Letter to Shareholders
Dear Shareholder:
It is time to review the Dreyfus New Leaders Fund performance for the
year ended December 31, 1994. The period was turbulent as sectors of the
global equity markets cycled through many turns. In the domestic marketplace,
where New Leaders concentrates its holdings, industry groups rotated
dramatically as well. Yet, as you review the performance roster below, it will
seem as if all this were a tempest in a teapot.
Dreyfus
New NASDAQ Russell Wilshire S & P
Leaders* Composite 2000* 5000 500*
--------- --------- --------- --------- ---------
Year-to-Date
12/31/93-12/31/94 _.15% _3.20% _1.82% _2.52% +1.31%
Inception-to-Date
1/31/85 12/31/94 +278.44% +169.81% +163.22% +146.07% +255.01%
Sources: Lipper Analytical Services, Inc.; The Wall Street Journal; and The
Russell Company. The Wilshire 5000 Index, the Russell 2000(R) 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 +14.40%, +10.39% and _.15%
since inception on 1/29/85, and for the five- year and one-year periods ended
12/31/94, respectively.**
New Leaders beat its direct small company benchmark index, the Russell
2000, for the year with dividends reinvested. The Fund also outperformed the
NASDAQ Composite Index of Over-the-Counter Stocks for the same period. The
total return of this index was calculated without dividends reinvested. Out of
the indexes listed above, only the Standard & Poor's 500 Index, which is
comprised of large capitalization companies, offered positive results.
This reversed the pattern of superior small company stock performance that
began in late 1990 and persisted for each of the following three years. The
reason for the reversal may well have been the broad global economic growth
that developed in 1994. Investors could seek strength in sales and earnings
from larger companies, positioned as they are in many markets. Smaller
companies lost relative appeal, healthy as they might have been.
Furthermore, speculation in foreign markets attracted capital from
American investors. Historically, much of this flow might have stayed onshore
in order to invest in small companies. New Leaders remained focused on the
domestic market, but represented you internationally with positions in smaller
firms that, in many cases, create dominant products worldwide. In specialty
materials and capital goods, strong fundamental performers for the portfolio
included: Albany International,Cl.A, Bush Boake Allen, Cascade, Ferro, Flair,
Littelfuse, OM Group, Precision Castparts, Roper Industries and Schulman (A.).
Some of these investments have been built up over the years, so they may be
familiar holdings to you.
In the 1994 semi-annual letter to shareholders, we mentioned a heightened
interest in the technology sector. The idea was to add further emphasis to the
theme of seeking foreign growth through domestic manufacturers. CIDCO,
Glenayre Technologies and International Rectifier are among the smaller
companies the Fund holds with aggressive product offerings abroad.
Currently, we are clearly underweighted in consumer stocks. The Russell
2000 Index is 20% consumer-oriented, while New Leaders is about 10%. As a
result, performance did not suffer as much as it could have, as many industry
leaders saw their consumer stocks drop 30% or more in the past year. The
concern still exists that older American consumers became savers after the
spending of the 1980s. Faced with higher tax rates as well, the spender has
become elusive. Nonetheless, with consumer stocks out of favor, we are
refocusing on the area.
These sector weightings have, by and large, served the portfolio well, as
New Leaders has continued to receive Morningstar's four-star ranking as of
December 31, 1994.*** Out of a total of 243 funds in the small company
category, 16.5% have received 4 stars and 7.4% have received 5 stars. The Fund
inched out Lipper's Small Company Growth Fund Index for 1994: _0.15%* versus
_0.44% for the Index.**** From inception on 1/31/85, New Leaders has
appreciated +278.44% versus +178.94% for the same Index. Your Fund was also
listed in the December issue of Smart Money Magazine as one of the most
attractive U.S. equity funds to own for 1995.
These are pleasant items to look back upon, but we are focused on today's
work and tomorrow's opportunity. Our thanks again for your interest and loyalty.
Sincerely,
(Thomas A. Frank Signature Logo)
Thomas A. Frank
Portfolio Manager
February 14, 1995
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. Share price 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: Morningstar, Inc., December 31, 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.
**** 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 gain distributions as of the ex-dividend
dates. Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other agency. The net asset value of funds of this type will
fluctuate from time to time.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC. DECEMBER 31, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS NEW LEADERS
FUND, INC.
AND THE RUSSELL 2000Registration Mark INDEX
*Source: Lipper Analytical Services, Inc.
(Exhibit B)
AVERAGE ANNUAL TOTAL RETURNS
ONE YEAR ENDED FIVE YEARS ENDED FROM INCEPTION (1/29/85)
DECEMBER 31, 1994 DECEMBER 31, 1994 TO DECEMBER 31, 1994
--------------------- --------------------- ---------------------------
<S> <C> <C>
(.15%) 10.39% 14.40%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus New Leaders
Fund on 1/29/85 (Inception Date) to a $10,000 investment made in the Russell
2000Registration Mark 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 2000Registration Mark Index is an unmanaged index and is composed
of the 2,000 smallest companies in the Russell 3000Registration Mark Index.
The Russell 3000Registration Mark 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 reimbursements, if applicable, is contained in
the Condensed Financial Information section of the Prospectus and elsewhere
in this report.
<TABLE>
<CAPTION>
Dreyfus New Leaders Fund, Inc. December 31, 1994
Broad Sector Allocation Versus Benchmark
(Exhibit B)
Dreyfus New Leaders Fund* Russell 2000Registration Mark 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 2000Registration Mark Index is an unmanaged index and is
composed of the 2,000 smallest companies in the Russell 3000Registration Mark
Index. The Russell 3000Registration Mark Index is composed of 3,000 of the
largest U.S. companies by market capitalization.
Asset Allocation*
<S> <C> <C>
Common Stocks................................................... 85.5%
Preferred Stock................................................. 0.1
Cash Equivalents................................................ 14.4
-------
100.0%
Ten Largest Holdings*
Bush Boake Allen................................................ 1.8%
Canandaigua Wine, Cl. A......................................... 1.6
Ferro........................................................... 1.5
International Rectifier......................................... 1.4
Horizon Healthcare.............................................. 1.4
Schulman (A.)................................................... 1.3
Glenayre Technologies........................................... 1.3
CorVel.......................................................... 1.2
Scherer (R.P.).................................................. 1.2
Trident NGL Holdings............................................ 1.1
</TABLE>
*All percentages shown are based on Total Net Assets.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
COMMON STOCKS--85.5% SHARES VALUE
-------------- -------------
<S> <C> <C> <C>
CONSUMER
NON-DURABLE--6.6% Bush Boake Allen......................... 260,000 $ 7,020,000
Canandaigua Wine, Cl. A ............. (a) 165,000 6,270,000
Dr. Pepper/Seven-Up Cos.............. (a) 125,000 3,203,125
Eskimo Pie........................... (b) 185,000 3,468,750
IBP.................................. 90,000 2,722,500
Norton McNaughton...................... 200,000 3,050,000
--------------
25,734,375
--------------
CONSUMER SERVICES--1.3% Individual Investor Group............... (a,b,c) 307,692 874,999
Goldwyn (Samuel)..................... (a) 125,000 812,500
Hammons (John Q.) Hotels, Cl. A ....... 175,000 2,450,000
Savoy Pictures Entertainment......... (a) 150,000 975,000
--------------
5,112,499
--------------
ENERGY--8.7% Arakis Energy................... (a) 50,000 200,000
Cairn Energy USA..................... (a) 347,500 2,823,438
Coda Energy.......................... (a) 650,000 3,900,000
Dreco Energy Services, Cl. A....... (a,b) 430,000 3,278,750
Dual Drilling........................ (a) 300,000 2,550,000
Energy Ventures...................... (a) 70,000 848,750
Foreland............................. (a) 450,000 900,000
Global Industries.................... (a) 170,000 3,888,750
ICO.................................... 280,000 1,050,000
International Colin Energy........... (a) 500,000 3,437,500
Maverick Tube........................ (a) 175,000 1,618,750
Parker & Parsley Petroleum............. 165,000 3,382,500
Trident NGL Holdings................... 425,000 4,462,500
Unit................................. (a) 602,500 1,807,500
--------------
34,148,438
--------------
FINANCIAL--14.5% American Eagle Group................... 245,000 2,051,875
Baldwin & Lyons, Cl. B (non voting).... 275,000 4,056,250
Chittenden............................. 110,000 2,282,500
City National.......................... 66,000 701,250
Colonial BancGroup, Cl. A.............. 125,000 2,468,750
Commercial Net Lease Realty............ 90,000 1,102,500
Crescent Real Estate Equities.......... 150,000 4,068,750
Dime Bancorp......................... (a) 300,000 2,325,000
Equitable of Iowa...................... 135,000 3,813,750
Executive Risk......................... 230,000 3,277,500
FirstFed Michigan...................... 100,000 2,050,000
Fremont General........................ 150,000 3,506,250
Guaranty National...................... 135,000 2,480,625
Hibernia, Cl. A ....................... 375,000 2,906,250
Merchants Group........................ 109,500 1,656,188
Midland Financial Group................ 60,000 885,000
National Re............................ 123,500 3,241,875
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
FINANCIAL (CONTINUED) Presidential Life...................... 500,000 $ 2,625,000
Sizeler Property Investors............. 220,000 2,310,000
Synovus Financial...................... 150,000 2,718,750
Trenwick Group......................... 67,500 2,860,312
Wellsford Residential Property Trust... 75,000 1,575,000
Western National....................... 150,000 1,931,250
--------------
56,894,625
--------------
HEALTH CARE--13.6% Advantage Health........................ (a) 111,500 3,540,125
Apogee Enterprises..................... 125,000 2,187,500
Coastal Healthcare Group............. (a) 100,000 2,737,500
Community Psychiatric Centers.......... 300,000 3,300,000
Coram Healthcare..................... (a) 237,740 3,922,710
CorVel............................... (a) 170,000 4,717,500
Genesis Health Ventures.............. (a) 70,000 2,213,750
Homedco Group........................ (a) 80,000 3,010,000
Horizon Healthcare................... (a) 192,500 5,390,000
Lincare Holdings..................... (a) 95,000 2,755,000
National Health Laboratories Holdings.. 200,000 2,650,000
Noven Pharmaceuticals................ (a) 75,000 928,125
Physician Sales & Service.............. 125,000 1,984,375
Ramsay Health Care................... (a) 290,000 1,885,000
Scherer (R.P.)....................... (a) 100,000 4,537,500
Sterile Concepts Holdings.............. 220,000 3,520,000
Universal Health Services, Cl. B .... (a) 170,000 4,165,000
--------------
53,444,085
--------------
INDUSTRIAL SERVICES--2.0% CBI Industries....................... 100,000 2,562,500
EnSys Environmental Products......... (a) 250,000 1,000,000
Jacobs Engineering Group............. (a) 175,000 3,237,500
Kaiser Resources..................... (a) 164,500 1,028,125
--------------
7,828,125
--------------
NON-ENERGY MINERALS--2.2% Cleveland-Cliffs...................... 100,000 3,700,000
Huntco, Cl. A ......................... 120,000 2,640,000
IMCO Recycling......................... 157,500 2,382,188
--------------
8,722,188
--------------
PROCESS INDUSTRIES--10.4% Airgas................................ (a) 105,000 2,231,250
Albany International, Cl. A............ 225,000 4,331,250
Cominco Fertilizers.................... 110,000 2,491,084
Crompton & Knowles..................... 120,000 1,980,000
Cytec Industries..................... (a) 65,000 2,535,000
Ferro.................................. 250,000 5,968,750
Lilly Industries, Cl. A................ 135,000 1,890,000
Longview Fibre......................... 210,000 3,307,500
Mosinee Paper.......................... 135,000 3,493,125
OM Group............................... 150,000 3,600,000
Precision Castparts.................... 190,000 3,847,500
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
PROCESS INDUSTRIES (CONTINUED) Schulman (A.).......................... 190,000 $ 5,225,000
--------------
40,900,459
--------------
PRODUCER
MANUFACTURING--9.1% Applied Power, Cl. A .................... 150,000 3,806,250
BW/IP.................................. 190,000 3,253,750
Cascade................................ 105,000 2,493,750
Flair.................................. 182,500 3,467,500
Greenfield Industries.................. 100,000 2,400,000
Littelfuse........................... (a) 95,000 2,778,750
Manitowoc.............................. 135,000 2,919,375
Moorco International................... 190,000 2,802,500
Newcor................................. 117,000 877,500
Nordson................................ 50,000 3,000,000
Rohr Industries...................... (a) 350,000 3,631,250
Roper Industries....................... 165,000 4,166,250
--------------
35,596,875
--------------
RETAIL TRADE--2.4% Au Bon Pain, Cl. A ..................... (a) 275,000 4,400,000
Talbots................................ 135,000 4,218,750
Vons Cos............................. (a) 50,000 900,000
--------------
9,518,750
--------------
TECHNOLOGY--11.8% CIDCO.............................. 135,000 3,915,000
Gerber Scientific...................... 125,000 1,625,000
Glenayre Technologies................ (a) 90,000 5,197,500
Informix............................. (a) 125,000 4,015,625
IntelCom Group....................... (a) 142,000 1,881,500
International Rectifier.............. (a) 225,000 5,456,250
LSI Logic............................ (a) 60,000 2,422,500
Maxim Integrated Products............ (a) 65,000 2,275,000
Medicus Systems........................ 110,000 1,732,500
Sierra On-Line....................... (a) 77,500 2,654,375
Spectrum Holobyte.................... (a) 132,500 1,788,750
Stratus Computer..................... (a) 95,000 3,610,000
Sybase............................... (a) 75,000 3,900,000
Thermotrex........................... (a) 155,600 2,100,600
3Com................................. (a) 15,000 773,437
Xilinx............................... (a) 45,000 2,666,250
--------------
46,014,287
--------------
TRANSPORTATION--2.9% Kirby........................... (a) 180,000 3,555,000
TNT Freightways........................ 110,000 2,818,750
U.S. Delivery Systems.................. 125,000 1,718,750
Werner Enterprises..................... 130,000 3,087,500
--------------
11,180,000
--------------
TOTAL COMMON STOCKS
(cost $307,027,637).................. $335,094,706
===============
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
PREFERRED STOCKS--.1% SHARES VALUE
-------------- --------------
INDUSTRIAL SERVICES--.1%Separation Technologies,
Ser. A, 6%, Cum. Conv.
(cost $493,000).................. (a,c) 128,000 $ 493,000
===============
PRINCIPAL
SHORT-TERM INVESTMENTS--14.3% AMOUNT
--------------
U.S. TREASURY BILLS:
4.90%, 1/12/95 ........................ $ 1,558,000 $ 1,555,667
5.02%, 1/19/95......................... 8,038,000 8,017,825
5.08%, 1/26/95......................... 1,944,000 1,937,142
5.13%, 2/2/95.......................... 13,106,000 13,046,294
5.27%, 2/9/95.......................... 3,211,000 3,192,668
5.23%, 2/16/95......................... 805,000 799,620
5.38%, 3/16/95......................... 27,674,000 27,367,988
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $55,917,204)................... $ 55,917,204
===============
TOTAL INVESTMENTS (cost $363,437,841)...... 99.9% $391,504,910
===== =============
CASH AND RECEIVABLES (NET) ............................................ .1% $ 120,528
===== =============
NET ASSETS.................................................................. 100.0% $391,625,438
===== =============
</TABLE>
<TABLE>
<CAPTION>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Investment in non-controlled affiliates (cost $8,141,109)_see Note 1
(d).
(c) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $1,367,999, represents
approximately .3% of net assets.
ACQUISITON PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
- ------ ------------ ---------- --------------- ------------
<S> <C> <C> <C> <C>
Individual Investor Group............... 12/15/93 $3.25 .22% 30% discount
to market value
Separation Technologies,
Ser. A, 6% Cum. Conv. ......... 7/12/93, 5/10/94 3.60, 4.75 .13 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.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $363,437,841)_see statement..................................... $391,504,910
Cash.................................................................... 1,476,635
Receivable for investment securities sold............................... 5,980,443
Dividends and interest receivable....................................... 296,399
Receivable for subscriptions to Common Stock............................ 17,500
Prepaid expenses........................................................ 48,365
--------------
399,324,252
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 237,901
Due to Distributor...................................................... 81,673
Payable for investment securities purchased............................. 5,537,806
Payable for Common Stock redeemed....................................... 1,631,674
Accrued expenses........................................................ 209,760 7,698,814
------------ ------------
NET ASSETS ................................................................ $391,625,438
=============
REPRESENTED BY:
Paid-in capital......................................................... $362,679,169
Accumulated undistributed investment income_net......................... 131,224
Accumulated undistributed net realized gain on investments
and foreign currency transactions..................................... 748,265
Accumulated net unrealized appreciation on investments
and foreign currency transactions..................................... 28,066,780
--------------
NET ASSETS at value applicable to 12,498,767 shares outstanding
(100 million shares of $.01 par value Common Stock authorized).......... $391,625,438
=============
NET ASSET VALUE, offering and redemption price per share
($391,625,438 / 12,498,767 shares)...................................... $31.33
======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Cash dividends:
Unaffiliated issuers (net of $3,207 foreign taxes withheld at source) $ 2,803,004
Affiliated issuers................................................ 20,662 $2,823,666
--------------
Interest.............................................................. 2,629,366
--------------
TOTAL INCOME.................................................... 5,453,032
EXPENSES:
Management fee_Note 2(a).............................................. 2,798,513
Shareholder servicing costs_Note 2(b)................................. 1,459,622
Prospectus and shareholders' reports_Note 2(b)........................ 85,979
Registration fees..................................................... 64,863
Custodian fees........................................................ 61,604
Professional fees..................................................... 39,680
Directors' fees and expenses_Note 2(c)................................ 20,686
Miscellaneous......................................................... 8,253
--------------
4,539,200
Less_reimbursement of prospectus costs due to an undertaking
and reduction in expenses due to redemption fee_Note 2(b,d)....... 204,230
--------------
TOTAL EXPENSES.................................................. 4,334,970
--------------
INVESTMENT INCOME--NET.......................................... 1,118,062
--------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments and foreign currency
transactions_Note 3(a):
Long transactions:
Unaffiliated issuers............................................ $ 22,763,809
Affiliated issuers.............................................. 46,344
Short sale transactions........................................... 3,510
--------------
NET REALIZED GAIN................................................. 22,813,663
Net unrealized (depreciation) on investments, securities sold
short and foreign currency transactions:
Unaffiliated issuers.............................................. (25,164,245)
Affiliated issuers................................................ (742,012) (25,906,257)
-------------- -------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (3,092,594)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (1,974,532)
==============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
--------------------------------
1993 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 549,763 $ 1,118,062
Net realized gain on investments........................................ 37,898,357 22,813,663
Net unrealized appreciation (depreciation) on investments for the year.. 5,748,297 (25,906,257)
-------------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 44,196,417 (1,974,532)
-------------- -----------
DIVIDENDS TO SHAREHOLDERS:
From investment income_net.............................................. (527,722) (890,468)
In excess of investment income_net...................................... (96,370) --
From net realized gain on investments................................... (29,700,807) (30,527,977)
-------------- -----------
TOTAL DIVIDENDS....................................................... (30,324,899) (31,418,445)
-------------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 131,623,999 172,304,714
Dividends reinvested.................................................... 30,068,902 30,524,402
Cost of shares redeemed................................................. (70,216,637) (116,777,211)
-------------- -----------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................ 91,476,264 86,051,905
-------------- -----------
TOTAL INCREASE IN NET ASSETS...................................... 105,347,782 52,658,928
NET ASSETS:
Beginning of year....................................................... 233,618,728 338,966,510
-------------- -----------
End of year [including distributions in excess of investment income_net;
($96,370)
in 1993 and undistributed investment income_net; $131,224 in 1994].... $338,966,510 $391,625,438
============= ============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 3,775,179 5,091,995
Shares issued for dividends reinvested.................................. 909,723 984,236
Shares redeemed......................................................... (2,014,715) (3,509,729)
-------------- --------------
NET INCREASE IN SHARES OUTSTANDING.................................... 2,670,187 2,566,502
============= ============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
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 the Fund's financial statements.
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $29.27 $24.25 $32.29 $32.17 $34.13
------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net........................ .45 .23 .14 .07 .10
Net realized and unrealized gain (loss) on investments
and foreign currency transactions.......... (3.92) 10.78 2.81 5.30 (.22)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS........... (3.47) 11.01 2.95 5.37 (.12)
------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income_net......... (.48) (.23) (.14) (.07) (.08)
Dividends in excess of investment income_net. -- -- -- -- --
Dividends from net realized gain on investments (1.07) (2.74) (2.93) (3.34) (2.60)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS........................ (1.55) (2.97) (3.07) (3.41) (2.68)
------ ------ ------ ------ ------
Net asset value, end of year................. $24.25 $32.29 $32.17 $34.13 $31.33
====== ====== ======= ====== ======
TOTAL INVESTMENT RETURN (11.85%) 45.39% 9.43% 17.07% (.15%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.42% 1.29% 1.21% 1.22% 1.16%
Ratio of net investment income to average net assets 1.31% .76% .43% .19% .30%
Decrease in above expense ratios due to an undertaking
by the Manager and redemption fee.......... -- .06% .04% .04% .05%
Portfolio Turnover Rate...................... 129.11% 107.64% 119.45% 127.97% 94.21%
Net Assets, end of year (000's Omitted)...... $102,281 $194,007 $233,619 $338,967 $391,625
</TABLE>
See notes to financial statements.
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, until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold to the public without a sales load. Dreyfus Service
Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
(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) 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 market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
and maturities of short-term securities, sales of foreign currencies,
currency gains or losses realized on securities transactions, the difference
between the amounts 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.
(C) 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.
(D) AFFILIATED ISSUERS: Issuers in which the Fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act.
(E) 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.
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(F) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2--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,
1994.
(B) On August 4, 1994, Fund shareholders approved a revised Service Plan
(the "Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Plan,
effective August 24, 1994, the Fund (a) reimburses the Distributor for
payments to certain Service Agents for distributing the Fund's shares and
servicing shareholder accounts and (b) pays the Manager, Dreyfus Service
Corporation or any affiliate (collectively "Dreyfus") for advertising and
marketing relating to the Fund and servicing shareholder accounts, at an aggre
gate annual rate of .25 of 1% of the value of the Fund's average daily net
assets. Each of the Distributor and Dreyfus may pay Service Agents (a
securities dealer, financial institution or other industry professional) a
fee in respect of the Fund's shares owned by shareholders with whom the
Service Agent has a servicing relationship or for whom the Service Agent is
the dealer or holder of record. Each of the Distributor and Dreyfus determine
the amounts to be paid to Service Agents to which it will make payments and
the basis on which such payments are made. 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.
Prior to August 24, 1994, the Fund's Service Plan ("prior Service Plan")
provided that the Fund pay Dreyfus Service Corporation 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. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's shares owned by clients of the Service Agent. The prior Service
Plan also separately provided 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 prior Service 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, 1994, $368,767 was charged to the Fund
pursuant to the Plan of which $16,079 was waived by the Manager and $610,176
was charged to the Fund pursuant to the prior Service Plan of which $30,027
was waived by the Manager.
(C) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. 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.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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, 1994, redemption fees
amounted to $158,124.
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, 1994:
PURCHASES SALES
----------------------------------
<S> <C> <C>
Long transactions:
Unaffiliated issuers........................................... $333,552,195 $293,838,457
Affiliated issuers............................................. 1,247,815 383,193
----------------------------------
334,800,010 294,221,650
Short sale transactions.......................................... 1,187,800 1,191,310
----------------------------------
TOTAL...................................................... $335,987,810 $295,412,960
----------------------------------
----------------------------------
</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, 1994, there were no
securities sold short outstanding.
(B) At December 31, 1994, accumulated net unrealized appreciation on
investments was $28,067,069, consisting of $45,765,306 gross unrealized
appreciation and $17,698,237 gross unrealized depreciation, excluding foreign
currency transactions.
At December 31, 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.
REPORT OF ERNST & YOUNG LLP, 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, 1994, 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, 1994 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, 1994, 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.
(Logo Signature)
New York, New York
February 1, 1995
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $.530 per share as a
long-term capital gain distribution of the $.750 per share paid on September
1, 1994. The Fund also designates $.9950 per share as a long-term capital
gain distribution of the $1.930 per share paid on December 14, 1994.
DREYFUS NEW LEADERS
FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 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. 085AR9412
New Leaders
Fund, Inc.
Annual Report
December 31, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000
INVESTMENT IN DREYFUS NEW LEADERS FUND, INC.
AND THE RUSSELL 2000(R) INDEX
EXHIBIT A:
_________________________________________________________
| | | |
| | | DREYFUS |
| PERIOD | RUSSELL 2000(R) | NEW LEADERS |
| | INDEX * | FUND |
|--------- | ----------------- | ------------ |
| 1/29/85 | 10,000 | 10,000 |
|12/31/85 | 11,571 | 13,415 |
|12/31/86 | 12,228 | 15,093 |
|12/31/87 | 11,156 | 14,320 |
|12/31/88 | 13,932 | 17,663 |
|12/31/89 | 16,195 | 23,189 |
|12/31/90 | 13,035 | 20,440 |
|12/31/91 | 19,038 | 29,717 |
|12/31/92 | 22,543 | 32,519 |
|12/31/93 | 26,804 | 38,069 |
|12/31/94 | 26,322 | 38,012 |
|--------------------------------------------------------- |
*Source: Lipper Analytical Services, Inc.
Dreyfus New Leaders Fund, Inc.
Broad Sector Allocation Versus Benchmark
| ------------------------------------------------------ |
| Technology & Capital Goods 23% |
| Cash Equivalents 14% |
| Credit Sensitive 14% |
| Healthcare 14% |
| Materials & Process 13% |
| Consumer 10% |
| Energy 9% |
| Transportation 3% |
| |
| Dreyfus New Leaders Fund* |
| ------------------------------------------------------ |
Dreyfus New Leaders Fund, Inc.
Broad Sector Allocation Versus Benchmark
| --------------------------------------------- |
| Credit Sensitive 23% |
| Consumer 21% |
| Technology & Capital Goods 21% |
| Materials & Process 15% |
| Healthcare 10% |
| Energy 5% |
| Transportation 5% |
| |
| |
| Russell 2000(R) Index** |
| --------------------------------------------- |
