July 11, 1995
DREYFUS NEW LEADERS FUND, INC.
Supplement to Prospectus
Dated June 23, 1995
The following information supplements the information contained in the
section of the Fund's Prospectus entitled "Description of the Fund -
Management Policies":
The Fund also may invest in convertible securities, including
convertible preferred stock.
085/s071195
July 11, 1995
DREYFUS NEW LEADERS FUND, INC.
Supplement to the Statement of
Additional Information
Dated June 23, 1995
The following information supplements the
information contained in the section of the Fund's Statement of Additional
Information entitled "Investment Objective and Management Policies":
Convertible Securities. A convertible security is a fixed-income
security that may be converted at either a stated price or stated rate into
underlying shares of common stock. Convertible securities have general
characteristics similar to both fixed-income and equity securities.
Although to a lesser extent than with fixed-income securities generally,
the market value of convertible securities tends to decline as interest
rates increase and, conversely, tends to increase as interest rates
decline. In addition, because of the conversion feature, the market value
of convertible securities tends to vary with fluctuations in the market
value of the underlying common stock, and therefore, also will react to
variations in the general market for equity securities. A unique feature
of convertible securities is that, as the market price of the underlying
common stock declines, convertible securities tend to trade increasingly on
a yield basis, and so may not experience market value declines to the same
extent as the underlying common stock. When the market price of the
underlying common stock increases, the prices of the convertible securities
tend to rise as a reflection of the value of the underlying common stock.
While no securities investments are without risk, investments in
convertible securities generally entail less risk than investments in
common stock of the same issuer.
As fixed-income securities, convertible securities are
investments that often provide for a stable stream of income with generally
higher yields than common stocks. Of course, like all fixed-income
securities, there can be no assurance of current income because the issuers
of the convertible securities may default on their obligations.
Convertible securities, however, generally offer lower interest or dividend
yields than non-convertible securities of similar quality because of the
potential for capital appreciation. A convertible security, in addition to
providing fixed income, offers the potential for capital appreciation
through the conversion feature, which enables the holder to benefit from
increases in the market price of the underlying common stock. There can be
no assurance of capital appreciation, however, because securities prices
fluctuate.
Convertible securities generally are subordinated to other
similar but non-convertible securities of the same issuer, although
convertible bonds, as corporate debt obligations, enjoy seniority in right
of payment to all equity securities, and convertible preferred stock is
senior to common stock, of the same issuer. Because of the subordination
feature, however, convertible securities typically have lower ratings than
similar non-convertible securities.
