and Service 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 or in any agreement
related to the Plan or Service Plan.
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 June 30, 2000 amounted to $337,852,609 and $342,218,592, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$53,484,506, consisting of $96,183,130 gross unrealized appreciation and
$42,698,624 gross unrealized depreciation.
At June 30, 2000, 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 $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended June
30, 2000, the fund did not borrow under the Facility.
The Fund
NOTES
For More Information
Dreyfus Premier 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 312SA006
================================================================================
Dreyfus Premier
Limited Term
High Income Fund
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
18 Financial Highlights
22 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Limited Term High Income Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Limited
Term High Income Fund, covering the six-month period from January 1, 2000
through June 30, 2000. Inside, you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with the
fund's portfolio manager, Roger King.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
bond market over the past six months. This was primarily a result of efforts by
the Federal Reserve Board (the "Fed" ) to forestall potential inflationary
pressures. The Fed raised short-term interest rates three times during the
reporting period, for a total increase of 1.00 percentage points. These rate
hikes contributed to a total interest-rate increase of 1.75 percentage points
since late June 1999, before the current reporting period began.
Higher interest rates led to an erosion of most bond prices, especially among
higher yielding securities. U.S. Treasury securities represented a notable
exception. Prices of these direct obligations of the federal government rose
primarily because of reduced supply amid robust demand from domestic and foreign
investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Limited Term High Income Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF FUND PERFORMANCE
Roger King, Portfolio Manager
How did Dreyfus Premier Limited Term High Income Fund perform relative to its
benchmark?
For the six-month period ended June 30, 2000 the fund achieved a total return of
0.43% for Class A shares, 0.18% for Class B shares, 0.16% for Class C shares and
0.65% for Class R shares.(1) This compares to a -1.00% total return for the
fund' s benchmark, the Merrill Lynch High Yield Master II Index, for the same
period.(2)
Because the fund's maturity and duration (a measure of sensitivity to changing
interest rates) are limited by its investment approach, as stated in the
prospectus, we also gauge the fund's performance against a shorter term measure:
the Customized Limited Term High Yield Index, which achieved a 0.27% total
return for the period.(3) This blended index is composed of four shorter term
subindices of the Merrill Lynch High Yield Master II Index.
We attribute the fund's outperformance of the indices largely to our investment
strategy. We have been restructuring the portfolio to improve credit quality.
Because investors generally continued to avoid credit risk during the reporting
period, bonds rated near investment grade (such as those in which we have
concentrated new investment) significantly outperformed lower rated issues.
What is the fund's investment approach?
The fund seeks to maximize current income by investing in high yield
fixed-income securities. The average effective maturity and average effective
duration of the fund are limited to four years or less and three and one-half
years or less, respectively.
We normally invest most of the fund's assets in fixed-income securities of below
investment grade credit quality. Issuers of below investment grade securities
may be in early stages of development or may have highly leveraged balance
sheets. To compensate the buyer for
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
taking greater risk, these companies must offer higher yields than those offered
by more highly rated firms.
Our approach to selecting individual issues is based on careful credit analysis.
We thoroughly analyze the business, management and financial strength of each of
the companies whose bonds we buy, and then project each issuer's ability to
repay its debt.
What other factors influenced the fund's performance?
High yield, fixed-income investors began the year 2000 hoping to recover from an
extremely difficult 1999. In anticipation of potential Y2K market disruptions,
investor demand for high yield bonds almost completely halted as year-end
approached. Many investors withdrew from the market and the large supply of high
yield bonds was met by weak demand: bond prices and the value of the portfolio
inevitably fell.
Although the new year arrived uneventfully, the much anticipated post-Y2K rally
in the high yield bond market failed to materialize. Other factors continued to
push bond prices down and dampened fund performance. The Federal Reserve Board's
ongoing policy of interest-rate tightening had a negative effect on investor
psychology across the bond market as a whole. In addition, default rates have
risen, as some bonds issued under relatively lax underwriting standards in 1997
and 1998 have not met interest and/or principal payments. Finally, for much of
the reporting period investors seemed to show a marked shift in sentiment.
Previously, investors seeking high returns found high yield bonds an attractive
investment vehicle. However, in current markets, many return-oriented investors
appear to have shifted their preference, favoring stocks over bonds. And those
investors who have maintained an interest in bonds have shown a strong
preference for credit safety over risk, generally choosing to avoid the high
yield marketplace.
While the reporting period overall was difficult for the market in general and
the fund in particular, high yield bond prices did rebound in June. The rebound,
however, was concentrated in higher rated bonds (where the fund has concentrated
recent investment), as money managers remained cautious that the recovery would
prove temporary.
What is the fund's current strategy?
We have continued to reposition the fund to improve credit quality and shorten
average maturity, while also protecting it from volatility. In doing so, we have
de-emphasized lower rated bonds and have moved away from bonds with complicated
payment or maturity structures. Rather, our strategy for new investments is to
purchase domestic bonds rated near investment grade quality that pay cash
interest and have a final maturity within five years.
The high yield market, in its current distressed state, is trading at depressed
levels not seen in the past 10 years. We believe that the high yield market, at
these levels, may well offer significant value. However, there is no telling if
and when a positive trigger event may occur, causing the high yield market to
once again gain favor with investors.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID
AND DOES NOT TAKE INTO CONSIDERATION 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. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT RETURN FLUCTUATE SUCH
THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
(2) SOURCE: BLOOMBERG L.P. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MERRILL LYNCH HIGH YIELD MASTER II
INDEX IS AN UNMANAGED PERFORMANCE BENCHMARK COMPOSED OF U.S. DOMESTIC AND YANKEE
BONDS RATED BELOW INVESTMENT GRADE WITH AT LEAST $100 MILLION PAR AMOUNTS
OUTSTANDING AND GREATER THAN OR EQUAL TO ONE YEAR TO MATURITY.
(3) SOURCE: BLOOMBERG L.P. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE CUSTOMIZED LIMITED TERM HIGH YIELD
INDEX IS COMPOSED OF FOUR SUBINDICES OF THE MERRILL LYNCH HIGH YIELD MASTER II
INDEX. THESE SUBINDICES, BLENDED AND MARKET WEIGHTED, ARE (I) BB-RATED, 1-3
YEARS, (II) B-RATED, 1-3 YEARS, (III) BB-RATED, 3-5 YEARS, AND (IV) B-RATED, 3-5
YEARS. UNLIKE THE CUSTOMIZED LIMITED TERM HIGH YIELD INDEX, WHICH IS COMPOSED OF
BONDS RATED NO LOWER THAN "B," THE PORTFOLIO CAN INVEST IN BONDS WITH LOWER
CREDIT RATINGS THAN "B" AND AS LOW AS "D."
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
June 30, 2000 (Unaudited)
Principal
BONDS AND NOTES--96.8% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIRCRAFT & AEROSPACE--8.1%
AM General, Ser. B,
Sr. Notes, 12.875%, 2002 11,858,000 10,464,685
Aircraft Lease Portfolio Securitisation 96-1,
Pass-Through Trust, Ctfs.,
Cl. D, 12.75%, 2006 812,929 772,283
Airplanes Pass-Through Trust,
Pass-Through Ctfs.,
Ser. 1, Cl. D, 10.875%, 2019 21,729,400 17,652,747
American Pacific,
Sr. Notes, 9.25%, 2005 11,565,000 11,507,175
Midway Airlines,
Pass-Through Ctfs.,
Ser. 1998-1, Cl. D, 8.86%, 2003 4,383,324 (a) 4,280,952
US Airways,
Pass-Through Ctfs.:
Ser. 1993-A, Cl. A2, 9.625%, 2003 3,855,000 3,704,933
Ser. 1993-A, Cl. A3, 10.375%, 2013 11,000,000 10,023,838
58,406,613
AUTOMOTIVE--2.3%
Aetna Industries,
Sr. Notes, 11.875%, 2006 12,000,000 9,660,000
Hayes Lemmerz International,
Sr. Sub. Notes, 11%, 2006 7,000,000 6,912,500
16,572,500
BROADCASTING--3.3%
Capstar Broadcasting Partners,
Sr. Discount Notes, 0/12.75%, 2009 1,750,000 (b) 1,618,750
Lin Holdings,
Sr. Discount Notes, 0/10%, 2008 9,000,000 (b) 5,962,500
Paxson Communications,
Sr. Sub. Notes, 11.625%, 2002 14,000,000 14,385,000
Univision Network Holding,
Sub. Notes, 7%, 2002 2,550,575 1,875,000
23,841,250
BUSINESS SERVICES--1.3%
Pierce Leahy,
Sr. Sub. Notes, 11.125%, 2006 9,000,000 9,337,500
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION--11.0%
Adelphia Communications:
Ser. B, Sr. Notes, 9.5%, 2004 5,000,000 4,850,000
Sr. Discount Notes, 0%, 2003 5,500,000 4,076,875
Sr. Notes, 9.25%, 2002 4,000,000 3,965,000
Sr. Notes, 9.75%, 2002 1,700,000 1,708,500
Diamond Cable Communications,
Sr. Discount Notes, 0/11.75%, 2005 9,950,000 (b) 9,489,813
Galaxy Telecom,
Sr. Sub. Notes, 12.375%, 2005 9,400,000 8,178,000
NTL:
Ser. A, Sr. Discount Notes, 0/12.75%, 2005 5,500,000 (b) 5,623,750
Sr. Discount Notes, 0/11.2%, 2007 7,000,000 (b) 6,562,500
Pegasus Communications, Ser. A,
Sr. Sub. Notes, 12.5%, 2007 14,500,000 15,515,000
Pegasus Media & Communications, Ser. B,
Sr. Sub. Notes, 12.5%, 2005 13,540,000 14,487,800
Telewest Communications,
Sr. Discount Notes, 0/11%, 2007 5,000,000 (b) 4,762,500
79,219,738
CASINOS & GAMING--.2%
Circus Circus Enterprises,
Sr. Sub. Notes, 6.75%, 2003 1,500,000 1,383,750
CHEMICALS--2.4%
Arco Chemical,
Deb., 9.9%, 2000 2,850,000 2,848,538
ISP Holdings:
Ser. B, Sr. Notes, 9.75%, 2002 5,770,000 5,640,175
Ser. B, Sr. Notes, 9%, 2003 9,750,000 9,128,438
17,617,151
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--1.4%
GS Mortgage Securities II,
Ser. 1999-FL2A, Cl. G, 8.62%, 2013 4,000,000 (a,c) 3,846,720
Nomura Depositor Trust:
Ser. 1998-STI, Cl. B2, 10.9%, 2003 5,000,000 (a,c) 4,630,469
Ser. 1998-STIA, Cl. B2A, 10.9%, 2003 2,000,000 (a,c) 1,852,188
10,329,377
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION--1.8%
Aaf-Mcquay,
Sr. Notes, 8.875%, 2003 9,000,000 7,785,000
ICF Kaiser International,
Sr. Sub. Notes, 13%, 2003 11,050,000 (d) 5,331,625
13,116,625
CONSUMER--7.7%
BPC Holding, Ser. B,
Sr. Secured Notes, 13.25%, 2006 5,682,165 (c) 4,519,533
Coinmach, Ser. D,
Sr. Notes, 11.75%, 2005 19,915,000 19,217,975
Graham Packaging/GPC Capital, Ser. B,
Floating Interest Rate Sub. Term Securities,
9.845%, 2008 1,500,000 (c) 1,267,500
Hosiery Corp. of America,
Sr. Sub. Notes, 13.75%, 2002 13,000,000 11,635,000
Macsaver Financial Services,
Notes (Gtd. By Heilig-Meyers):
7.4%, 2002 5,325,000 3,754,125
7.875%, 2003 2,200,000 1,397,000
Sharp Do Brazil,
Medium-Term Notes, 9.625%, 2000 3,500,000 (d,e) 288,750
Sweetheart Cup,
Sr. Sub. Notes, 9.625%, 2000 13,525,000 13,660,250
55,740,133
ENERGY--4.3%
Clark USA, Ser. B,
Sr. Notes, 10.875%, 2005 5,000,000 2,775,000
Louis Dreyfus Natural Gas,
Sr. Sub. Notes, 9.25%, 2004 9,000,000 9,096,552
R & B Falcon, Ser. B,
Sr. Notes, 6.5%, 2003 12,200,000 11,346,000
Statia Terminals, Ser. B,
First Mortgage, 11.75%, 2003 8,000,000 8,040,000
31,257,552
ENTERTAINMENT--2.7%
American Skiing, Ser. B,
Sr. Sub. Notes, 12%, 2006 22,915,000 19,363,175
FINANCIAL--2.2%
First Palm Beach Bancorp,
Deb., 10.35%, 2002 4,375,000 4,194,531
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL (CONTINUED)
Imperial Credit Capital Trust I, Ser. A,
Remarketed Par Securities, 10.25%, 2002 500,000 383,786
Loomis Fargo & Co.,
Sr. Notes, 10%, 2004 5,375,000 5,186,875
Reliance Group Holdings:
Sr. Notes, 9%, 2000 6,500,000 2,795,000
Sr. Sub. Deb., 9.75%, 2003 4,700,000 1,316,000
Republic National Bank of New York,
Deb., 9.65%, 2003 2,000,000 (a) 1,800,024
15,676,216
FOOD & BEVERAGES--5.5%
Chiquita Brands International,
Conv. Sub. Notes, 7%, 2001 9,150,000 7,686,000
Envirodyne Industries,
Sr. Notes, 10.25%, 2001 14,000,000 7,770,000
Pilgrims Pride,
Sr. Sub. Notes, 10.875%, 2003 2,000,000 2,022,500
Sun World International, Ser. B,
First Mortgage, 11.25%, 2004 23,500,000 22,471,875
39,950,375
FOREST PRODUCTS--7.2%
Maxxam Group Holdings,
Sr. Secured Notes, 12%, 2003 45,115,000 41,844,163
Stone Container Finance,
Sr. Notes, 11.5%, 2006 10,000,000 (a) 10,400,000
52,244,163
HEALTH CARE--3.8%
Eye Care Centers of America,
Floating Interest Rate Sub. Term Securities,
10.593%, 2008 3,000,000 (c) 1,725,000
Healthsouth,
Conv. Sub. Deb., 3.25%, 2003 12,500,000 9,875,000
Tenet Healthcare:
Conv. Sub. Deb., 6%, 2005 10,000,000 8,300,000
Sr. Notes, 7.875%, 2003 7,500,000 7,350,000
27,250,000
INDUSTRIAL--4.4%
Anacomp, Ser. D,
Sr. Sub. Notes, 10.875%, 2004 5,000,000 3,218,750
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL (CONTINUED)
Applied Extrusion Technology, Ser. B,
Sr. Notes, 11.5%, 2002 12,880,000 12,976,600
Atlantis Group,
Sr. Notes, 11%, 2003 1,325,000 1,329,969
Hawk, Ser. B,
Sr. Notes, 10.25%, 2003 4,532,000 4,373,380
J.B. Poindexter & Co.,
Sr. Notes, 12.5%, 2004 9,625,000 9,191,875
Vicap, S.A. de C.V.,
Gtd. Sr. Notes, 10.25%, 2002 500,000 477,500
31,568,074
METALS--1.4%
Northwestern Steel & Wire,
Sr. Notes, 9.5%, 2001 5,000,000 2,275,000
Renco Metals,
Sr. Notes, 11.5%, 2003 18,870,000 7,642,350
9,917,350
PUBLISHING--.7%
Day International Group, Ser. B,
Sr. Sub. Notes, 11.125%, 2005 5,200,000 5,096,000
REAL ESTATE--2.9%
Meditrust:
Conv. Notes, 7.5%, 2001 1,000,000 880,000
Medium-Term Notes, 7.77%, 2002 7,250,000 6,104,841
Rockefeller Center Properties,
Conv. Deb., 0%, 2000 7,255,000 6,130,475
Tanger Properties,
Gtd. Notes, 8.75%, 2001 8,000,000 7,892,968
21,008,284
RETAIL--2.2%
Cafeteria Operators
(Gtd. By Furrs/Bishops Specialty Group),
Sr. Secured Notes, 12%, 2001 7,481,650 7,406,833
Core-Mark International,
Sr. Notes, 11.375%, 2003 3,180,000 2,973,300
Petro Stopping Centers/Financial,
Sr. Notes, 10.5%, 2007 6,300,000 5,638,500
16,018,633
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
SHIPPING--1.3%
Eletson Holdings,
First Pfd. Ship Mortgage, 9.25%, 2003 2,750,000 2,571,250
Gearbulk Holdings,
Sr. Notes, 11.25%, 2004 2,000,000 2,020,000
International Shipholding,
Sr. Notes, 9%, 2003 1,000,000 995,000
Stena AB,
Sr. Notes, 10.5%, 2005 3,500,000 3,447,500
9,033,750
SUPERMARKETS--1.1%
Shoppers Food Warehouse,
Sr. Notes, 9.75%, 2004 7,400,000 7,764,524
TELECOMMUNICATION/CARRIERS--7.0%
Hermes Europe Railtel,
Sr. Notes, 11.5%, 2007 14,750,000 12,685,000
Intermedia Communications,
Sr. Discount Notes, 0/12.5%, 2006 14,500,000 (b) 13,231,250
MJD Communications, Ser. B,
Floating Rate Notes, 10.8%, 2008 9,000,000 (c) 8,486,820
Qwest Communications International, Ser. B,
Sr. Notes, 10.875%, 2007 15,000,000 16,320,885
50,723,955
TEXTILES--.5%
Sassco Fashions,
Sr. Notes, 12.75%, 2004 5,700,000 3,676,500
Texfi Industries,
Sr. Sub. Deb., 8.75%, 1999 5,100,000 (d) 102,000
3,778,500
TRANSPORTATION--2.0%
MTL, Ser. B,
Floating Interest Rate Sub. Term Securities,
11.62%, 2006 5,000,000 (c) 3,625,000
Union Pacific,
Sub. Deb, 5.5%, 2033 4,348,000 3,745,534
ValuJet,
Sr. Notes, 10.25%, 2001 7,675,000 6,945,875
14,316,409
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES--.7%
Hidroelectrica Piedra del Aguila:
Notes, 8%, 2009 3,500,000 (a) 2,502,500
Notes, 8.25%, 2009 3,500,000 (a) 2,196,250
4,698,750
WIRELESS COMMUNICATIONS--7.4%
Comunicacion Celular,
Sr. Discount Notes, 0/14.125%, 2005 13,250,000 (a,b) 9,970,625
Microcell Telecommunications, Ser. B,
Sr. Discount Notes, 0/14%, 2006 10,000,000 (b) 9,275,000
Occidente y Caribe Celular, Ser. B,
Sr. Discount Notes, 0/14%, 2004 11,000,000 (b) 7,727,500
Orion Network Systems,
Sr. Discount Notes, 0/12.5%, 2007 32,045,000 (b) 13,298,675
Pagemart Nationwide,
Sr. Notes, 15%, 2005 13,500,000 12,993,750
53,265,550
TOTAL BONDS AND NOTES
(cost $835,857,418) 698,495,897
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--.1% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
BROADCASTING--.0%
Spanish Broadcasting System, Cl. A 21,400 (a,f) 465,450
UnitedGlobalCom, Cl. A 906 (f) 42,356
507,806
ENTERTAINMENT--.0%
Discovery Zone (warrants) 4,000 (a,f) 4
Discovery Zone, Cl. A (warrants) 37,400 (a,f) 37
Discovery Zone, Cl. B (warrants) 37,400 (a,f) 37
78
TELECOMMUNICATION/CARRIERS--.1%
WorldPort Communications (warrants) 276,449 (a,f) 673,844
WIRELESS COMMUNICATIONS--.0%
Comunicacion Celular (warrants) 1,750 (a,f) 35,219
TOTAL COMMON STOCKS
(cost $558,359) 1,216,947
PREFERRED STOCKS--.7% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
PUBLISHING;
Newscorp Overseas,
Ser. A., Cum., $2.15625
(cost $5,454,716) 216,973 4,854,771
------------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--.6% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER;
UBS Finance,
6.96%, 7/3/2000
(cost $4,258,353) 4,260,000 4,258,353
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT (cost $846,128,217) 98.2% 708,825,968
CASH AND RECEIVABLES (NET) 1.8% 13,052,287
NET ASSETS 100.0% 721,878,255
(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 JUNE 30, 2000,
THESE SECURITIES AMOUNTED TO $42,654,319 OR 5.9% OF NET ASSETS.
(B) ZERO COUPON UNTIL A SPECIFIED DATE AT WHICH TIME THE STATED COUPON RATE
BECOMES EFFECTIVE UNTIL MATURITY.
(C) VARIABLE RATE SECURITY--INTEREST RATE SUBJECT TO PERIODIC CHANGE.
(D) NON-INCOME PRODUCING--SECURITY IN DEFAULT.
(E) REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION; THE STATED
MATURITY IS 10/30/2005.
(F) NON-INCOME PRODUCING SECURITY.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 846,128,846 708,825,968
Interest and dividends receivable 20,753,194
Receivable for shares of Beneficial Interest subscribed 371,301
Paydowns receivable 28,600
729,979,063
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 860,632
Cash overdraft due to Custodian 5,111,242
Payable for shares of Beneficial Interest redeemed 2,128,934
8,100,808
--------------------------------------------------------------------------------
NET ASSETS ($) 721,878,255
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 917,696,629
Accumulated undistributed investment income--net 2,008,899
Accumulated net realized gain (loss) on investments (60,524,395)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 (137,302,878)
--------------------------------------------------------------------------------
NET ASSETS ($) 721,878,255
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 86,593,757 495,500,375 139,537,334 246,789
Shares Outstanding 8,716,559 49,886,631 14,040,596 24,862
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 9.93 9.93 9.94 9.93
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Interest 45,944,823
Cash dividends 233,924
TOTAL INCOME 46,178,747
EXPENSES:
Management fee--Note 2(a) 2,707,288
Distribution and service fees--Note 2(b) 2,849,943
Interest expense--Note 4 565
TOTAL EXPENSES 5,557,796
INVESTMENT INCOME--NET 40,620,951
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (24,678,180)
Net unrealized appreciation (depreciation) on investments (13,740,921)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (38,419,101)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,201,850
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
-------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 40,620,951 91,005,699
Net realized gain (loss) on investments (24,678,180) (18,202,136)
Net unrealized appreciation (depreciation)
on investments (13,740,921) (58,693,550)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,201,850 14,110,013
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (5,334,492) (13,467,432)
Class B shares (27,861,261) (57,065,809)
Class C shares (7,905,014) (18,945,063)
Class R shares (15,762) (22,591)
TOTAL DIVIDENDS (41,116,529) (89,500,895)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 24,537,532 129,666,728
Class B shares 29,866,125 178,313,048
Class C shares 9,666,618 65,677,422
Class R shares -- 209,810
Dividends reinvested:
Class A shares 1,919,615 6,252,511
Class B shares 7,655,732 15,659,923
Class C shares 2,437,722 5,791,684
Class R shares 7,973 13,585
Cost of shares redeemed:
Class A shares (41,973,398) (165,607,547)
Class B shares (78,186,743) (134,189,892)
Class C shares (34,965,520) (89,350,304)
Class R shares (76,800) (10)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (79,111,144) 12,436,958
TOTAL INCREASE (DECREASE) IN NET ASSETS (118,025,823) (62,953,924)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 839,904,078 902,858,002
END OF PERIOD 721,878,255 839,904,078
Undistributed investment income--net 2,008,899 2,504,477
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
June 30, 2000 Year Ended
CAPITAL SHARE TRANSACTIONS: (Unaudited) December 31, 1999
--------------------------------------------------------------------------------
CLASS A(A)
Shares sold 2,423,159 11,720,706
Shares issued for dividends reinvested 188,419 570,644
Shares redeemed (4,130,211) (15,044,058)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,518,633) (2,752,708)
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 2,914,943 16,090,888
Shares issued for dividends reinvested 753,022 1,437,007
Shares redeemed (7,625,035) (12,369,337)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (3,957,070) 5,158,558
--------------------------------------------------------------------------------
CLASS C
Shares sold 947,323 5,912,749
Shares issued for dividends reinvested 239,536 530,024
Shares redeemed (3,408,460) (8,200,482)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (2,221,601) (1,757,709)
--------------------------------------------------------------------------------
CLASS R
Shares sold -- 18,989
Shares issued for dividends reinvested 785 1,248
Shares redeemed (7,406) (1)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (6,621) 20,236
(A) DURING THE PERIOD ENDED JUNE 30, 2000, 43,390 CLASS B SHARES REPRESENTING
$444,685 WERE AUTOMATICALLY CONVERTED TO 43,420 CLASS A SHARES AND DURING THE
PERIOD ENDED DECEMBER 31, 1999, 6,007 CLASS B SHARES REPRESENTING $62,981 WERE
AUTOMATICALLY CONVERTED TO 6,010 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
June 30, 2000 Year Ended December 31,
--------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997(a)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 10.45 11.33 12.46 12.50
Investment Operations:
Investment income--net .56 1.12 1.15 .71
Net realized and unrealized gain (loss)
on investments (.52) (.90) (1.14) (.04)
Total from Investment Operations .04 .22 .01 .67
Distributions:
Dividends from investment income--net (.56) (1.10) (1.14) (.71)
Net asset value, end of period 9.93 10.45 11.33 12.46
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) .86(c) 1.99 (.10) 9.16(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average
net assets .95(c) .95 .95 .95(c)
Ratio of interest expense to average
net assets -- .01 .02 .08(c)
Ratio of net investment income
to average net assets 11.00(c) 10.19 9.55 9.34(c)
Portfolio Turnover Rate 9.20(d) 40.79 45.34 28.83(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 86,594 106,959 147,131 65,705
(A) FROM MAY 30, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
June 30, 2000 Year Ended December 31,
-------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 10.45 11.33 12.46 12.50
Investment Operations:
Investment income--net .53 1.06 1.09 .66
Net realized and unrealized gain (loss)
on investments (.51) (.89) (1.14) (.04)
Total from Investment Operations .02 .17 (.05) .62
Distributions:
Dividends from investment income--net (.54) (1.05) (1.08) (.66)
Net asset value, end of period 9.93 10.45 11.33 12.46
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) .36(c) 1.48 (.61) 8.57(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average
net assets 1.45(c) 1.45 1.45 1.45(c)
Ratio of interest expense to average
net assets -- .01 .02 .09(c)
Ratio of net investment income
to average net assets 10.49(c) 9.70 9.02 8.73(c)
Portfolio Turnover Rate 9.20(d) 40.79 45.34 28.83(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 495,500 562,605 551,415 198,057
(A) FROM MAY 30, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
June 30, 2000 Year Ended December 31,
-------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 10.45 11.33 12.47 12.50
Investment Operations:
Investment income--net .07 1.04 1.06 .65
Net realized and unrealized gain (loss)
on investments (.05) (.90) (1.15) (.03)
Total from Investment Operations .02 .14 (.09) .62
Distributions:
Dividends from investment income--net (.53) (1.02) (1.05) (.65)
Net asset value, end of period 9.94 10.45 11.33 12.47
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) .32(c) 1.23 (.93) 8.47(c)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average
net assets 1.70(c) 1.70 1.70 1.70(c)
Ratio of interest expense to average
net assets -- .01 .02 .09(c)
Ratio of net investment income
to average net assets 10.25(c) 9.45 8.77 8.54(c)
Portfolio Turnover Rate 9.20(d) 40.79 45.34 28.83(d)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 139,537 170,011 204,184 67,495
(A) FROM MAY 30, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
June 30, 2000 Year Ended December 31,
-------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997(a)
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 10.44 11.32 12.45 12.50
Investment Operations:
Investment income--net .59 1.05 1.25 .81
Net realized and unrealized gain (loss)
on investments (.52) (.80) (1.21) (.14)
Total from Investment Operations .07 .25 .04 .67
Distributions:
Dividends from investment income--net (.58) (1.13) (1.17) (.72)
Net asset value, end of period 9.93 10.44 11.32 12.45
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 1.30(b) 2.24 .14 9.26(b)
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to average
net assets .70(b) .70 .70 .75(b)
Ratio of interest expense to average
net assets -- .01 .03 .05(b)
Ratio of net investment income
to average net assets 11.11(b) 10.65 10.41 10.08(b)
Portfolio Turnover Rate 9.20(c) 40.79 45.34 28.83(c)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 247 329 127 127
(A) FROM MAY 30, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Limited Term High Income Fund (the "fund") is a separate
diversified series of The Dreyfus/Laurel Funds Trust (the "Trust") which is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
an open-end management investment company and operates as a series company
currently offering three series, including the fund. The fund's investment
objective is to provide high current income. The Dreyfus Corporation (the
"Manager" ) serves as the fund's investment manager. The Manager is a direct
subsidiary of Mellon Bank, N.A. (" Mellon Bank" ), which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Effective March 22, 2000 Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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"). 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 or service fees. Class R shares are offered without a
front-end sales charge or CDSC. Each class of shares has identical rights and
privileges, except with respect to distribution and service fees and voting
rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses) and
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 (excluding short-term
investments other than U.S. Treasury Bills) 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 direction of the Board of Trustees.
Short-term investments, other than U.S. Treasury Bills, 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
recognized on the ex-dividend date and 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
requirements of the Internal Revenue Code of 1986, as amended (the "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.
(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 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 $35,475,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1999. If not
applied, $8,327,000 of the carryover expires in fiscal 2006 and $27,148,000
expires in fiscal 2007.
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 .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, commitment fees, Rule 12b-1 distribution fees and expenses,
service 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-inter ested Trustees (including counsel fees). Each Trustee receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the " Dreyfus/Laurel Funds" ) attended, $2,000 for separate
committee meetings attended which are not held in conjunction with a regularly
scheduled board meeting and $500 for Board meetings and separate committee
meetings attended that are conducted by telephone and is reimbursed for travel
and out-of-pocket expenses. The Chairman of the Board receives an additional 25%
of such compensation (with the exception of reimbursable amounts). In the event
that there is a joint committee meeting of the Dreyfus/Laurel Funds and the
Dreyfus High Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and allocated to each series based on net assets. Amounts
required to be paid by the Trust directly to the non-interested Trustees, that
would be applied to offset a portion of the management fee payable to the
Manager, are in fact paid directly by the Manager to the non-interested
Trustees.
DSC retained $554 during the period ended June 30, 2000, from commissions earned
on sales of the fund's shares.
(b) Distribution and Service Plan: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares pay annually up to
. 25% of the value of its average daily net assets to compensate the distributor
for shareholder servicing activities and expenses primarily intended to result
in the sale of Class A shares. Under the Plan, Class B and Class C shares pay
the distributor for distributing their shares at an aggregate annual rate of
.50% and .75% of the value of the average daily net assets of Class B and Class
C shares, respectively. Class B and Class C shares are also subject to a Service
Plan adopted pursuant to Rule 12b-1, under which Class B and Class C shares pay
the distributor for providing certain services to the holders
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
of their 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
distribution or service fee. During the period ended June 30, 2000, Class A,
Class B and Class C shares were charged $120,013, $1,312,359 and $571,044,
respectively, pursuant to the Plan, of which $78,182, $859,097 and $368,892, for
Class A, Class B and Class C shares, respectively, were paid to DSC. During the
period ended June 30, 2000, Class B and Class C shares were charged $656,179 and
$190,348 respectively, pursuant to the Service Plan, of which $429,548 and
$8,428, respectively, were paid to DSC.
Under its terms, the Plan and Service 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 or in any agreement
related to the Plan or Service Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$67,827,035 and $143,088,347, respectively.
At June 30, 2000, accumulated net unrealized depreciation on investments was
$137,302,878, consisting of $2,240,999 gross unrealized appreciation and
$139,543,877 gross unrealized depreciation.
At June 30, 2000, 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 Lines of Credit:
The fund may borrow up to $20 million for leveraging purposes under a short-term
unsecured line of credit and 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.
The average daily amount of borrowings outstanding during the period ended June
30, 2000 was approximately $19,200 with a related weighted average annualized
interest rate of 5.90%.
The Fund
NOTES
For More Information
Dreyfus Premier Limited Term High 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call your financial representative or
1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 029SA006
Dreyfus
Premier Managed
Income Fund
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
21 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
Managed Income Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Managed
Income Fund, covering the six-month period from January 1, 2000 through June 30,
2000. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with David S. Hertan,
portfolio manager and a member of the Boston Company Asset Management Fixed
Income Team that manages the fund.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
bond market over the past six months. This was primarily a result of efforts by
the Federal Reserve Board (the "Fed" ) to forestall potential inflationary
pressures. The Fed raised short-term interest rates three times during the
reporting period, for a total increase of 1.00 percentage points. These rate
hikes contributed to a total interest-rate increase of 1.75 percentage points
since late June 1999, before the current reporting period began.
Higher interest rates led to an erosion of most bond prices, especially among
higher yielding securities. U.S. Treasury securities represented a notable
exception. Prices of these direct obligations of the federal government rose
primarily because of reduced supply amid robust demand from domestic and foreign
investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Managed Income Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF FUND PERFORMANCE
David S. Hertan, Portfolio Manager
How did Dreyfus Premier Managed Income Fund perform relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus Premier Managed Income
Fund produced a total return of 2.11% for Class A shares, 1.73% for Class B
shares, 1.74% for Class C shares and 2.24% for Class R shares.(1) In comparison,
the Lehman Brothers Aggregate Bond Index (the "Index") produced a total return
of 3.99% for the same period.(2)
We attribute the fund' s underperformance to the fact that we held a lower
percentage of U.S. Treasury bonds than did the Index during a period in which
U.S. Treasuries were the best-performing bond category.
What is the fund's investment approach?
The fund normally invests at least 65% of its total assets in United States
government debt and investment grade corporate bonds. We do not attempt to match
the sector percentages of any index, nor do we attempt to predict the direction
of interest rates by substantially altering the portfolio's sensitivity to
changes in rates. Instead, the heart of our investment process is selecting
individual securities that possess a combination of superior fundamentals and
attractive relative valuations.
What other factors influenced the fund's performance?
There were several reasons why the fund performed slightly below its benchmark
during the reporting period. First, due to the federal budget surplus the U.S.
Government announced that it was buying back certain U.S. Treasury bonds,
particularly those with longer maturities, and that it would reduce new
issuance. The unusual demand created by this action and the prospect of
shrinking supply caused U.S. Treasury securities, longer term in particular, to
outperform all other bond categories during the past six months. The fund,
however, contained a lower percentage of U.S. Treasury bonds compared to the
Index.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Second, the fund held a high percentage of assets in investment grade corporate
bonds, which did not perform as well as Treasury bonds. During the first half of
2000, the Federal Reserve Board (the "Fed") aggressively increased short-term
interest rates in an effort to slow the U.S. economy and stave off inflation.
Once interest rates began to rise, investors became concerned that the Fed's
actions could lead to a recession and cause corporate bonds to become more risky
from a credit standpoint. Here again, investors flocked to the safety associated
with Treasury securities, which are backed by the full faith and credit of the
U.S. Government.
The fund also held some high yield bonds, which do not carry an investment grade
rating. During the first six months of the year these securities did not perform
as well as investment grade bonds, primarily because investors were concerned
that these companies would have difficulty paying their debts in a weak economy.
Mortgage-backed securities produced somewhat better returns for the portfolio
during the period. Since mortgage-backed securities are typically backed by a
U.S. Government agency, credit risk is not a concern for these investments.
However, mortgage-backed securities were still not able to perform as well as
U.S. Treasury securities.
What is the fund's current strategy?
The fund's current strategy is to maintain its focus on high quality corporate
bonds and mortgage-backed securities, which, as of the end of the reporting
period, currently offer significantly more income than U.S. Treasury bonds. Now
that interest rates seem to have stabilized, investors have returned to these
securities. As of the end of the reporting period, mortgage-backed securities
and high quality corporate bonds were yielding approximately 8% versus a range
of 6% to 6.5% for U.S. Treasury securities.
We also are focusing our investments on those companies that have the strongest
balance sheets. Despite the booming economy, many corporate bond issuers have
seen their creditworthiness deteriorate in recent years. One reason for this is
that many bond issuers are companies whose stock prices have lagged the market.
In some of these cases, managements have elected to buy out stockholders, which
has effectively increased the companies' debt-to-equity ratio, making them less
attractive in our view.
Finally, we increased the fund's investment in U.S. Treasury securities,
particularly 30-year bonds, which we believe are becoming an increasingly scarce
commodity. Several current projections call for federal budget surpluses to
continue over the next 10 to 12 years. If this occurs, we believe the U.S.
Government is likely to buy back U.S. Treasury bonds from holders for many years
to come.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION 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. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE LEHMAN BROTHERS AGGREGATE BOND INDEX
IS A WIDELY ACCEPTED, UNMANAGED TOTAL RETURN INDEX OF CORPORATE, U.S. GOVERNMENT
AND U.S. GOVERNMENT AGENCY DEBT INSTRUMENTS, MORTGAGE-BACKED SECURITIES AND
ASSET-BACKED SECURITIES WITH AN AVERAGE MATURITY OF 1-10 YEARS.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
June 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
Principal
BONDS AND NOTES--104.8% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE AND AVIATION--.6%
United Technologies,
Deb., 7.5%, 2029 480,000 477,154
ASSET-BACKED CTFS.--14.2%
CIT Equipment Collateral,
Ser. 2000-1, Cl. A-4, 7.58%, 2008 616,000 619,080
CIT RV Trust:
Ser. 1998-A, Cl. A-4, 6.09%, 2012 1,696,000 1,649,877
Ser. 1998-A, Cl. A-5, 6.12%, 2013 1,280,000 1,237,171
CNH Equipment Trust,
Ser. 2000-A, Cl. A-4, 7.34%, 2007 1,078,000 1,073,957
Centex Home Equity,
Ser. 2000-B, Cl. A-3, 8.03%, 2026 870,000 871,903
Citibank Credit Card Master Trust I,
Ser. 1999-2, Cl. A, 5.875%, 2011 338,000 308,619
Discover Card Master Trust I,
Ser. 1999-5, Cl. A, 6.831%, 2006 714,000 (a) 715,981
Distribution Financial Services Trust:
Ser. 1999-1, Cl. A-5, 5.97%, 2013 1,349,000 1,302,628
Ser. 1999-3, Cl. A-4, 6.65%, 2011 186,000 183,384
First USA Credit Card Master Trust:
Ser. 1996-6, Cl. A, 6.775%, 2006 32,000 (a) 31,904
Ser. 1998-4, Cl. A, 6.769%, 2008 429,000 (a) 428,436
The Money Store Home Equity Trust:
Ser. 1994-B, Cl. A-5, 8.025%, 2024 310,000 312,296
Ser. 1996-B, Cl. A-8, 7.91%, 2024 27,000 27,042
Ser. 1996-C, Cl. A-6, 7.69%, 2024 326,000 326,101
Newcourt Equipment Trust Securities,
Ser. 1999-1, Cl. A-4, 7.18%, 2005 607,000 606,572
Residential Asset Securities,
Ser. 2000-KS3, Cl. AI-3, 7.805%, 2025 532,000 532,332
Sears Credit Account Master Trust,
Ser. 1996-3, Cl. A, 7%, 2008 627,000 625,671
10,852,954
AUTOMOTIVE--2.7%
DaimlerChrysler,
Bonds, 7.75%, 2005 1,665,000 1,681,016
Ford Motor,
Notes, 7.45%, 2031 370,000 347,700
2,028,716
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
BANKING--6.8%
Bank of America,
Notes, 7.875%, 2005 675,000 683,857
BankBoston,
Sr. Notes, 6.125%, 2002 689,000 674,086
Chase Manhattan,
Sub. Notes, 7%, 2009 530,000 500,840
Citigroup,
Sr. Notes, 5.8%, 2004 625,000 596,369
First National Bank of Boston,
Sub. Notes, 7.375%, 2006 758,000 738,685
First Union,
Notes, 6.95%, 2004 480,000 466,838
National Westminster Bank,
Sub. Notes, 7.375%, 2009 675,000 657,018
U. S. Bank,
Sub. Notes, 5.7%, 2008 305,000 263,368
Wells Fargo,
Notes, 6.625%, 2004 624,000 609,194
5,190,255
BROADCASTING & MEDIA--1.4%
Adelphia Communications, Ser. B,
Sr. Notes, 8.125%, 2003 500,000 473,750
CSC Holdings,
Sr. Notes, 7.875%, 2007 205,000 198,826
Charter Communications Holdings,
Sr. Notes, 8.25%, 2007 360,000 319,500
Mediacom,
Sr. Notes, 7.875%, 2011 85,000 74,800
1,066,876
CHEMICALS--.9%
Dow Chemical,
Deb., 7.375%, 2029 470,000 458,322
duPont (E.I.) de Nemours,
Notes, 6.75%, 2004 218,000 215,468
673,790
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--3.1%
Bear Stearns Commercial Mortgage Securities,
Ser. 2000-WF1, Cl. A-1, 7.64%, 2009 251,731 254,091
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE PASS-THROUGH CTFS. (CONTINUED)
COMM,
Ser. 1999-1, Cl. A-2, 6.455%, 2008 1,455,000 1,363,681
CS First Boston Mortgage Securities,
Ser. 1999-C1, Cl. A-2, 7.29%, 2009 402,000 396,807
First Union National Bank Commercial Mortgage,
Ser. 2000-C1, Cl. A-2, 7.841%, 2010 358,000 364,265
2,378,844
CONSUMER--1.3%
ICN Pharmaceuticals, Ser. B,
Sr. Notes, 9.25%, 2005 470,000 467,650
KinderCare Learning Centers,
Sr. Sub. Notes, 9.5%, 2009 325,000 300,625
Rayovac, Ser. B,
Sr. Sub. Notes, 10.25%, 2006 195,000 200,850
969,125
ENVIRONMENTAL--.9%
Waste Management,
Conv. Sub. Notes, 4%, 2002 730,000 680,725
FINANCIAL SERVICES--6.8%
Associates Corp. of North America:
Sr. Notes, 5.75%, 2003 415,000 392,387
Sr. Notes, 5.8%, 2004 860,000 806,642
DLJ,
Sr. Notes, 5.875%, 2002 750,000 729,869
Ford Motor Credit,
Notes, 7.875%, 2010 250,000 250,080
GS Escrow,
Sr. Notes, 7%, 2003 675,000 626,332
Goldman Sachs Group,
Notes, 6.65%, 2009 465,000 426,619
Household Finance,
Notes, 8%, 2005 710,000 716,330
Morgan Stanley Dean Witter & Co.,
Notes, 7.125%, 2003 550,000 546,651
Paine Webber Group,
Sr. Notes, 6.375%, 2004 715,000 675,521
5,170,431
FOOD & BEVERAGES--.9%
Nabisco,
Notes, 6%, 2001 735,000 724,459
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
FOREIGN--5.7%
Canadian National Railway,
Notes, 6.9%, 2028 370,000 322,334
Deutsche Telekom International Finance,
Notes, 8%, 2010 300,000 303,043
Diageo Capital,
Notes, 6.625%, 2004 960,000 935,374
Global Crossing Holdings,
Sr. Notes, 9.125%, 2006 450,000 433,125
Korea Development Bank,
Bond, 7.375%, 2004 970,000 945,557
Province of Quebec:
Deb., 7.5%, 2029 165,000 162,363
Sr. Notes, 5.75%, 2009 795,000 712,640
Republic of Korea,
Notes, 8.875%, 2008 325,000 337,594
United Mexican States,
Notes, 9.875%, 2010 219,000 227,213
4,379,243
INDUSTRIAL--2.3%
American Standard,
Sr. Notes, 7.125%, 2003 645,000 617,587
Eagle-Picher Holdings,
Sr. Discount Notes, 0%, 2003 600,000 (b) 151,500
Textron,
Notes, 6.375%, 2004 860,000 836,425
U. S. Can, Ser. B,
Sr. Sub. Notes, 10.125%, 2006 175,000 180,250
1,785,762
INSURANCE--.6%
Hartford Financial Services Group,
Sr. Notes, 7.75%, 2005 460,000 461,987
OIL AND GAS--4.4%
Coastal:
Notes, 6.2%, 2004 985,000 943,186
Sr. Notes, 8.125%, 2002 240,000 244,705
Conoco,
Sr. Notes, 5.9%, 2004 606,000 577,748
Enron,
Notes, 7.875%, 2003 675,000 680,044
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
OIL AND GAS (CONTINUED)
Ocean Energy:
Notes, 8.875%, 2007 420,000 420,000
Sr. Notes, 7.875%, 2003 230,000 227,700
Williams,
Notes, 6.2%, 2002 280,000 274,324
3,367,707
PAPER PRODUCTS--1.0%
International Paper,
Notes, 8.125%, 2005 720,000 (c) 727,088
RETAIL--.9%
Federated Department Stores,
Sr. Notes, 8.5%, 2003 640,000 651,075
TECHNOLOGY--.9%
DynCorp,
Sr. Sub. Notes, 9.5%, 2007 405,000 309,825
Electronic Data Systems,
Notes, 6.85%, 2004 370,000 365,279
675,104
TELECOMMUNICATIONS--2.4%
McLeodUSA,
Sr. Notes, 8.125%, 2009 655,000 592,775
NEXTLINK Communications,
Sr. Notes, 10.75%, 2009 465,000 460,350
Nextel Communications,
Sr. Notes, 9.375%, 2009 490,000 470,400
Time Warner Telecommunications,
Sr. Notes, 9.75%, 2008 305,000 296,613
1,820,138
TRANSPORTATION--.9%
Burlington North Santa Fe,
Deb., 6.75%, 2029 270,000 230,447
Union Pacific,
Notes, 6.625%, 2008 520,000 480,178
710,625
Principal
BONDS AND NOTES (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. GOVERNMENTS--6.5%
U. S. Treasury Bonds:
6.125%, 8/15/2029 2,805,000 2,837,258
7.25%, 8/15/2022 235,000 263,712
U. S. Treasury Notes,
7.875%, 11/15/2004 190,000 201,174
U. S. Treasury Principal Strips,
0%, 8/15/2022 6,340,000 1,649,795
4,951,939
U. S. GOVERNMENT AGENCIES/MORTGAGE BACKED--36.7%
Federal Home Loan Mortgage Corp.:
7% 2,504,000 (d) 2,421,042
7.5% 573,000 (d) 571,923
Federal National Mortgage Association:
Deb., 7.25%, 2030 389,000 397,258
6.5% 6,285,000 (d) 5,925,561
7% 553,000 (d) 533,816
7%, 10/1/2014-3/1/2015 862,429 846,526
7.5%, 4/1/2005-5/1/2030 7,469,290 7,365,507
8% 2,929,100 (d) 2,941,900
Government National Mortgage Association I:
6.5%, 7/15/2029-9/15/2029 4,373,591 4,153,512
8% 2,861,000 (d) 2,892,271
28,049,316
UTILITIES--2.9%
CMS Panhandle Holdings,
Sr. Notes, 6.125%, 2004 599,000 561,490
Calpine:
Sr. Notes, 7.625%, 2006 70,000 66,150
Sr. Notes, 7.75%, 2009 310,000 293,725
National Rural Utilities,
Coll. Trust Ctfs, 5.7%, 2010 565,000 488,575
TXU Eastern Funding,
Gtd. Notes, 6.45%, 2005 855,000 797,972
2,207,912
TOTAL BONDS AND NOTES
(cost $81,124,198) 80,001,225
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM INVESTMENTS--19.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER;
General Electric Capital Corp.,
6.9%, 7/3/2000
(cost $14,523,000) 14,523,000 14,523,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $95,647,198) 123.8% 94,524,225
LIABILITIES, LESS CASH AND RECEIVABLES (23.8%) (18,171,161)
NET ASSETS 100.0% 76,353,064
(A) VARIABLE INTEREST RATE -- INTEREST RATE SUBJECT TO CHANGE PERIODICALLY.
(B) ZERO COUPON UNTIL YEAR AT WHICH TIME A STATED COUPON BECOMES EFFECTIVE.
(C) 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 JUNE 30, 2000,
THESE SECURITIES AMOUNTED TO$727,088 OR 1.0% OF NET ASSETS.
(D) PURCHASED ON A FORWARD COMMITMENT BASIS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 95,647,198 94,524,225
Cash 215,720
Interest receivable 874,196
Receivable for investment securities sold 509,778
Receivable for shares of Beneficial Interest subscribed 42
96,123,961
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 71,434
Payable for investment securities purchased 15,734,082
Payable for shares of Beneficial Interest redeemed 3,965,381
19,770,897
--------------------------------------------------------------------------------
NET ASSETS ($) 76,353,064
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 91,833,420
Accumulated net realized gain (loss) on investments (14,357,383)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 (1,122,973)
--------------------------------------------------------------------------------
NET ASSETS ($) 76,353,064
<TABLE>
NET ASSET VALUE PER SHARE
Class A Class B Class C Class R
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 51,423,082 14,240,794 2,720,312 7,968,876
Shares Outstanding 5,200,192 1,440,337 274,875 806,528
--------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 9.89 9.89 9.90 9.88
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 2,961,156
EXPENSES:
Management fee--Note 2(a) 289,704
Distribution and service fees--Note 2(b) 158,784
Loan commitment fees--Note 4 254
TOTAL EXPENSES 448,742
INVESTMENT INCOME--NET 2,512,414
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (2,898,767)
Net unrealized appreciation (depreciation) on investments 2,008,302
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (890,465)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,621,949
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,512,414 5,923,478
Net realized gain (loss) on investments (2,898,767) (5,146,935)
Net unrealized appreciation
(depreciation) on investments 2,008,302 (2,712,897)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,621,949 (1,936,354)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,767,465) (4,065,094)
Class B shares (398,589) (890,296)
Class C shares (83,558) (262,662)
Class R shares (274,084) (622,919)
TOTAL DIVIDENDS (2,523,696) (5,840,971)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 3,395,947 5,871,958
Class B shares 2,040,058 8,678,168
Class C shares 565,770 2,251,472
Class R shares 731,915 2,530,647
Dividends reinvested:
Class A shares 1,344,238 3,144,076
Class B shares 176,126 399,234
Class C shares 26,551 48,577
Class R shares 243,565 559,559
Cost of shares redeemed:
Class A shares (13,459,348) (14,888,410)
Class B shares (3,723,951) (8,181,002)
Class C shares (1,528,676) (3,580,979)
Class R shares (2,183,362) (3,732,725)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (12,371,167) (6,899,425)
TOTAL INCREASE (DECREASE) IN NET ASSETS (13,272,914) (14,676,750)
--------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 89,625,978 104,302,728
END OF PERIOD 76,353,064 89,625,978
Undistributed investment income--net -- 11,282
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (continued)
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 345,454 563,004
Shares issued for dividends reinvested 136,290 303,602
Shares redeemed (1,363,975) (1,433,912)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (882,231) (567,306)
--------------------------------------------------------------------------------
CLASS B(A)
Shares sold 206,523 832,744
Shares issued for dividends reinvested 17,858 38,617
Shares redeemed (376,590) (788,447)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (152,209) 82,914
--------------------------------------------------------------------------------
CLASS C
Shares sold 56,995 214,283
Shares issued for dividends reinvested 2,689 4,697
Shares redeemed (154,415) (345,558)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (94,731) (126,578)
--------------------------------------------------------------------------------
CLASS R
Shares sold 74,088 242,029
Shares issued for dividends reinvested 24,711 54,093
Shares redeemed (221,128) (357,508)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (122,329) (61,386)
(A) DURING THE PERIOD ENDED JUNE 30, 2000, 36,296 CLASS B SHARES REPRESENTING
$357,685 WERE AUTOMATICALLY CONVERTED TO 36,296 CLASS A SHARES AND DURING THE
PERIOD ENDED DECEMBER 31, 1999, 3,908 CLASS B SHARES REPRESENTING $39,354 WERE
AUTOMATICALLY CONVERTED TO 3,908 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover) reflects
financial results for a single fund share. Total return shows how much your
investment in the fund would have increased (or decreased) during each period,
assuming you had reinvested all dividends and distributions. These figures have
been derived from the fund's financial statements.
<TABLE>
Six Months Ended Year Ended December 31,
June 30, 2000 ------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 9.99 10.81 11.01 10.73 11.08 10.12
Investment Operations:
Investment income--net .30 .64 .73 .73 .69 .75
Net realized and unrealized
gain (loss) on investments (.09) (.82) (.19) .27 (.35) .96
Total from Investment Operations .21 (.18) .54 1.00 .34 1.71
Distributions:
Dividends from investment
income--net (.31) (.64) (.74) (.72) (.69) (.75)
Net asset value, end of period 9.89 9.99 10.81 11.01 10.73 11.08
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 4.23(b) (1.75) 4.90 9.80 3.42 17.32
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses
to average net assets .95(b) .95 .95 .95 .95 .95
Ratio of net investment income
to average net assets 6.20(b) 6.21 6.62 6.74 6.48 7.08
Portfolio Turnover Rate 229.52(c) 309.42 238.95 244.44 251.66 236.10
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 51,423 60,755 71,902 72,878 77,305 80,782
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended Year Ended December 31,
June 30, 2000 -----------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 9.99 10.81 11.01 10.73 11.08 10.12
Investment Operations:
Investment income--net .27 .57 .64 .65 .61 .67
Net realized and unrealized
gain (loss) on investments (.10) (.83) (.19) .27 (.35) .96
Total from Investment Operations .17 (.26) .45 .92 .26 1.63
Distributions:
Dividends from investment
income--net (.27) (.56) (.65) (.64) (.61) (.67)
Net asset value, end of period 9.89 9.99 10.81 11.01 10.73 11.08
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) 3.47(b) (2.48) 4.10 8.97 2.54 16.55
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses
to average net assets 1.70(b) 1.70 1.70 1.70 1.70 1.69
Ratio of net investment income
to average net assets 5.46(b) 5.44 5.81 5.98 5.77 6.41
Portfolio Turnover Rate 229.52(c) 309.42 238.95 244.44 251.66 236.10
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 14,241 15,905 16,325 6,896 4,973 2,236
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended Year Ended December 31,
June 30, 2000 ----------------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 10.00 10.82 11.02 10.73 11.08 10.12
Investment Operations:
Investment income--net .26 .57 .64 .64 .61 .67
Net realized and unrealized
gain (loss) on investments (.09) (.83) (.19) .29 (.35) .96
Total from Investment Operations .17 (.26) .45 .93 .26 1.63
Distributions:
Dividends from
investment income--net (.27) (.56) (.65) (.64) (.61) (.67)
Net asset value, end of period 9.90 10.00 10.82 11.02 10.73 11.08
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) 3.49(b) (2.48) 4.17 8.96 2.49 16.54
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses
to average net assets 1.70(b) 1.70 1.69 1.70 1.68 1.66
Ratio of net investment income
to average net assets 5.46(b) 5.46 5.74 5.95 5.69 6.03
Portfolio Turnover Rate 229.52(c) 309.42 238.95 244.44 251.66 236.10
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 2,720 3,695 5,369 1,007 420 67
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended Year Ended December 31,
June 30, 2000 ------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 9.98 10.81 11.01 10.73 11.08 10.12
Investment Operations:
Investment income--net .33 .67 .74 .76 .72 .78
Net realized and unrealized
gain (loss) on investments (.11) (.84) (.17) .27 (.35) .96
Total from Investment Operations .22 (.17) .57 1.03 .37 1.74
Distributions:
Dividends from investment
income--net (.32) (.66) (.77) (.75) (.72) (.78)
Net asset value, end of period 9.88 9.98 10.81 11.01 10.73 11.08
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 4.49(a) (1.57) 5.26 9.97 3.58 17.71
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .70(a) .70 .70 .70 .70 .70
Ratio of net investment income
to average net assets 6.44(a) 6.45 6.77 6.99 6.74 7.31
Portfolio Turnover Rate 229.52(b) 309.42 238.95 244.44 251.66 236.10
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 7,969 9,270 10,707 11,031 12,567 11,532
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Managed Income Fund (the "fund") is a separate diversified
series of The Dreyfus/Laurel Funds Trust (the "Trust") which is registered under
the Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company and operates as a series company currently
offering three series, including 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 (the "Manager") serves as the fund's investment manager.
Dreyfus is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank"), which is a
wholly-owned subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, became the distributor of the fund's shares. Prior to
March 22, 2000, Premier Mutual Fund Services, Inc. was the distributor. 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"). Class B shares
automatically convert to Class A shares after six years. 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
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 (excluding short-term
investments other than U.S. Treasury Bills) 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 direction of the Board of Trustees.
Short-term investments, excluding U.S. Treasury Bills, are carried at amortized
cost, which approximates market 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 and 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 of 1986, as
amended (the "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.
(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 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 $10,733,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1999. If not
applied, $4,554,000 of the carryover expires in fiscal 2002, $539,000 expires in
fiscal 2003, $1,207,000 expires in fiscal 2004 and $4,433,000 expires in fiscal
2007.
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 .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, commitment fees, Rule 12b-1 distribution fees and expenses,
service fees, 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 fees). Each trustee receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust
(the "Dreyfus/Laurel Funds" ) attended, $2,000 for separate committee meetings
attended which are not held in conjunction with a regularly scheduled board
meeting and $500 for Board meetings and separate committee meetings attended
that are conducted by telephone and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional 25% of such
compensation (with the exception of reimbursable amounts). These fees pertain to
the Dreyfus/Laurel Funds and are charged and allocated to each series based on
net assets. In the event that there is a joint committee meeting of the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund, the $2,000 fee
will be allocated between the Dreyfus/Laurel Funds and the Dreyfus High Yield
Strategies Fund. Amounts required to be paid by the Trust directly to the
non-interested trustees, that would be applied to offset a portion of the
management fee payable to the Manager, are in fact paid directly by the Manager
to the non-interested trustees.
DSC retained $6,355 during the period ended June 30, 2000, from commissions
earned on sales of the fund's shares.
(b) Distribution and service plan: Under the Distribution plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, 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 for shareholder servicing activities and
expenses primarily intended to result in the sale of Class A shares. Under the
Plan, Class B and Class C shares may pay the distributor for distributing their
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, under which the fund
pays 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
distribution fee or service fee. During the period ended June 30, 2000, Class A,
Class B and Class C shares were charged $70,922, $54,488 and $11,408
respectively, pursuant to the Plan, of which $66,491, $36,073 and $7,327 for
Class A, Class B and Class C shares, respectively, were paid to DSC. Class B and
Class C shares were charged $18,163 and $3,803, respectively, pursuant to the
Service Plan, of which $12,025 and $71 for Class B and Class C shares,
respectively, were paid to DSC.
Under its terms, the Plan and Service 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 or in any agreement
related to the Plan or Service Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales (including paydowns) of investment
securities, excluding short-term securities, during the period ended June 30,
2000, amounted to $197,055,523 and $204,860,880, respectively.
At June 30, 2000, accumulated net unrealized depreciation on investments was
$1,122,973, consisting of $386,335 gross unrealized appreciation and $1,509,308
gross unrealized depreciation.
At June 30, 2000, 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 $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended June
30, 2000, the fund did not borrow under the Facility.
The Fund
For More Information
Dreyfus 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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call your financial representative or
1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 349SA006
