<PAGE>
PRESIDENT'S LETTER
DEAR FELLOW SHAREHOLDERS:
For the full fiscal year of 1993, Dreyfus New Leaders Fund
achieved a total return of +17.07%.* This compares to +14.75% for
the NASDAQ Composite Index and +18.91% for the Russell 2000 Index.
These are traditional measures of small company stock activity.
Although the Standard and Poor's 500 Composite Stock Price Index
is weighted heavily toward larger companies and the Wilshire 5000
Index consists of both larger and smaller companies, their
performance can serve as an interesting comparison to the other
indices over the long term.
<TABLE>
<CAPTION>
DREYFUS
NEW NASDAQ RUSSELL WILSHIRE S & P
LEADERS* COMPOSITE 2000* 5000 500*
-------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
YEAR-TO-DATE
12/31/92-12/31/93................. +17.07% +14.75% +18.91% +8.58% +10.06%
INCEPTION-TO-DATE+
1/31/85-12/31/93.................. +279.01% +178.72% +168.10% +152.42% +250.41%
</TABLE>
Sources: Lipper Analytical Services, Inc.; The Wall Street
Journal; The Russell Company; and The Wilshire 5000 Equity Index.
The Russell 2000 (R) Index, the Standard & Poor's 500 Composite
Stock Price Index, the Wilshire 5000 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 16.16%, 16.60%,
and 17.07% since inception on 1/29/85, and for the five-year and
one-year periods ended 12/31/93, respectively.**
Although your portfolio managers are never satisfied with past
performance, we are pleased to report that in December 1993,
Morningstar, Inc. awarded the Fund a "Four Star" rating for its
investment merit as a small company fund, blended with both growth
and value securities.*** As a further measure of long-term merit,
New Leaders has ranked well against the Lipper Small Company
Growth Fund Index,**** which gained +16.37% for 1993, and has
appreciated +186.92% since the inception of New Leaders.
In the past twelve months, small capitalization securities
continued their superior performance for the third consecutive
year. This would represent a halfway mark in the normal big
cap/small cap cycle measured over the last sixty years by Ibbotson
Associates. Although overall, the Standard & Poor's 500 valuation
levels continue to be a concern, small company analysis suggests
we have not reached relative historical extremes. Much of the
speculative fervor that, in earlier decades, might have entered
into the U.S. over-the-counter market seems to have funneled into
the emerging foreign markets.
The record amount of stock offerings in 1993 kept portfolio
managers supplied with as many new stock certificates as their
increasing demand could handle. As we are all aware, newly public
companies can provide exciting upside performance or extreme
disappointment. Nonetheless, the volume of new companies to see
and to analyze kept us busy all year long and caused us to believe
that we were about to be stuffed with too much of a good thing,
like a goose. So, we proceeded with caution.
Caution for New Leaders takes two basic forms: broad
diversification and cash equivalent holdings. The industrial
sector analysis of New Leaders during 1993 shows the persistent
themes we discussed in the June shareholder letter. We have
continued to reduce the financial service and consumer holdings
which had fared well. Our attitude remains that global inflation
may remain generally low, as supplies of labor and raw material
seem abundant. The most beneficial effects on interest rates in
the United States, however, may be behind us. Thus, our movement
continues away from interest rate-sensitive financial service
stocks. The
<PAGE>
domestic consumer, although healthy, appears more dedicated to
saving than spending, and has learned to bargain hunt, making it
difficult for the retailer to raise prices and enhance returns.
During the year, your Fund was featured in the "Heard on the
Street" column in The Wall Street Journal, as well as in The Wall
Street Transcript. The Sector Managers working on New Leaders who
were interviewed, urged readers to consider the capital goods and
technology sector, which was currently gaining strength at home,
and which was positioned well to sell product abroad when foreign
economies grew stronger. We wouldn't change a word, and are
significantly overweighted in what used to be called "rust belt"
companies.
In the fourth quarter of 1993, our performance was adversely
affected by our holdings in energy stocks. They had been fine
investments until October, when natural gas storage in the country
mounted and choked off what had been healthy business conditions.
Many of our best companies had their stock market valuation cut by
20-30%. We remain overweighted, however, because the price of
natural gas remains high enough to warrant very profitable
corporate operations and the recent record cold snap has depleted
storage dramatically.
Finally, our health care weighting was nearly doubled toward the
end of the year. Because of investor concerns regarding a national
health care program, many excellent opportunities existed in an
investment sector which had underperformed for eighteen months or
so. Our concentration has been on efficient hospital and physician
management companies, and firms that offer low-cost support
services to patients and to the industry itself.
As to the upcoming year, we expect that the local market will
again provide us with many new and exciting companies, open to
public view for the first time. And, even on a global scale, The
Dreyfus Corporation is developing foreign research relationships
which will provide in-depth, "on the ground" company coverage for
us to exploit. Small company investment managers are, by nature,
company-contact oriented, so you may be assured that we will
represent you well with a conservative approach.
As always, we thank you for your loyalty.
Sincerely,
/s/ Thomas A. Frank
---------------------
Thomas A. Frank
President
February 3, 1994
New York, N.Y.
*Total return represents the change during the period in a
hypothetical account with dividends reinvested.
**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 before investing.
***Source: Morningstar, Inc., December 31, 1993. 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. Ten percent of the
funds in an asset class receive five stars; 22.5% receive four
stars; 35% receive three stars; 22.5% receive two stars; and 10%
receive one star.
****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.
Dreyfus New Leaders Fund, Inc. December 31, 1993
Broad Sector Allocation Versus Benchmark
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.
Asset Allocation*
Common Stocks........................................... 87.1%
Preferred Stock......................................... 0.1
Convertible Bond........................................ 0.7
Cash Equivalents........................................ 12.1
------
100.0%
Ten Largest Equity Holdings**
Flair................................................... 1.8%
Huntco, Cl. A........................................... 1.6
Dr. Pepper/Seven-Up Cos................................. 1.5
Horizon Healthcare...................................... 1.5
Xilinx.................................................. 1.5
Coastal Healthcare Group................................ 1.5
Banco Latinoamericiano de Exportaciones, S.A., Cl. E.... 1.4
Equitable of Iowa Cos................................... 1.4
Baldwin & Lyons, Cl. B (non-voting)..................... 1.3
Kirby................................................... 1.3
*As a percentage of Total Net Assets.
DREYFUS NEW LEADERS FUND, INC. DECEMBER 31, 1993
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS NEW
LEADERS FUND, INC.
AND THE RUSSELL 2000(R) INDEX.
Past performance is not predictive of future performance.
The above illustration compares a $10,000 investment made in the Dreyfus
New Leaders Fund on 1/29/85 (Inception Date) to a $10,000 investment made
in the Russell 2000 Index on that date. For comparative purposes, the
value of the Index on 1/31/85 is used as the beginning value on 1/29/85.
All dividends and capital gain distributions are reinvested.
The Fund's performance takes into account all applicable fees and
expenses.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. The Index does not take into account charges, fees and
other expenses. Further information relating to Fund performance,
including expense reimbursement, if applicable, is contained in the
Condensed Financial Information section of the Prospectus and elsewhere
in this report.
*Source: The Russell Company
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1993
COMMON STOCKS--87.1%
<TABLE>
<CAPTION>
SHARES VALUE
----------- ------------
<S> <C> <C>
BANKING--5.6% Banco Latinoamericano de
Exportaciones, S.A., Cl. E.... 105,500 $ 4,787,063
Chittenden..................... 95,000 1,757,500
City National..................(a) 210,000 1,575,000
Colonial BancGroup, Cl. A...... 70,000 1,312,500
Commerce Bancshares............ 35,000 997,500
Deposit Guaranty............... 50,000 1,400,000
First Source................... 41,500 996,000
First Tennessee National....... 25,000 962,500
ONBANCorp...................... 95,000 3,336,875
Synovus Financial.............. 90,000 1,676,250
------------
18,801,188
------------
BASIC MATERIALS--3.1% Amcast Industrial.............. 75,000 1,584,375
Birmingham Steel............... 115,000 3,191,250
Cleveland-Cliffs............... 60,000 2,242,500
OM Group....................... 175,000 3,609,375
------------
10,627,500
------------
CAPITAL GOODS--12.0% ABC Rail Products.............. 57,500 855,313
Albany International, Cl. A.... 165,000 3,155,625
Applied Power, Cl. A........... 119,000 1,933,750
Cascade........................ 100,000 1,950,000
Clark Equipment................(a) 35,000 1,833,125
Danaher........................ 105,000 4,003,125
Flair..........................(b) 291,000 5,965,500
Gerber Scientific.............. 95,000 1,318,125
Greenfield Industries.......... 127,500 2,645,625
Huntco, Cl. A.................. 125,000 5,265,625
Johnstown America Industries... 80,200 1,964,900
Kaydon......................... 100,000 2,075,000
Moorco International........... 90,000 1,710,000
Newcor......................... 100,000 1,012,500
Rexnord........................(a) 125,000 2,781,250
Stimsonite..................... 45,000 483,750
Wheatley TXT................... 150,000 1,706,250
------------
40,659,463
------------
CONSUMER--6.8% Canandaigua Wine, Cl. A........(a) 125,000 3,937,500
Dr. Pepper/Seven-Up Cos........ 210,000 5,040,000
EZ Communications, Cl. A....... 106,000 1,669,500
Eskimo Pie..................... 55,000 983,125
IBP............................ 135,000 3,493,125
Individual Investor Group......(a,b,d) 307,692 1,103,845
Mohawk Industries..............(a) 50,000 1,712,500
Mueller Industries.............(a) 60,000 2,130,000
Saga Communications, Cl. A..... 90,000 1,541,250
Standard Motor Products........ 58,700 1,548,212
------------
23,159,057
------------
</TABLE>
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
----------- ------------
<S> <C> <C>
ENGINEERING & CONSTRUCTION--1.2% CBI Industries............. 65,000 $ 1,974,375
Granite Construction....... 85,000 2,125,000
------------
4,099,375
------------
ENTERTAINMENT--2.9% Boyd Gaming................ 115,000 1,538,125
Goldwyn (Samuel)...........(a) 75,000 834,375
RHI Entertainment..........(a) 175,000 4,178,125
Savoy Pictures 150,000 3,150,000
Entertainment..............
------------
9,700,625
------------
ENVIRONMENTAL--.7% Ensys Environmental 102,500 820,000
Products...................
Omega Environmental........(a) 150,000 1,537,500
------------
2,357,500
------------
ENVIRONMENTAL PRODUCTS/SERVICES-- IMCO Recycling.............(a) 150,000 1,800,000
2.0%
Kaiser Resources...........(a) 139,500 2,441,250
Western Water..............(a) 110,000 2,392,500
------------
6,633,750
------------
HEALTH SERVICES--10.2% American Healthcare 183,000 1,669,875
Management.................(a)
Charter Medical............(a) 150,000 3,881,250
Coastal Healthcare Group...(a) 125,000 4,968,750
Community Psychiatric 215,000 3,010,000
Centers....................
GMIS.......................(a) 72,500 1,232,500
Genesis Health Ventures... (a) 130,000 3,055,000
Horizon Healthcare.........(a) 250,000 5,031,250
Medicus Systems............(a) 135,000 2,497,500
Pacific Physician Services.(a) 135,000 3,510,000
PhyCor.....................(a) 110,000 3,162,500
Regency Health Services....(a) 7,500 105,938
Universal Health Services, 125,000 2,562,500
Cl. B......................(a)
------------
34,687,063
------------
INSURANCE--7.5% Argonaut Group............. 75,000 2,287,500
Baldwin & Lyons, Cl. B 275,000 4,468,750
(non-voting)...............
CMAC Investment............ 50,000 1,387,500
Capital Guaranty........... 100,000 1,950,000
Citation Insurance Group...(a) 195,000 1,852,500
Equitable of Iowa Cos...... 137,500 4,657,813
Guaranty National.......... 112,500 1,968,750
Merchants Group............ 110,000 1,732,500
Midland Financial Group....(a) 36,000 729,000
Re Capital................. 75,000 993,750
Trenwick Group............. 86,500 3,384,313
------------
25,412,376
------------
</TABLE>
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
SHARES VALUE
----------- ------------
<S> <C> <C>
MEDICAL EQUIPMENT--1.6% i-STAT.......................(a) 90,000 $ 1,192,500
Perseptive Biosystems........(a) 95,000 2,731,250
Wilshire Technologies........(a) 115,000 1,624,375
------------
5,548,125
------------
MERCHANDISING--2.8% Au Bon Pain, Cl. A...........(a) 35,000 796,250
Books-A-Million..............(a) 40,000 870,000
Consolidated Stores..........(a) 50,000 993,750
Staples......................(a) 75,000 1,912,500
Talbots...................... 24,000 636,000
Williams-Sonoma..............(a) 100,000 4,125,000
------------
9,333,500
------------
OIL & GAS PRODUCERS--4.4% Cairn Energy U.S.A........... 275,000 1,443,750
Coda Energy..................(a) 450,000 2,418,750
Conwest Exploration.......... 47,700 761,625
International Colin Energy...(a) 174,100 2,219,775
Parallel Petroleum...........(a) 572,500 1,681,718
Parker & Parsley Petroleum... 145,000 3,588,750
Trident NGL Holdings......... 250,000 2,937,500
------------
15,051,868
------------
OIL & GAS SERVICES--4.1% Dual Drilling................ 250,000 2,531,250
ICO..........................(a) 270,000 2,025,000
Noble Drilling...............(a) 200,000 1,750,000
Offshore Logistics...........(a) 100,000 1,375,000
Unit.........................(a) 457,500 1,258,125
Weatherford International....(a) 123,000 1,306,875
Western Gas Resources........ 115,000 3,766,250
------------
14,012,500
------------
PHARMACEUTICALS--2.6% Advanced Tissue Sciences.....(a) 150,000 1,237,500
Alpha 1 Biomedicals..........(a) 52,500 761,250
Cephalon.....................(a) 150,000 2,456,250
Genelabs Technologies........(a,d) 111,111 418,750
Genetic Therapy..............(a) 50,000 812,500
Magainin Pharmaceuticals.....(a) 35,000 481,250
Noven Pharmaceuticals........(a) 150,000 2,118,750
Vical........................ 35,000 472,500
------------
8,758,750
------------
REAL ESTATE--2.8% Commercial Net Lease Realty.. 90,000 1,237,500
Federal Realty Investment 50,000 1,250,000
Trust S.B.I..................
Sizeler Property Investors... 220,000 2,530,000
United Dominion Realty Trust. 125,000 1,781,250
Wellsford Residential 97,500 2,522,812
Property Trust...............
------------
9,321,562
------------
</TABLE>
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
----------- ------------
<S> <C> <C>
SPECIALTY CHEMICALS--4.3% Advanced Materials Group..... 115,000 $ 445,625
Airgas.......................(a) 190,000 4,132,500
Crompton & Knowles........... 135,000 2,970,000
Ecolab....................... 60,000 2,700,000
Geon......................... 95,000 2,244,375
Lilly Industries, Cl. A...... 90,000 2,160,000
------------
14,652,500
------------
TECHNOLOGY--7.5% Aurora Electronics...........(a,b) 335,000 2,847,500
BroadBand Technologies....... 70,000 2,222,500
Littelfuse...................(a) 75,000 1,912,500
MRS Technology............... 70,000 910,000
Maxim Integrated Products....(a) 50,000 2,393,750
Noise Cancellation 150,000 440,625
Technologies.................(a)
Read-Rite....................(a) 75,000 1,125,000
Sybase.......................(a) 85,000 3,570,000
Symantec.....................(a) 150,000 2,737,500
Western Digital..............(a) 250,000 2,281,250
Xilinx.......................(a) 105,000 5,013,750
------------
25,454,375
------------
TELECOMMUNICATIONS--1.2% CenCall Communications....... 85,000 2,380,000
United International 50,000 1,712,500
Holdings, Cl. A .............
------------
4,092,500
------------
TRANSPORTATION--3.8% Illinois Central, Ser. A..... 50,000 1,793,750
Kirby........................(a) 200,000 4,275,000
Swift Transportation.........(a) 75,000 1,612,500
TNT Freightways.............. 135,000 3,645,000
Werner Enterprises........... 50,000 1,525,000
------------
12,851,250
------------
TOTAL COMMON STOCKS
(cost $241,935,540)......... $295,214,827
============
</TABLE>
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
PREFERRED STOCK--.1%
<TABLE>
<CAPTION>
SHARES VALUE
----------- ------------
<S> <C> <C>
TECHNOLOGY--.1% International Separations
Systems,
Ser. A., 6.00%, Cum. Conv.
(cost $360,000)...........(d) 100,000 $ 360,000
============
CONVERTIBLE BOND--.7%
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
ENTERTAINMENT--.7% RHI Entertainment, 6.50%,
6/1/2003
(cost $1,850,000).........(c)$ 1,850,000 $ 2,543,750
============
SHORT-TERM INVESTMENTS--11.2%
U.S. TREASURY BILLS--11.2% 2.95%, 1/6/1994 ........... $ 73,000 $ 72,970
3.058%, 1/20/1994.......... 11,390,000 11,371,620
3.03%, 2/3/1994............ 255,000 254,292
3.107%, 2/10/1994.......... 5,640,000 5,620,530
3.085%, 2/17/1994.......... 4,360,000 4,342,438
3.10%, 2/24/1994........... 5,846,000 5,818,816
3.057%, 3/3/1994........... 6,810,000 6,774,722
3.034%, 3/10/1994.......... 1,629,000 1,619,663
3.025%, 3/17/1994.......... 2,073,000 2,059,938
------------
TOTAL SHORT-TERM
INVESTMENTS
(cost $37,934,989)........ $ 37,934,989
============
TOTAL INVESTMENTS (cost $282,080,529)............................ 99.1% $336,053,566
=========== ============
CASH AND RECEIVABLES (NET)....................................... .9% $ 2,912,944
=========== ============
NET ASSETS....................................................... 100.0% $338,966,510
=========== ============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Investment in non-controlled affiliates (cost $9,693,443)--see Note
1(c).
(c) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At
December 31, 1993, this security amounted to $2,543,750 or .7% of net
assets.
(d) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $1,882,595, represent
approximately .6% of net assets:
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
- ------ ----------- -------- ------------- ----------
<S> <C> <C> <C> <C>
Genelabs
Technologies 3/1/91 $9.00 .12% 10% discount to market value
Individual
Investor
Group 12/15/93 3.25 .33 30% discount to market value
International
Separations
System, Ser.
A, 6.00%,
Cum. Conv. 7/12/93 3.60 .11 Cost
</TABLE>
- -------
*The valuation of these securities has been determined in good faith
under the direction of the Board of Directors.
See notes to financial statements.
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1993
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $282,080,529)--see statement.................. $336,053,566
Cash................................................. 1,702,708
Receivable for investment securities sold............ 6,276,216
Dividends and interest receivable.................... 218,626
Receivable for subscriptions to Common Stock......... 5,250
Prepaid expenses..................................... 73,844
------------
344,330,210
LIABILITIES:
Due to The Dreyfus Corporation....................... $ 252,669
Payable for investment securities purchased.......... 4,890,338
Payable for Common Stock redeemed.................... 28,103
Accrued expenses..................................... 192,590 5,363,700
---------- ------------
NET ASSETS............................................ $338,966,510
============
REPRESENTED BY:
Paid-in capital...................................... $276,627,264
Accumulated distributions in excess of investment
income--net......................................... (96,370)
Accumulated undistributed net realized gain on
investments......................................... 8,462,579
Accumulated net unrealized appreciation on
investments--Note 3(b).............................. 53,973,037
------------
NET ASSETS at value applicable to 9,932,265 shares
outstanding
(100 million shares of $.01 par value Common Stock
authorized).......................................... $338,966,510
============
NET ASSET VALUE, offering and redemption price per
share $34.13
($338,966,510 / 9,932,265 shares).................... ======
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1993
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends (net of $3,171 foreign taxes withheld
at source).......................................... $ 2,534,015
Interest............................................. 1,455,414
-----------
TOTAL INCOME....................................... $ 3,989,429
EXPENSES:
Management fee--Note 2(a)............................ 2,115,726
Shareholder servicing costs--Note 2(b)............... 1,126,956
Prospectus and shareholders' reports--Note 2(b)...... 92,536
Professional fees.................................... 66,082
Custodian fees....................................... 65,027
Registration fees.................................... 48,173
Directors' fees and expenses--Note 2(c).............. 22,458
Dividends on securities sold short................... 2,500
Miscellaneous........................................ 8,387
-----------
3,547,845
Less--reduction in prospectus costs due to an
undertaking and reduction in
expenses due to redemption fee--Note 2(b,d)......... 108,179
-----------
TOTAL EXPENSES..................................... 3,439,666
-----------
INVESTMENT INCOME--NET............................. 549,763
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) on investments--Note 3(a):
Long transactions:
Unaffiliated issuers................................ $39,802,715
Affiliated issuers.................................. (547,550)
Short sale transactions.............................. (1,356,808)
-----------
NET REALIZED GAIN.................................... 37,898,357
Net unrealized appreciation (depreciation) on
investments and securities sold short:
Unaffiliated issuers................................ 6,062,969
Affiliated issuers.................................. (314,672) 5,748,297
----------- -----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS.... 43,646,654
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $44,196,417
===========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1992 1993
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income--net........................... $ 890,231 $ 549,763
Net realized gain on investments................. 19,808,335 37,898,357
Net unrealized appreciation (depreciation) on
investments for the year........................ (3,111,100) 5,748,297
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... 17,587,466 44,196,417
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net........................... (918,484) (527,722)
Excess investment income--net.................... -- (96,370)
Net realized gain on investments................. (19,222,562) (29,700,807)
------------ ------------
TOTAL DIVIDENDS.................................. (20,141,046) (30,324,899)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.................... 85,166,972 131,623,999
Dividends reinvested............................. 19,641,440 30,068,902
Cost of shares redeemed.......................... (62,642,986) (70,216,637)
------------ ------------
INCREASE IN NET ASSETS FROM CAPITAL STOCK
TRANSACTIONS.................................... 42,165,426 91,476,264
------------ ------------
TOTAL INCREASE IN NET ASSETS.................... 39,611,846 105,347,782
NET ASSETS:
Beginning of year................................ 194,006,882 233,618,728
------------ ------------
End of year [including distributions in excess of
investment income--net:
($124,598) in 1992 and $(96,370) in 1993]....... $233,618,728 $338,966,510
============ ============
<CAPTION>
SHARES SHARES
------------ ------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold...................................... 2,584,629 3,775,179
Shares issued for dividends reinvested........... 629,292 909,723
Shares redeemed.................................. (1,960,218) (2,014,715)
------------ ------------
NET INCREASE IN SHARES OUTSTANDING............... 1,253,703 2,670,187
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
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 year indicated. This
information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA: 1989 1990 1991 1992 1993
------ ------ ------ ------ ------
Net asset value, beginning
of year................... $23.41 $29.27 $24.25 $32.29 $32.17
-------- -------- -------- -------- --------
INVESTMENT OPERATIONS:
Investment income--net..... .35 .45 .23 .14 .07
Net realized and unrealized
gain (loss) on
investments............... 6.98 (3.92) 10.78 2.81 5.30
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS................ 7.33 (3.47) 11.01 2.95 5.37
-------- -------- -------- -------- --------
DISTRIBUTIONS:
Dividends from investment
income--net............... (.34) (.48) (.23) (.14) (.07)
Excess dividends from
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
year...................... $29.27 $24.25 $32.29 $32.17 $34.13
======== ======== ======== ======== ========
<CAPTION>
<S> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN 31.29% (11.85%) 45.39% 9.43% 17.07%
<CAPTION>
<S> <C> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets........ 1.37% 1.42% 1.29% 1.21% 1.22%
Ratio of net investment
income to average net
assets.................... 1.60% 1.31% .76% .43% .19%
Decrease in above expense
ratios due to an
undertaking by the Manager
and redemption fee........ -- -- .06% .04% .04%
Portfolio Turnover Rate.... 114.31% 129.11% 107.64% 119.45% 127.97%
Net Asset, end of year
(000's Omitted)........... $195,971 $102,281 $194,007 $233,619 $338,967
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
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 traded 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.
Dividends in excess of investment income--net for financial statement
purposes result from Federal income tax distribution requirements.
During the year ended 1993, the Fund reclassified $102,557 from
undistributed investment income to paid-in capital and net assets were
not affected by the change.
(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 provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income taxes.
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
year ended December 31, 1993.
(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 year
ended December 31, 1993, $769,455 was charged to the Fund pursuant to the
Plan, of which $32,867 was waived pursuant to an undertaking 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 $250 per meeting.
(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 year ended December 31,
1993, redemption fees amounted to $75,312.
(E) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger 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 the receipt of certain regulatory
approvals and the approvals of the stockholders of the Manager and of
Mellon. The merger is expected to occur in mid-1994, but could occur
later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with the Manager under the Investment Company Act of
1940, and thus a termination of such Agreement, the Manager will seek
prior approval from the Fund's Board and shareholders.
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 year ended December 31, 1993:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Long transactions:
Unaffiliated issuers.............................. $366,227,267 $309,696,582
Affiliated issuers................................ 1,006,752 136,850
------------ ------------
367,234,019 309,833,432
Short sale transactions............................ 5,721,016 3,085,458
------------ ------------
Total............................................ $372,955,035 $312,918,890
============ ============
</TABLE>
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. At December
31, 1993, there were no securities sold short outstanding.
(B) At December 31, 1993, accumulated net unrealized appreciation on
investments was $53,973,037, consisting of $60,243,340 gross unrealized
appreciation and $6,270,303 gross unrealized depreciation.
At December 31, 1993, 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).
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS NEW LEADERS FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus New Leaders Fund, Inc., including the statement of investments,
as of December 31, 1993, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights for each of
the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1993 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus New Leaders Fund, Inc. at December 31, 1993, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
/s/ ERNST & YOUNG
New York, New York
February 2, 1994
<PAGE>
DREYFUS NEW LEADERS FUND, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal Tax purposes the Fund hereby designates $1.94 per share as
a long-term capital gain distribution of the $3.30 per share paid on
December 13, 1993.
<PAGE>
[DREYFUS LION LOGO]
DREYFUS NEW LEADERS
FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
DISTRIBUTOR
Dreyfus Service 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. 085AR9312
[DREYFUS LION LOGO]
New Leaders
Fund, Inc.
Annual Report
December 31, 1993
COMPARISON OF CHANGE IN VALUE OF $10,000
INVESTMENT IN DREYFUS NEW LEADERS FUND, INC.
AND THE RUSSELL 2000 INDEX
EXHIBIT A:
________________________________________________
| | | |
| | | DREYFUS |
| PERIOD | RUSSELL 2000 | NEW LEADERS |
| | INDEX * | FUND |
| --------- | --------------- | ------------ |
| 1/29/85 | 10,000 | 10,000 |
| 3/31/85 | 10,058 | 10,207 |
| 6/30/85 | 10,414 | 11,141 |
| 9/30/85 | 9,961 | 11,237 |
| 12/31/85 | 11,571 | 13,415 |
| 3/31/86 | 13,209 | 16,612 |
| 6/30/86 | 13,850 | 17,813 |
| 9/30/86 | 12,154 | 14,752 |
| 12/31/86 | 12,229 | 15,093 |
| 3/31/87 | 15,202 | 18,331 |
| 6/30/87 | 15,094 | 18,747 |
| 9/30/87 | 15,726 | 19,966 |
| 12/31/87 | 11,156 | 14,320 |
| 3/31/88 | 13,284 | 16,472 |
| 6/30/88 | 14,160 | 18,064 |
| 9/30/88 | 14,026 | 17,795 |
| 12/31/88 | 13,934 | 17,663 |
| 3/31/89 | 15,007 | 18,832 |
| 6/30/89 | 15,962 | 20,484 |
| 9/30/89 | 17,040 | 22,559 |
| 12/31/89 | 16,197 | 23,189 |
| 3/31/90 | 15,839 | 22,223 |
| 6/30/90 | 16,450 | 23,831 |
| 9/30/90 | 12,413 | 19,846 |
| 12/31/90 | 13,037 | 20,440 |
| 3/31/91 | 16,914 | 24,275 |
| 6/30/91 | 16,652 | 24,621 |
| 9/30/91 | 18,010 | 27,175 |
| 12/31/91 | 19,041 | 29,717 |
| 3/31/92 | 20,469 | 30,527 |
| 6/30/92 | 19,073 | 28,365 |
| 9/30/92 | 19,619 | 29,451 |
| 12/31/92 | 22,547 | 32,519 |
| 3/31/93 | 23,511 | 34,086 |
| 6/30/93 | 24,024 | 34,177 |
| 9/30/93 | 26,124 | 38,154 |
| 12/31/93 | 26,810 | 38,069 |
| |
| ---------------------------------------------------------|
| DREYFUS NEW LEADERS FUND |
| ---------------------------------------------------------|
| AVERAGE ANNUAL TOTAL RETURNS ENDED ON 12/31/93 |
| |
| ---------------------------------------------------------|
| | | SINCE INCEPTION |
| 1 YEAR | 5 YEAR | (1/29/85) |
| ---------------------------------------------------------|
| 17.07% | 16.60% | 16.16% |
| ---------------------------------------------------------|
Dreyfus New Leaders Fund, Inc. December 31, 1993
Broad Sector Allocation Versus Benchmark
Dreyfus New Leaders Fund
---------------------------------------------------------
| Technology/Capital Goods 24.7% |
| Credit Sensitive 15.9 |
| Healthcare 14.4 |
| Consumer 13.2 |
| Cash Equivalents 12.1 |
| Energy 8.5 |
| Material & Process 7.4 |
| Transportation 3.8 |
| ---------------------------------------------------------|
Dreyfus New Leaders Fund, Inc. December 31, 1993
Broad Sector Allocation Versus Benchmark
Russell 2000 Index
| ---------------------------------------------------------|
| Credit Sensitive 23.9% |
| Technology/Capital Goods 20.4 |
| Consumer 19.6 |
| Healthcare 13.5 |
| Material & Process 11.0 |
| Transportation 5.0 |
| Energy 4.2 |
| Other 2.4 |
| ---------------------------------------------------------|
