DREYFUS NEW LEADERS FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance results for Dreyfus New Leaders
Fund, Inc. for the fiscal year ended December 31, 1995 and for the period
from the Fund's inception to December 31, 1995, as shown in the following
table:
<TABLE>
<CAPTION>
DREYFUS
NEW RUSSELL S&P
LEADERS* 2000* 500*
______ ______ ______
<S> <C> <C> <C>
Year-To-Date
12/31/94-12/31/95............ + 29.80% + 28.44% + 37.53%
Inception-To-Date+
1/31/85-12/31/95............. +391.21 +238.08 +388.26
</TABLE>
Sources: Lipper Analytical Services, Inc. and The Russell Company. The Russell
2000Registration Mark Index and The Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500 Index") 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 Fund is 1/29/85.
The Fund's average annual total returns were 29.80%, 19.23% and 13.89%
for the one-year, five-year and ten-year periods ended December 31, 1995.**
We are grateful that on the basis of this record, the Fund continued to be
awarded Morningstar's Four Star Overall Rating. The Four Star Overall Rating
reflects the Fund's risk-adjusted performance history among 1,394 equity
funds as of December 31, 1995.***
The year 1995 can only be characterized as a terrific year in the equity
markets. Small-capitalization stocks, which are of course the feature of the
Fund, had dramatic returns as well. It should not be surprising, however,
that in this environment the small company universe represented by the
Russell 2000 Index underperformed the more widely followed S&P 500. This
represented the second year in a row of underperformance for small stocks.
The fundamentals of smaller companies in the U.S. are sound; however,
investors in a hurry to deploy huge sums of money quickly in a bull market
are using larger capitalization stocks as their investment vehicles. These
companies are generally the large U.S.- based multinationals that benefit
from the weakened dollar. The valuation gap is intriguingly wide between the
firms in which we like to invest and the so-called "nifty fifty" stocks that
have been leading the market. This valuation gap has produced a fertile
climate in which to seek out relative and real values among small cap stocks.
Your Fund participates in the global investment theme by seeking out
small companies with large foreign sales, whose products hold a dominant
worldwide position. In this vein, we continue to hold OM Group, a cobalt
refiner and metallurgist, and Bush Boake Allen, a multinational specialized
flavors and fragrances company. We have accumulated positions in Keystone
International, a manufacturer of valves; Stewart & Stevenson Services, a
packager of industrial gas turbine systems; Titan Wheel, a producer of
agricultural equipment wheels; and Cambrex, which sells bulk actives to the
pharmaceutical industry worldwide. With an eye toward global markets, a major
theme continues to be commercial aerospace, where the suppliers to the
largest U.S. export company, Boeing, are small cap firms. The Fund continues
to own Rohr Industries and Precision Castparts, and has recently added
Thiokol and Crane Co.
Capital good stocks have outperformed consumer stocks for the past two
years. Your Fund has benefited from this development. The low value of the
U.S. dollar, coupled with increases in American productivity, should extend
this trend. Although we continue to underweight the consumer sector, there
are some notable exceptions. We have substantial positions in Tiffany & Co.,
Jones Apparel Group, Tootsie Roll Industries, Canandaigua Wine, Cl.A, Warnaco
Group, Cl.A and Meredith, which is a less recognized but powerful publisher
and broadcaster. We have high confidence in the fundamentals and management
teams of these firms.
As was widely reported, the technology sector propelled the market for
the first three quarters of 1995. You may remember that we indicated in our
last shareholder letter that, if this sector continued its unsustainable
advance, we would reduce our weighting. We did just that. The remaining
technology holdings, in our opinion, represent niche companies at what we
believe to be bargain prices. These include: Security Dynamics Technologies,
a maker of security identification cards for remote access; Aspect
Telecommunication, a producer of call processing equipment; and Auspex
Systems, a manufacturer of network file servers for the movement and storage
of data. We deployed the proceeds from our technology sales into the health
care industry. We view health care as exhibiting many of the same exciting
growth characteristics as technology stocks, but with more compelling
valuations. The two largest holdings in the Fund are Mentor, a plastic
surgery products company, and Guidant, a manufacturer of cardiology
equipment.
As we peer into 1996, we want to assure our shareholders that we will
only invest in stocks of companies we believe in and management teams we
trust.
We again thank you for your interest and loyalty.
Sincerely,
[Thomas A. Frank signature logo]
Thomas A. Frank
Portfolio Manager
January 24, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**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, 1995. 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. 10% of funds in an investment category receive 5 stars;
22.5% receive 4 stars.
DREYFUS NEW LEADERS FUND, INC. DECEMBER 31, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS NEW LEADERS
FUND, INC. AND THE RUSSELL 2000 INDEX
[Exhibit A
Dollars
$49,340
Dreyfus
New Leaders Fund
$33,840
Russell 2000 Index*
*Source: Lipper Analytical Services, Inc.]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
<S> <C> <C> <C>
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED FROM INCEPTION (1/29/85)
DECEMBER 31, 1995 DECEMBER 31, 1995 DECEMBER 31, 1995 TO DECEMBER 31, 1995
___________ ___________ ___________ _____________
29.80% 19.23% 13.89% 15.72%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus New Leaders
Fund, Inc. 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 shown in the line graph 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 reimbursements, if applicable, is contained in the Financial
Highlights section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1995
COMMON STOCKS-91.9% SHARES VALUE
_______ _______
<S> <C> <C>
CONSUMER-15.8%. Boise Cascade Office Products........... 170,000 $ 7,267,500
Bush Boake Allen.....................(a) 112,500 3,079,687
Canandaigua Wine, Cl. A..............(a) 190,000 6,198,750
Consolidated Stores..................(a) 195,000 4,241,250
Eskimo Pie............................. 116,500 2,126,125
Grand Casinos........................(a) 75,000 1,743,750
Individual Investor Group..........(a,d) 307,692 1,765,383
Jones Apparel Group..................(a) 215,000 8,465,625
Mentor................................. 650,000 14,950,000
Meredith............................... 200,000 8,375,000
Norton McNaughton....................(a) 225,000 2,503,125
Pepsi-Cola Puerto Rico Bottling, Cl. B. 135,000 1,552,500
Sola International..................... 150,000 3,787,500
Spectrum HoloByte....................(a) 140,000 910,000
Station Casinos......................(a) 405,000 5,923,125
Stein Mart...........................(a) 150,000 1,650,000
Talbots................................ 190,000 5,462,500
Tiffany & Co........................... 135,000 6,800,625
Tootsie Roll Industries................ 125,000 4,953,125
Warnaco Group, Cl. A................... 175,000 4,375,000
_______
96,130,570
_______
ENERGY-7.0%................. Cairn Energy USA....................... 467,500 6,545,000
Coda Energy..........................(a) 650,000 4,834,375
Dreco Energy Services, Cl. A.........(b) 377,500 6,700,625
Dual Drilling........................(a) 225,000 2,559,375
Enron Oil & Gas........................ 255,000 6,120,000
Falcon Drilling........................ 190,000 2,850,000
Foreland.............................(a) 245,000 382,813
Global Industries....................(a) 170,000 5,100,000
Parker & Parsley Petroleum............. 195,000 4,290,000
Unit.................................(a) 602,500 2,861,875
_______
42,244,063
_______
FINANCIAL SERVICES-19.7%..........ACE.................................... 300,000 11,925,000
Charter One Financial.................. 162,000 4,961,250
Chittenden............................. 225,000 7,200,000
Colonial BancGroup..................... 100,000 3,225,000
Crescent Real Estate Equities.......... 105,000 3,583,125
Dime Bancorp.........................(a) 175,000 2,034,375
Duff & Phelps Credit Rating............ 75,000 1,078,125
Executive Risk......................... 215,000 6,235,000
FINOVA Group........................... 175,000 8,443,750
Frontier Insurance Group............... 175,000 5,600,000
Greenpoint Financial................... 215,000 5,751,250
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
FINANCIAL SERVICES (CONTINUED)
Guaranty National...................... 175,000 $ 2,690,625
Hibernia, Cl. A........................ 450,000 4,837,500
Midland Financial Group................ 215,000 2,606,875
National Re............................ 175,000 6,650,000
Presidential Life...................... 375,000 3,703,125
Prudential Reinsurance Holdings........ 270,000 6,311,250
Reliance Group Holdings................ 987,500 8,517,187
Sizeler Property Investors............. 220,000 1,952,500
Standard Federal Bancorporation........ 200,000 7,875,000
Trenwick Group......................... 50,000 2,812,500
USLIFE................................. 187,500 5,601,563
Western National....................... 375,000 6,046,875
_______
119,641,875
_______
HEALTH CARE-8.0%... AmeriSource Health, Cl. A.............. 125,000 4,125,000
Apria Healthcare Group...............(a) 100,000 2,825,000
Ballard Medical Products............... 54,000 965,250
Circon...............................(a) 200,000 4,050,000
CorVel...............................(a) 170,000 6,481,250
Guidant................................ 305,000 12,886,250
HBO & Co............................... 60,000 4,597,500
Quantum Health Resources.............(a) 130,000 1,275,625
Sterile Concepts Holdings.............. 275,000 3,987,500
Trex Medical.........................(c) 50,000 512,500
Universal Health Services, Cl. B.....(a) 150,000 6,656,250
_______
48,362,125
_______
MATERIALS &
PROCESSING-12.9%.................Amax Gold............................(a) 700,000
5,075,000
BJ Services..........................(a) 150,000 4,350,000
Cambrex................................ 130,000 5,378,750
Crane.................................. 150,000 5,531,250
Ferro.................................. 137,500 3,196,875
Hardinge............................... 135,000 3,510,000
IMCO Recycling......................... 157,500 3,858,750
International Specialty Products....... 250,000 2,718,750
Jacobs Engineering Group.............(a) 175,000 4,375,000
Lilly Industries, Cl. A................ 160,000 2,040,000
Longview Fibre......................... 275,000 4,468,750
Minerals Technologies.................. 200,000 7,300,000
OM Group............................... 160,000 5,300,000
Santa Fe Pacific Gold.................. 500,000 6,062,500
Schulman (A.).......................... 185,000 4,162,500
Sterling Chemicals...................(a) 455,000 3,696,875
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
MATERIALS &
PROCESSING (CONTINUED).... USA Waste Services...................(a) 250,000 $ 4,718,750
Uniroyal Chemical...................... 295,000 2,433,750
_______
78,177,500
_______
PRODUCER DURABLES-11.2% Albany International, Cl. A............ 300,000 5,437,500
Applied Power, Cl. A................... 150,000 4,500,000
BW/IP.................................. 205,000 3,382,500
Huntco, Cl. A.......................... 100,000 1,537,500
IRO AB...............................(c) 250,000 2,820,397
Keystone International................. 250,000 5,000,000
Manitowoc.............................. 150,000 4,593,750
Maverick Tube........................(a) 175,000 1,356,250
Precision Castparts.................... 195,000 7,751,250
Rohr Industries......................(a) 500,000 7,187,500
Roper Industries....................... 127,500 4,685,625
Stewart & Stevenson Services........... 200,000 5,050,000
Titan Wheel International.............. 262,500 4,265,625
Watts Industries, Cl. A................ 200,000 4,650,000
Wolverine Tube.......................(a) 155,000 5,812,500
_______
68,030,397
_______
TECHNOLOGY-17.3%.... Align-Rite International............... 70,000 805,000
Aspect Telecommunication.............(a) 205,000 6,867,500
Auspex Systems.......................(a) 425,000 7,756,250
FTP Software.........................(a) 181,500 5,263,500
Franklin Electronic Publishing.......(a) 135,000 3,982,500
Gerber Scientific...................... 150,000 2,437,500
Glenayre Technologies................(a) 25,000 1,556,250
IDX Systems............................ 221,000 7,679,750
Inso.................................(a) 105,000 4,462,500
InStent................................ 20,000 300,000
Intuit...............................(a) 125,000 9,750,000
Lexmark International Group, Cl. A..... 275,000 5,018,750
MEMC Electronic Materials.............. 205,500 6,704,437
Madge Networks, N.V. ................(a) 140,000 6,265,000
Security Dynamics Technologies.......(a) 145,000 7,902,500
Sierra On-Line.......................(a) 225,000 6,468,750
Softkey International................(a) 75,000 1,734,375
StrataCom............................(a) 60,000 4,410,000
Thermotrex...........................(a) 150,000 7,500,000
Thiokol................................ 170,000 5,758,750
Veeco Instruments....................(a) 170,000 2,465,000
_______
105,088,312
_______
TOTAL COMMON STOCKS
(cost $447,853,351).................. $557,674,842
=======
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1995
PREFERRED STOCKS-.5% SHARES VALUE
_______ _______
INDUSTRIAL SERVICES-.3% Separation Technologies,
Ser. A, 6%, Cum. Conv. ............ (a,b,d) 243,385 $ 1,582,003
TECHNOLOGY-.2%.............. Crystal Dynamics..................... (a,d) 180,000 1,350,000
_______
TOTAL PREFERRED STOCKS
(cost $2,593,000).................. $ 2,932,003
=======
PRINCIPAL
SHORT-TERM INVESTMENTS-5.6% AMOUNT
_______
U.S. TREASURY BILLS:..5.27%, 1/11/96....................... $ 141,000 $ 140,779
5.33%, 1/25/96....................... (e) 7,848,000 7,822,729
5.27%, 2/29/96....................... 200,000 198,412
5.17%, 3/7/96........................ (e) 24,406,000 24,181,465
4.89%, 3/14/96....................... 1,772,000 1,753,837
_______
TOTAL SHORT-TERM INVESTMENTS
(cost $34,088,255)................. $ 34,097,222
=======
TOTAL INVESTMENTS (cost $484,534,606) ................................... 98.0% $594,704,067
==== =======
CASH AND RECEIVABLES (NET) .......................................... 2.0% $ 12,240,920
==== =======
NET ASSETS................................................................ 100.0% $606,944,987
==== =======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Investment in non-controlled affiliates (cost $4,510,398)-see Note 1
(c) Securities exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration normally to qualified institutional buyers. At
December 31, 1995, these securities amounted to $3,332,897 or .5% of net
assets.
(d) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $4,697,386, represents
approximately .77% of net assets.
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
___ ______ _____ ___________ _______
<S> <C> <C> <C> <C>
Crystal Dynamics....................... 7/10/95 $7.50 .22% $7.50
Individual Investor Group.............. 12/15/93 3.25 .29 10% discount
to market value
Separation Technologies,
Ser. A, 6%, Cum. Conv. ............ 7/12/93 3.60 .26 $6.50
5/10/94 4.75
1/13/95 6.50
*The valuation of these securities has been determined in good faith
under the direction of the Board of Directors.
(e) Partially held by brokers and custodian as collateral for open short
positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF SECURITIES SOLD SHORT DECEMBER 31, 1995
COMMON STOCK SHARES VALUE
_________ _____ _____
<S> <C> <C>
Seitel (proceeds $716,046).................................................. 28,000 $990,500
=====
See notes to financial statements.
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1995
ASSETS:
Investments in securities, at value
(cost $484,534,606)-see statement..................................... $594,704,067
Cash.................................................................... 6,376,580
Receivable for investment securities sold............................... 16,107,558
Receivable from brokers for proceeds on securities sold short........... 716,046
Dividends and interest receivable....................................... 384,484
Receivable for subscriptions to Common Stock............................ 136,181
Prepaid expenses and other assets....................................... 57,615
______-
618,482,531
LIABILITIES:
Due to The Dreyfus Corporation and subsidiaries......................... $ 478,799
Due to Distributor...................................................... 25,216
Payable for Common Stock redeemed....................................... 6,926,760
Payable for investment securities purchased............................. 2,836,011
Securities sold short, at value
(proceeds $716,046)-see statement..................................... 990,500
Accrued expenses........................................................ 280,258 11,537,544
______ _____-
NET ASSETS ................................................................ $606,944,987
=======
REPRESENTED BY:
Paid-in capital......................................................... $496,067,478
Accumulated distributions in excess of investment income-net............ (71,892)
Accumulated undistributed net realized gain on investments
and foreign currency transactions..................................... 1,054,394
Accumulated net unrealized appreciation on investments
and foreign currency transactions..................................... 109,895,007
_______
NET ASSETS at value applicable to 16,233,040 shares outstanding
(100 million shares of $.01 par value Common Stock authorized).......... $606,944,987
=======
NET ASSET VALUE, offering and redemption price per share
($606,944,987 / 16,233,040 shares)...................................... $37.39
=======
See notes to financial statements.
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1995
INVESTMENT INCOME:
INCOME:
Cash dividends:
Unaffiliated issuers.............................................. $ 4,008,174
Affiliated issuers................................................ 40,975 $ 4,049,149
______
Interest.............................................................. 2,717,378
_______
TOTAL INCOME.................................................... 6,766,527
EXPENSES:
Management fee-Note 2(a).............................................. 3,734,387
Shareholder servicing costs-Note 2(b)................................. 1,855,080
Prospectus and shareholders' reports-Note 2(b)........................ 119,649
Registration fees..................................................... 87,280
Custodian fees........................................................ 80,024
Professional fees..................................................... 77,921
Directors' fees and expenses-Note 2(c)................................ 46,570
Miscellaneous......................................................... 7,727
______
TOTAL EXPENSES.................................................. 6,008,638
Less-reimbursement of prospectus costs due to an undertaking
and reduction in expenses due to redemption fee-Note 2(b,d)....... 80,748
______
NET EXPENSES.................................................... 5,927,890
_______
INVESTMENT INCOME-NET........................................... 838,637
_______
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) on investments and foreign currency
transactions-Note 3(a):
Long transactions:
Unaffiliated issuers.............................................. $45,937,713
Affiliated issuers................................................ 867,811
Short sale transactions............................................... (178,107)
______
NET REALIZED GAIN..................................................... 46,627,417
Net unrealized appreciation on investments, securities sold
short and foreign currency transactions:
Unaffiliated issuers.............................................. 77,537,387
Affiliated issuers................................................ 4,290,840 81,828,227
______ _______
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 128,455,644
_______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $129,294,281
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
__________________________________
1994 1995
_______ ______
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 1,118,062 $ 838,637
Net realized gain on investments........................................ 22,813,663 46,627,417
Net unrealized appreciation (depreciation) on investments for the year.. (25,906,257) 81,828,227
_______ ______
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... (1,974,532) 129,294,281
_______ ______
DIVIDENDS TO SHAREHOLDERS:
From investment income-net.............................................. (890,468) (969,861)
In excess of investment income-net...................................... _- (71,892)
From net realized gain on investments................................... (30,527,977) (46,321,288)
_______ ______
TOTAL DIVIDENDS....................................................... (31,418,445) (47,363,041)
_______ ______
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 172,304,714 208,486,040
Dividends reinvested.................................................... 30,524,402 46,258,284
Cost of shares redeemed................................................. (116,777,211) (121,356,015)
_______ ______
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................ 86,051,905 133,388,309
_______ ______
TOTAL INCREASE IN NET ASSETS...................................... 52,658,928 215,319,549
NET ASSETS:
Beginning of year....................................................... 338,966,510 391,625,438
_______ ______
End of year [including undistributed investment income-net; $131,224
in 1994 and distributions in excess of investment income-net; ($71,892)
in 1995]................................................................ $ 391,625,438 $ 606,944,987
======= ======
SHARES SHARES
_______ ______
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 5,091,995 5,863,111
Shares issued for dividends reinvested.................................. 984,236 1,274,764
Shares redeemed......................................................... (3,509,729) (3,403,602)
_______ ______
NET INCREASE IN SHARES OUTSTANDING.................................... 2,566,502 3,734,273
======= ======
See notes to financial statements.
</TABLE>
<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: 1991 1992 1993 1994 1995
___ ___ ___ ___ ___
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $24.25 $32.29 $32.17 $34.13 $31.33
___ ___ ___ ___ ___
INVESTMENT OPERATIONS:
Investment income-net........................ .23 .14 .07 .10 .06
Net realized and unrealized gain (loss)
on investments............................. 10.78 2.81 5.30 (.22) 9.17
___ ___ ___ ___ ___
TOTAL FROM INVESTMENT OPERATIONS........... 11.01 2.95 5.37 (.12) 9.23
___ ___ ___ ___ ___
DISTRIBUTIONS:
Dividends from investment income-net......... (.23) (.14) (.07) (.08) (.07)
Dividends in excess of investment income-net. .- .- .- .- .-
Dividends from net realized gain on investments (2.74) (2.93) (3.34) (2.60) (3.10)
___ ___ ___ ___ ___
TOTAL DISTRIBUTIONS........................ (2.97) (3.07) (3.41) (2.68) (3.17)
___ ___ ___ ___ ___
Net asset value, end of year................. $32.29 $32.17 $34.13 $31.33 $37.39
=== === === === ===
TOTAL INVESTMENT RETURN.......................... 45.39% 9.43% 17.07% (.15%) 29.80%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.29% 1.21% 1.22% 1.16% 1.19%
Ratio of net investment income to average
net assets................................. .76% .43% .19% .30% .17%
Decrease in above expense ratios due to an
undertaking by the Manager and
redemption fee............................. .06% .04% .04% .05% .02%
Portfolio Turnover Rate...................... 107.64% 119.45% 127.97% 94.21% 108.80%
Net Assets, end of year (000's Omitted)...... $194,007 $233,619 $338,967 $391,625 $606,945
See notes to financial statements.
</TABLE>
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. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares, which are sold to the public without a sales load. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
(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. 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.
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. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(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
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
(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 and interest accrued on securities sold short), brokerage and
extraordinary expenses, exceed 11\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, 1995.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of the Manager, under a transfer agency agreement
for providing personnel and facilities to perform transfer agency services
for the Fund. Such compensation amounted to $30,482, for the period from
December 1, 1995 through December 31, 1995.
(B) Under the Shareholder Services Plan, effective June 23, 1995, 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 servicing shareholder accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquires regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the period from June 23, 1995
through December 31, 1995, the Fund was charged $736,326 pursuant to the
Shareholder Services Plan.
Prior to June 23, 1995, the Service Plan (the "Plan") pursuant to Rule
12b-1 under the Act, provided for the Fund to (a) reimburse the Distributor
for payments to certain Service Agents for distributing the Fund's shares and
servicing shareholder accounts ("Servicing") and (b) pay the Manager, Dreyfus
Service Corporation, a wholly-owned subsidiary of the Manager, or any
affiliate (collectively "Dreyfus") for advertising and marketing relating to
the Fund and for Servicing, at an aggregate annual rate of .25 of 1% of the
value of the Fund's average daily net assets. Each of the Distributor and
Dreyfus may have paid Service Agents (a securities dealer, financial
institution of other industry professional) a fee in respect of the Fund's
shares owned by shareholders with whom the Service Agent had a Servicing
relationship or for whom the Service Agent was the dealer or holder of
record. Each of the Distributor and Dreyfus determined the amounts to be paid
to Service Agents to which it made payments and the basis on which such
payments were made. The 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 Plan, not to exceed the greater of
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
$100,000 or .005 of 1% of the Fund's average daily net assets for any full
year. During the period from January 1, 1995 through June 22, 1995, $520,821
was charged to the Fund pursuant to the Plan of which $11,245 was waived by
the Manager. Effective June 23, 1995, the Plan was terminated.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% of such compensation.
(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, 1995, redemption fees
amounted to $69,503.
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, 1995:
<TABLE>
<CAPTION>
PURCHASES SALES
_________ ________
<S> <C> <C>
Long transactions:
Unaffiliated issuers........................................... $580,776,039 $483,602,558
Affiliated issuers............................................. 4,885,083 5,912,643
_________ ________
585,661,122 489,515,201
Short sale transactions.......................................... 6,225,372 6,763,311
_________ ________
TOTAL...................................................... $591,886,494 $496,278,512
========= ========
</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. Securities sold short at December 31, 1995 and their
related market values and proceeds are set forth in the Statement of
Securities Sold Short.
(B) At December 31, 1995, accumulated net unrealized appreciation on
investments was $109,895,007, consisting of $124,664,475 gross unrealized
appreciation and $14,769,468 gross unrealized depreciation.
At December 31, 1995, 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 statements of investments and
securities sold short, as of December 31, 1995, 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, 1995 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, 1995, 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.
[Ernst and Young LLP signature logo]
New York, New York
February 9, 1996
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $1.305 per share as a
long-term capital gain distribution of the $3.05 per share paid on December
20, 1995.
[Dreyfus lion "d" logo]
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
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 085AR9512
[Dreyfus logo]
New Leaders
Fund, Inc.
Annual Report
December 31, 1995
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 |
|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 |
|12/31/95 | 33,840 | 49,340 |
|------------------------------------------------------- |
*Source: Lipper Analytical Services, Inc.
