LETTER TO SHAREHOLDERS
Dear Fellow Shareholder:
This letter will review the Dreyfus New Leaders Fund's performance for
the six months ended June 30, 1994. While no pleasure can be taken from being
down -3.46% in total return for the period,* your manager takes some pride in
the relative performance comparisons listed below.
Especially against the small company-weighted indices, the Russell 2000
and the NASDAQ Composite, your Fund retained the defensive all-weather
approach mentioned by Morningstar, Inc. some years ago. In fact, Morningstar
as of 6/30/94 continued to award the Fund a "Four Star" rating in the equity
category. Ten percent of the funds in an asset class receive five stars and
22.5% receive four stars.**
In its first review of New Leaders, the Value Line Mutual Fund Survey***
dated June 28, 1994 awarded the Fund its highest rating, an "Overall Rank" of
1 for performance in the small company equity category, which includes 93
funds. "Overall Ranks" are assigned on a scale of 1 to 5 with 10% of funds
assigned an "Overall Rank" of 1.
<TABLE>
DREYFUS
NEW NASDAQ RUSSELL WILSHIRE S & P
LEADERS* COMPOSITE 2000* 5000 500 *
------------ ------------ ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
YEAR-TO-DATE
12/31/93-6/30/94... -3.46% -9.12% -6.44% -5.64% -3.38%
INCEPTION-TO-DATE
1/31/85-6/30/94 ... +265.91% +153.30% +150.83% +138.19% +238.55%
</TABLE>
Sources: Lipper Analytical Services, Inc.; THE WALL STREET JOURNAL; The
Russell Company. The Wilshire 5000 Index, The
Russell 2000 (Registration Mark) Index, the Standard & Poor's 500 Composite
Stock Price Index, and the NASDAQ Composite Index of
Over-The-Counter Stocks are widely accepted unmanaged indices of various
aspects of stock market performance.
+ These figures are from 1/31/85 since Lipper Analytical Services'
calculations are based on net asset values as of month's end. The actual
inception date of Dreyfus New Leaders was 1/29/85.
Average annual total returns of your Fund were 14.82%, 12.40%, and 7.54%
since inception on 1/29/85, and for the five-year and one-year periods ended
6/30/94, respectively.****
As a further benchmark, New Leaders continues to perform well against the
Lipper Small Company Growth Fund Index,***** which lost -8.99% for the six
months ended 6/30/94, and has gained +161.14 during the period since the
inception of New Leaders.
Looking back over the past six months, you may recall the conditions we
reviewed in the 1993 year-end Letter To Shareholders. Speculation has
displayed itself in both domestic "small caps" and foreign "emerging"
markets. In response to this, our activity became cautious, primarily
exhibited as the broad diversification of the Fund's investments.
Furthermore, as of June 30, 1994 we held cash equivalents of
approximately 20%. Although this positioning has served well, we cannot allow
lethargy to set in as the U.S. economy persistently moves ahead, and the
condition of our major trading partners improves as well.
For the first time in many years, our intent is to use a portion of our
cash to purchase securities in the technology sector. It has been within the
high technology area that much valuation damage has been done in the past few
months, creating a number of interesting buying opportunities.
As a core theme within New Leaders for the past two years, we continue our
careful selection of smaller companies with
significant exposure to foreign markets. Generally, they have been capital
goods or specialty materials companies. But clearly, in many technology
niches as well, it is American creativity that offers new telecommunications
products which link global households for the first time. It is our software
that allows companies anywhere to work with sought-after consultants on the
other side of the globe. Your managers are not interested in the dreams
alone, but would hope to find tomorrow's Motorolas, or Microsofts, or Intels
on reasonable terms where market leadership is possible and corporate capital
is adequate.
As we have in the past, please accept our thanks for your loyalty.
Very truly yours,
(Thomas A. Frank Signature Logo)
Thomas A. Frank
President
August 9, 1994
New York, N.Y.
*Total return represents the change during the period in a hypothetical
account with dividends reinvested.
**Source: Morningstar, Inc., June 30, 1994. Morningstar proprietary ratings
reflect historical risk-adjusted performance and are subject to change every
month. Funds with at least three years of performance history are assigned
ratings from one star (lowest) to five stars (highest). Morningstar ratings
are calculated from the Fund's three-, five- and ten-year average annual
returns (as applicable) with appropriate fee adjustment and a risk factor
that reflects Fund performance relative to three-month Treasury bill monthly
returns.
***Value Line Mutual Fund Survey calculates an "Overall Rank" for each fund
with at least three years of performance history. The "Overall Rank" is based
on one- and five-year growth persistence, as well as three-year risk-adjusted
performance. Loads are not factored into the "Overall Rank". Growth
persistence is a proprietary Value Line statistic that evaluates the
consistency with which a fund has earned positive relative monthly returns
versus all other funds against which it is being ranked.
****Past performance is no guarantee of future results. Net asset value and
investment return fluctuate so that a shareholder may receive more or less
than original cost upon redemption. There is a 1% redemption fee on Fund
shares redeemed or exchanged within the first six months of issuance. In the
pursuit of greater rewards, investing in small capitalization companies
involves increased risk. Portfolio composition is subject to change at any
time. More complete information, including charges and expenses, is contained
in the Fund's Prospectus. Please read it carefully.
*****Source: Lipper Analytical Services, Inc. - The Lipper Small Company
Growth Fund Index is a net asset value-weighted index of the 30 largest small
company growth funds. It is calculated daily with adjustments for income
dividends and capital gains distributions as of the ex-dividend dates.
<TABLE>
DREYFUS NEW LEADERS FUND, INC. JUNE 30, 1994
BROAD SECTOR ALLOCATION VERSUS BENCHMARK
[Exhibit A] [Exhibit B]
DREYFUS NEW LEADERS FUND* RUSSELL 2000 INDEX**
Sector allocations in the Fund's pie chart are broader groupings than are
listed in the Report's Statement of Investments. Portfolio composition is
subject to change at any time.
** The Russell 2000 Index is an unmanaged index and is composed of the 2,000
smallest companies in the Russell 3000 Index. The Russell 3000 Index is
composed of 3,000 of the largest U.S. companies by market capitalization.
<S> <C> <C>
ASSET ALLOCATION*
Common Stocks................................................... 79.9%
Preferred Stock................................................. 0.2
Cash Equivalents................................................ 19.9
---------
100.0%
TEN LARGEST EQUITY HOLDINGS*
NovaCare........................................................ 1.6%
Georgia Gulf.................................................... 1.5
Crescent Real Estate Equities................................... 1.5
Canandaigua Wine, Cl. A......................................... 1.4
Parker & Parsley Petroleum...................................... 1.4
Precision Castparts............................................. 1.3
Universal Health Services, Cl. B................................ 1.3
Colonial BancGroup, Cl. A....................................... 1.3
Coastal Healthcare Group........................................ 1.2
Airgas.......................................................... 1.2
* All percentages shown above are based on Total Net Assets.
</TABLE>
<TABLE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS--79.9% SHARES VALUE
-------------- --------------
<S> <C> <C> <C> <C>
CONSUMER DURABLES--.9% First Alert 70,000 $ 1,855,000
Standard Motor Products.......... 75,000 1,331,250
--------------
3,186,250
--------------
CONSUMER NON-DURABLE--4.8% Canandaigua Wine, Cl. A..........(a) 195,000 4,875,000
Dr. Pepper/Seven-Up Cos..........(a) 150,000 3,450,000
Eskimo Pie....................... 139,500 2,511,000
IBP.............................. 135,000 3,594,375
Norton McNaughton................ 129,900 2,630,475
--------------
17,060,850
--------------
CONSUMER SERVICES--1.6% Cinergi Pictures Enertainment.... 250,000 2,250,000
Goldwyn (Samuel).................(a) 76,000 589,000
Individual Investor Group.. (a,b,d) 307,692 982,691
Savoy Pictures Entertainment... (a) 150,000 1,987,500
--------------
5,809,191
--------------
ENERGY--8.2% Cairn Energy USA.................(a) 300,000 2,475,000
Coda Energy...................... (a) 550,000 3,781,250
Dreco Energy Services, Cl. A..... (a,b) 390,000 2,730,000
Dual Drilling.................... 325,000 3,615,625
Energy Ventures.................. (a) 80,000 1,020,000
Foreland......................... (a) 450,000 1,040,625
ICO.............................. 270,000 1,552,500
International Colin Energy....... 187,500 2,179,687
Noble Drilling................... (a) 200,000 1,600,000
Parker & Parsley Petroleum....... 190,000 4,845,000
Trident NGL Holdings............. 280,000 2,730,000
Unit............................. (a) 457,500 1,315,313
--------------
28,885,000
--------------
FINANCIAL--15.1% American Eagle Group............. 200,000 1,900,000
Baldwin & Lyons, Cl. B (non-voting) 275,000 4,056,250
Capital Guaranty................. 110,000 1,677,500
Chittenden....................... 95,000 1,995,000
Citation Insurance Group........ (a) 100,000 625,000
City National.................... (a) 115,000 1,150,000
Colonial BancGroup, Cl. A ....... 205,000 4,484,375
Commercial Net Lease Realty...... 90,000 1,226,250
Crescent Real Estate Equities.... 195,000 5,265,000
Dime Bancorp..................... (a) 200,000 1,975,000
Equitable of Iowa................ 105,000 3,320,625
Executive Risk................... 230,000 2,990,000
Guaranty National................ 112,500 1,673,438
Merchants Group.................. 130,000 2,145,000
Midland Financial Group.......... (a) 70,000 1,487,500
National Re Holdings............. 70,000 1,811,250
ONBANCorp........................ 100,000 3,050,000
Presidential Life................ 500,000 3,437,500
Sizeler Property Investors....... 220,000 2,805,000
Synovus Financial................ 90,000 1,608,750
Trenwick Group................... 75,000 2,981,250
Wellsford Residential Property Trust... 75,000 1,706,250
--------------
53,370,938
--------------
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
HEALTH CARE--13.9% Abbey Healthcare Group........... (a) 150,000 $ 2,268,750
Advantage Health................. (a) 101,500 2,258,375
Charter Medical.................. (a) 70,000 1,583,750
Coastal Healthcare Group......... (a) 127,500 4,303,125
Community Psychiatric Centers.... 300,000 3,562,500
CorVel........................... (a) 150,000 3,150,000
Genelabs Technologies............ (a,d) 111,111 225,000
Genesis Health Ventures.......... (a) 90,000 2,283,750
Horizon Healthcare............... (a) 135,000 3,088,125
i-STAT........................... (a) 75,000 993,750
Lincare Holdings................. (a) 110,000 2,131,250
Medisense........................ 50,000 600,000
NovaCare......................... (a) 350,000 5,600,000
Noven Pharmaceuticals............ (a) 125,000 1,687,500
OrNda Healthcorp................. (a) 180,000 2,385,000
Physician Sales & Service........ 125,000 1,906,250
Ramsay Health Care............... (a) 300,000 2,025,000
Regency Health Services.......... (a) 75,000 1,106,250
T2 Medical....................... 355,000 3,683,125
Universal Health Services, Cl. B (a) 175,000 4,571,875
--------------
49,413,375
--------------
INDUSTRIAL SERVICES--2.5% AAR.............................. 100,000 1,350,000
CBI Industries................... 75,000 2,100,000
EnSys Environmental Products..... 110,500 372,938
Granite Construction............. 70,000 1,382,500
Kaiser Resources................. (a) 164,500 1,974,000
U.S. Delivery Systems............ 150,000 1,687,500
--------------
8,866,938
--------------
NON-ENERGY MINERALS--4.3% Birmingham Steel................. 54,000 1,458,000
Cadiz Land....................... (a) 225,000 1,153,125
Cleveland-Cliffs................. 78,000 2,964,000
Glamis Gold...................... 100,000 675,000
Huntco, Cl. A.................... 115,000 2,558,750
IMCO Recycling................... (a) 150,000 2,100,000
OM Group......................... 150,000 3,000,000
Webco Industries................. 76,300 1,182,650
--------------
15,091,525
--------------
PROCESS INDUSTRIES--8.9% Airgas........................... (a) 160,000 4,220,000
Albany International, Cl. A...... 170,000 3,208,750
Crompton & Knowles............... 120,000 2,070,000
Cytec Industries............... (a) 175,000 3,478,125
Ecolab........................... 125,000 2,750,000
Georgia Gulf................... (a) 157,500 5,394,375
Lilly Industries Inc., Cl. A .... 135,000 1,856,250
Longview Fibre................... 132,500 2,318,750
Mosinee Paper.................... 75,000 2,418,750
Schulman (A.).................... 150,000 3,881,250
--------------
31,596,250
--------------
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
PRODUCER MANUFACTURING--10.2% Amcast Industrial................ 70,000 $ 1,531,250
Apogee........................... 50,000 878,125
Applied Power, Cl. A ............ 135,000 2,750,625
BW/IP Holdings, Cl. A ........... 180,000 3,150,000
Cascade.......................... 100,000 2,200,000
Danaher.......................... 87,000 3,632,250
Flair............................ 182,500 3,558,750
Greenfield Industries............ 150,000 2,925,000
Johnstown America Industries..... (a) 58,000 1,174,500
Kaydon........................... 18,000 382,500
MRS Technology................... 70,000 595,000
Moorco International............. 150,000 2,381,250
Newcor........................... 110,000 1,182,500
Nordson.......................... 35,000 1,920,625
Precision Castparts.............. 150,000 4,762,500
Rohr Industries.................. (a) 250,000 2,625,000
Roper Industries................. 20,000 525,000
--------------
36,174,875
--------------
RETAIL TRADE--1.9% Cole National, Cl. A............. 205,000 2,767,500
Talbots.......................... 135,000 4,050,000
--------------
6,817,500
--------------
TECHNOLOGY--5.2% Aurora Electronics............... (a) 335,000 2,554,375
CIDCO............................ 65,000 1,121,250
Gerber Scientific................ 95,000 1,472,500
International Rectifier.......... (a) 175,000 2,625,000
Littelfuse....................... (a) 50,000 1,056,250
Maxim Integrated Products........ (a) 32,500 1,690,000
Medicus Systems.................. (a) 85,000 1,020,000
OneComm.......................... 75,000 1,556,250
Read-Rite........................ (a) 150,000 1,931,250
Scientific Software-Intercomp.... (a) 265,000 1,258,750
Sybase........................... (a) 25,000 1,225,000
Western Digital.................. (a) 75,000 956,250
--------------
18,466,875
--------------
TRANSPORTATION--2.4% Intertrans....................... 75,000 975,000
Kirby.......................... (a) 180,000 2,947,500
TNT Freightways.................. 90,000 2,070,000
Werner Enterprises............... 90,000 2,497,500
--------------
8,490,000
--------------
TOTAL COMMON STOCKS
(cost $266,104,016)............ $283,229,567
==============
PREFERRED STOCK--.2%
TECHNOLOGY; International Separations Systems,
Ser. A, 6%, Cum. Conv.
(cost $493,000)............ (a,d) 128,000 $ 493,000
==============
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1994 (UNAUDITED)
PRINCIPAL
SHORT-TERM INVESTMENTS--20.3% AMOUNT VALUE
-------------- --------------
U.S. TREASURY BILLS: 3.60%, 7/7/1994.................. $ 1,587,000 $ 1,586,047
3.50%, 7/14/1994................. 2,362,000 2,359,015
3.56%, 7/21/1994............... (c) 263,000 262,480
4.07%, 8/25/1994............... (c) 21,168,000 21,036,246
4.09%, 9/1/1994.................. 10,469,000 10,395,258
4.10%, 9/8/1994.................. 430,000 426,621
4.01%, 9/29/1994................. 36,369,000 36,004,400
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $72,070,067)............. $ 72,070,067
==============
TOTAL INVESTMENTS (cost $338,667,083)....................................... 100.4% $355,792,634
====== ==============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (.4%) $ (1,381,288)
====== ==============
NET ASSETS.................................................................. 100.0% $354,411,346
====== ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Investment in non-controlled affiliates (cost $4,415,197)_see Note
1(c).
(c) Partially held by broker as collateral for open short position.
(d) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate value of $1,700,691, represent
approximately .5% of net assets.
</TABLE>
<TABLE>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
- ------ ------------ ---------- --------------- ----------------
<S> <C> <C> <C> <C>
Genelabs Technologies............... 3/1/91 $9.00 .06% 10% discount
to market value
Individual Investor Group........... 12/15/93 3.25 .28 30% discount
to market value
International Separations System,
Ser. A, 6% Cum. Conv........... 7/12/93, 5/10/94 3.60, 4.75 .14 Cost
* The valuation of these securities has been determined in good faith
under the direction of the Board of Directors.
</TABLE>
<TABLE>
STATEMENT OF SECURITIES SOLD SHORT JUNE 30, 1994 (UNAUDITED)
COMMON STOCKS SHARES VALUE
- --------------- ----------- -----------
<S> <C> <C>
Seitel
(proceeds $1,191,310)................................................... 40,000 $1,135,000
===========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $338,667,083)_see statement..................................... $355,792,634
Cash.................................................................... 899,364
Receivable for investment securities sold............................... 6,044,213
Receivable from brokers for proceeds on securites sold short............ 1,191,310
Dividends and interest receivable....................................... 206,487
Receivable for subscriptions to Common Stock............................ 10,000
Prepaid expenses........................................................ 76,109
--------------
364,220,117
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 289,224
Payable for investment securities purchased............................. 8,124,320
Securities sold short, at value
(proceeds $1,191,310)_see statement................................... 1,135,000
Payable for Common Stock redeemed....................................... 31,658
Accrued expenses........................................................ 228,569 9,808,771
------------ --------------
NET ASSETS ................................................................ $354,411,346
==============
REPRESENTED BY:
Paid-in capital......................................................... $305,631,497
Accumulated undistributed investment income_net......................... 35,115
Accumulated undistributed net realized gain on investments.............. 31,562,873
Accumulated net unrealized appreciation on investments_Note 3(b)........ 17,181,861
--------------
NET ASSETS at value applicable to 10,757,041 outstanding shares of
Common Stock, equivalent to $32.95 per share
(100 million shares of $.01 par value authorized)....................... $354,411,346
==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends:
Unaffiliated issuers (net of $824 foreign taxes withheld at source) $ 1,226,934
Affiliated issuers................................................ 11,412 $ 1,238,346
-------------
Interest.............................................................. 1,029,056
-------------
TOTAL INCOME.................................................... 2,267,402
EXPENSES:
Management fee--Note 2(a)............................................. 1,335,795
Shareholder servicing costs_Note 2(b)................................. 725,060
Prospectus and shareholders' reports_Note 2(b)........................ 41,761
Professional fees..................................................... 38,956
Custodian fees........................................................ 29,063
Registration fees..................................................... 33,184
Directors' fees and expenses_Note 2(c)................................ 13,340
Miscellaneous......................................................... 5,498
-------------
2,222,657
Less_reimbursement of prospectus costs due to an undertaking and reduction
in expenses due to redemption fee_Note 2(b,d)..................... 86,740
-------------
TOTAL EXPENSES.................................................. 2,135,917
-------------
INVESTMENT INCOME--NET.......................................... 131,485
-------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments--Note 3(a):
Unaffiliated issuers.................................................. $23,053,950
Affiliated issuers.................................................... 46,344
-------------
NET REALIZED GAIN..................................................... 23,100,294
Net unrealized (depreciation) on investments and securities sold short:
Unaffiliated issuers.................................................. (35,865,269)
Affiliated issuers.................................................... (925,907) (36,791,176)
------------ --------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (13,690,882)
-------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(13,559,397)
=============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 1994
1993 (UNAUDITED)
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 549,763 $ 131,485
Net realized gain on investments....................................... 37,898,357 23,100,294
Net unrealized appreciation (depreciation) on investments for the period 5,748,297 (36,791,176)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...... 44,196,417 (13,559,397)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net............................................ (527,722) ---
In excess of investment income_net..................................... (96,370) ---
From net realized gain on investments.................................. (29,700,807) ---
-------------- --------------
TOTAL DIVIDENDS...................................................... (30,324,899) ---
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 131,623,999 99,648,565
Dividends reinvested................................................... 30,068,902 ---
Cost of shares redeemed................................................ (70,216,637) (70,644,332)
-------------- --------------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS............... 91,476,264 29,004,233
-------------- --------------
TOTAL INCREASE IN NET ASSETS..................................... 105,347,782 15,444,836
NET ASSETS:
Beginning of period.................................................... 233,618,728 338,966,510
-------------- --------------
End of period [including distributions in excess of investment income_net;
($96,370) in 1993 and undistributed investment income_net; $35,115 in 1994] $338,966,510 $354,411,346
============== ==============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 3,775,179 2,925,420
Shares issued for dividends reinvested................................. 909,723 ---
Shares redeemed........................................................ (2,014,715) (2,100,644)
-------------- --------------
NET INCREASE IN SHARES OUTSTANDING................................... 2,670,187 824,776
============== ==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
DREYFUS NEW LEADERS FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED
----------------------------------------------------------JUNE 30, 1994
PER SHARE DATA: 1989 1990 1991 1992 1993 (UNAUDITED)
------ ------ ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $23.41 $29.27 $24.25 $32.29 $32.17 $34.13
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income--net................. .35 .45 .23 .14 .07 .01
Net realized and unrealized gain (loss)
on investments....................... 6.98 (3.92) 10.78 2.81 5.30 (1.19)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS..... 7.33 (3.47) 11.01 2.95 5.37 (1.18)
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income--net.. (.34) (.48) (.23) (.14) (.07) --
Dividends in excess of investment income_net -- -- -- -- -- --
Dividends from net realized gain on investments (1.01) (1.07) (2.74) (2.93) (3.34) --
Dividends from paid-in capital......... (.12) -- -- -- -- --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS.................. (1.47) (1.55) (2.97) (3.07) (3.41) --
------ ------ ------ ------ ------ ------
Net asset value, end of period......... $29.27 $24.25 $32.29 $32.17 $34.13 $32.95
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 31.29% (11.85%) 45.39% 9.43% 17.07% (3.46%)*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.37% 1.42% 1.29% 1.21% 1.22% .59%*
Ratio of net investment income to average
net assets........................... 1.60% 1.31% .76% .43% .19% .04%*
Decrease in above expense ratios due to an
undertaking by the Manager and redemption fee -- -- .06% .04% .04% .02%*
Portfolio Turnover Rate................ 114.31% 129.11% 107.64% 119.45% 127.97% 55.12%*
Net Assets, end of period (000's Omitted) $195,971 $102,281 $194,007 $233,619 $338,967 $354,411
- ----------------
* Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the distributor of the Fund's shares,
which are sold to the public without a sales load. The Distributor is a
wholly-owned subsidiary of The Dreyfus Corporation ("Manager").
(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, except for open short positions, where
the asked price is used for valuation purposes. 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 Directors. Short-term investments are carried at amortized cost,
which approximates value. Investments denominated in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange.
(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) AFFILIATED ISSUERS: Issuers in which the Fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. This may result in distributions
that are in excess of investment income-net and net realized gain on a fiscal
year basis. 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.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings (which, in the
view of Stroock & Stroock & Lavan, counsel to the Fund, also contemplates
dividends on securities sold short), brokerage and extraordinary expenses,
exceed 1 1/2% of the average value of the Fund's net assets for any full
year. There was no expense reimbursement for the six months ended June 30,
1994.
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(B) The Fund has adopted a Service Plan (the "Plan") pursuant to which
the Fund pays the Distributor, at an annual rate of .25 of 1% of the value of
the Fund's average daily net assets, for costs and expenses in connection
with advertising, marketing and distributing the Fund's shares and for
servicing shareholder accounts. The Distributor may make payments to one or
more Service Agents (a securities dealer, financial institution, or other
industry professional) based on the value of the Fund's shares owned by
clients of the Service Agent. The Plan also separately provides for the Fund
to bear the costs of preparing, printing and distributing certain of the
Fund's prospectuses and statements of additional information and costs
associated with implementing and operating the Plan, not to exceed the
greater of $100,000 or .005 of 1% of the Fund's average daily net assets for
any full year. During the six months ended June 30, 1994, $470,502 was
charged to the Fund pursuant to the Plan, of which $25,237 was reimbursed by
the Manager.
(C) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each director
who is not an "affiliated person" receives an annual fee of $2,500 and an
attendance fee of $500 per meeting. Prior to April 4, 1994 the attendance fee
was $250.
(D) A 1% redemption fee is charged on certain redemptions of Fund shares
(including redemptions through use of the Exchange Privilege) where the
shares being redeemed were issued subsequent to a specified effective date
and the redemption or exchange occurs within a six-month period following the
date of issuance. During the six months ended June 30, 1994, redemption fees
amounted to $61,503.
(E) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of the Manager
with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number
of contingencies, including receipt of certain regulatory approvals and
approvals of the stockholders of the Manager and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's
shareholders before completion of the merger. Proxy materials, approved by
the Fund's Board, recently have been mailed to Fund shareholders.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and sales
of investment securities and securities sold short, excluding short-term
securities, during the six months ended June 30, 1994:
<TABLE>
PURCHASES SALES
---------------- ------------------
<S> <C> <C> <C>
Long transactions:
Unaffiliated issuers.................................. $164,340,143 $165,407,948
Affiliated issuers.................................... 809,735 383,193
---------------- ------------------
165,149,878 165,791,141
Short sale transactions................................. ----- 1,191,310
----------------- -----------------
Total................................................... $165,149,878 $166,982,451
================= ==================
</TABLE>
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at current market value. The
Fund would incur a loss if the price of the security increases between the
date of the short sale and the date on which the Fund replaces the borrowed
security. The Fund would realize a gain if the price of the security declines
between those dates. Until the Fund replaces the borrowed security, the Fund
will maintain daily, a segregated account with a broker and custodian, of
cash and/or U.S. Government securities sufficient to cover its short
position. The security sold short at June 30, 1994 and its related market
value and proceeds are set forth in the Statement of Securities Sold Short.
(B) At June 30, 1994, accumulated net unrealized appreciation on
investments was $17,181,861, consisting of $33,144,694 gross unrealized
appreciation and $15,962,833 gross unrealized depreciation.
At June 30, 1994, 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).
DREYFUS NEW LEADERS FUND, INC.
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS NEW LEADERS FUND, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus New Leaders Fund, Inc., including the statements of investments and
securities sold short, as of June 30, 1994, and the related statements of
operations and changes in net assets and financial highlights for the six
month period ended June 30, 1994. These financial statements and financial
highlights are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
December 31, 1993 and financial highlights for each of the five years in the
period ended December 31, 1993 and in our report dated February 2, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP Signature Logo)
New York, New York
August 5, 1994
(Dreyfus Logo)
New Leaders
Fund, Inc.
Semi-Annual
Report
June 30, 1994
(Dreyfus Lion Logo)
(Dreyfus `D' Logo)
DREYFUS NEW LEADERS
FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus,
which must precede or accompany this report.
Printed in U.S.A. 085SA946
Registration Mark
Dreyfus New Leaders Fund, Inc. June 30, 1994
Broad Sector Allocation Versus Benchmark
|-------------------------------------------------------|
|Cash Equivalents 19.9% |
|Technology & Capital Goods 18.1% |
|Credit Sensitive 15.1% |
|Healthcare 13.9% |
|Materials & Process 13.2% |
|Consumer 9.2% |
|Energy 8.2% |
|Transportation 2.4% |
| |
| Dreyfus New Leaders Fund* |
|-------------------------------------------------------|
Dreyfus New Leaders Fund, Inc. June 30, 1994
Broad Sector Allocation Versus Benchmark
|---------------------------------------------- |
|Credit Sensitive 24.7% |
|Consumer 21.6% |
|Technology & Capital Goods 18.2% |
|Materials & Process 14.9% |
|Healthcare 9.3% |
|Energy 5.7% |
|Transportation 5.4% |
|Other 0.2% |
| |
| Russell 2000 Index** |
|---------------------------------------------- |
