DREYFUS NEW LEADERS FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
The Dreyfus New Leaders Fund completed its latest semi-annual reporting
period ended June 30, 1997. For these six months, your Fund produced a total
return of 9.79%,* compared with a total return of 10.20% for the Russell 2000
Index of small cap stocks over the same period.**
ECONOMIC REVIEW
Since ending its 1995 mid-cycle slowdown, the economy has sustained an
above-trend growth trajectory, slowing only briefly in the third quarter of
1996 and again in recent months. Meanwhile, the level of economic activity is
now at the point where economic resources are near full deployment. Yet price
inflation remains quiescent, boosting the purchasing power of incomes and
contributing to the best sense of economic well-being in decades. In this
environment, economic policy has been benign, allowing market interest rates
to sway within an 18-month trading range and corporate profits to rise
steadily. However, even while the jury is out on the inflation risks ahead,
the Federal Reserve Board (the "Fed") has again indicated a one-way bias
towards tighter future policy.
Real Gross Domestic Product grew an above-trend 3.1% from year-end 1995
to year-end 1996, then accelerating to more than 4.0% in the first half of
this year. However, this year's pattern shows growth concentrated into the
first quarter, when GDP surged 5.9%, while a slowdown to near 2.5% is
apparent in the second quarter. The slower near-term growth is attributable
to a lackluster retail sector, even though exports and capital spending are
gaining. A key issue is whether the absence of pent-up demand could lead to a
sluggish consumer profile and, hence, a slow GDP growth from here on. Indeed,
factors that could underpin a resumption of stronger spending are rising:
real consumer purchasing power, soaring household wealth and all-time highs
in consumer confidence. Additionally, inventories remain lean, muting the
prospect of yet slower economic growth.
Alongside evidence of a slower retail sector in the second quarter are
reports showing that unemployment fell below 5% and industrial capacity
utilization tightened towards its 1994 highs. With these developments, the
economy now is operating at a high level with little slack. Yet wage
inflation abated in the second quarter while price inflation continued to
decelerate. The absence of any troublesome sign of inflation has kept market
interest rates in a long-standing trading range. Even corporate profits
continue to surprise on the upside.
Views on the need to tighten monetary policy are divergent. There are
those who believe that inflation pressure points are just different than in
the past and others who believe the inflation cycle has been eliminated by
global factors and technology. However, by leaning towards tighter future
policy, the Fed is at least willing to err on the cautious side in the next
several months.
MARKET OVERVIEW
All major stock market indexes set new records repeatedly during the
half-year. However, it wasn't clear sailing, and not all sectors profited
equally. As recently as April, just after the Fed voted its latest increase
in interest rates, broad stock averages were only modestly ahead for the
year. Technology and small cap stocks were lagging the larger, better-known
issues.
A turnaround began in mid-April that carried all markets to new highs.
The main propellant was the expanding yet noninflationary economy. At the
same time, corporate profits, generally speaking, showed continued strength.
Clearly, all the hard work of corporate reorganization and down-sizing in
recent years was paying off. Before each scheduled meeting of the Federal
Reserve, there was apprehension that interest rates might be boosted again.
Yet the underlying tone of the market was one of confidence and strength. No
doubt the steady influx of retirement money and other assets into mutual
funds was an important factor in the market's buoyancy.
As the market averages advanced, an increasing number of warnings were
being issued to the investing public to remember that what goes up might come
down _ that many stocks appeared richly priced in relation to earnings
prospects. In day-to-day stock trading, however, there was little evidence by
the end of June that the cautionary advice was affecting stock prices.
PORTFOLIO FOCUS
The first six months of 1997 were a tale of two cities. The strong
performance of small capitalization stocks in the last two months of this
period more than made up for a very poor beginning. The S&P 500 continues to
receive the lion's share of investment dollars, and that fact widened the
performance spread between large capitalization companies and the smaller cap
firms which are the focus of your Fund. Although the current folklore is that
a global economy benefits primarily multinational behemoths, this concept,
although true, has been exaggerated. In fact, we believe our smaller, more
focused companies also compete effectively in the global arena. As investors
continue to neglect smaller, well-managed companies in favor of more S&P
500-type firms, our menu of investment opportunities expands.
We are pleased to report that the Financial Services sector was the best
performing sector for the Russell 2000 Index and for your Fund during this
period. Our biggest winner was property and casualty insurer Frontier
Insurance Group. Other significant contributors to performance in this
segment were Everest Reinsurance Holdings and Executive Risk, an underwriter
of liability insurance. This segment was such a strong one for your Fund that
there were no losing positions.
The Capital Goods segment was the second best contributor to performance.
Thiokol, which is a commercial aerospace supplier to Boeing, provided the
same boost to performance in this period that it did for the previous
six-month period. Valve manufacturer, Keystone International, was acquired at
a substantial premium by industrial conglomerate Tyco International during
this period. Crane was another winner by virtue of its aerospace exposure.
Underperformers were ice machine and crane manufacturer Manitowoc and paper
machinery and mining equipment manufacturer, Harnischfeger Industries.
Specialty chemical companies Crompton & Knowles, Cambrex, and OM Group were
the prime drivers for the respectable performance gains posted by the
Materials & Processing sector. There were no major underperformers in this
segment. We remain sanguine on both of these cyclical segments because we
anticipate that they will show good earnings results in the current strong
economy.
Investing in Healthcare companies proved to be very frustrating for us
this period. We were overweighted in the group in general, but strong
selections seemed to be offset by underperformers. STERIS, which manufactures
sterile processing systems, had an earnings shortfall that temporarily
interrupted its growth record. The cloud over Apria Healthcare Group remains
the degree to which the government cuts oxygen supply reimbursement for
Medicare patients. Sepracor, on the other hand, was a big winner with its
full pipeline of late stage generic drug candidates including one for asthma
and one for incontinence. Universal Health Services, Cl.B is rapidly growing
as the third largest hospital management company in the country. In the
upcoming six-month period, our focus will be to try to distinguish between
the winners and losers in this exciting but tricky segment.
Energy stocks continued to consolidate from tremendous outperformance in
1996. Ocean Energy, the former Flores & Rucks, Inc., has underperformed this
year after having been such a great stock in 1996. Daily Petroleum Services
has not recovered since it encountered competition and price discounting in
its discretional drilling services. On a better note, offshore construction
producer Global Industries has extended its outperformance into this year.
Titan Exploration was another good stock for us. We currently believe that
the strong fundamentals in this sector continue to merit an overweighting.
Although Technology has outperformed the market since the end of April,
it is the only sector in the Portfolio with a negative return for the latest
six-month period. The Fund had its share of successes in this area including
Novellus Systems, a manufacturer of semiconductor equipment; McAfee
Associates, a provider of anti-virus software; and Altera, which fabricates
field programmable semiconductors. Unfortunately, our disappointments more
than offset our good fortune in this area. Vanstar, a systems integrator,
experienced a major earnings shortfall while Citrix Systems lost a royalty
agreement with Microsoft. Finally, the market reacted negatively to software
tools manufacturer Rational Software's acquisition of Pure Atria. We
currently continue to be drawn to the strong fundamentals of this sector, and
our overweighting in this group is indicative of our conviction of its
long-term attractiveness.
We remain very enthusiastic regarding the prospects of the companies in
your Fund. We feel we don't need to remind you that good things come in small
packages.
We thank you for your interest. You may be sure that we will exert our
best efforts on your behalf.
Sincerely,
[Hilary R. Woods signature logo] [Paul Kandel signature logo]
Hilary R. Woods Paul Kandel
Co-Portfolio Manager Co-Portfolio Manager
July 18, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. _ Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Russell 2000 Index is a widely accepted unmanaged index of small cap stock
performance.
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Common Stocks_97.3% Shares Value
__________ __________
<S> <C> <C>
Commercial Services_2.8% Boise Cascade Office Products (a) 265,000 $ 4,505,000
Outdoor Systems...................... (a) 250,000 9,562,500
Robert Half International............ (a) 185,000 8,706,563
_____________
22,774,063
_____________
Consumer Durables_2.0% Outboard Marine 390,000 6,922,500
Sola International................... (a) 262,500 8,793,750
_____________
15,716,250
_____________
Consumer Non-Durables_1.9% Bush Boake Allen (a) 155,000 4,824,375
Warnaco Group, Cl. A................... 325,000 10,359,375
_____________
15,183,750
_____________
Consumer Services_4.5% Cox Radio, Cl. A (a) 175,000 4,484,375
Evergreen Media, Cl. A............... (a) 225,000 10,040,625
Individual Investor Group............ (a) 307,692 2,442,305
Meredith............................... 400,000 11,600,000
Sun International Hotels............. (a) 206,400 7,623,900
_____________
36,191,205
_____________
Electronic Technology_8.6% Altera (a) 150,000 7,575,000
Aspect Telecommunications............ (a) 315,000 7,008,750
Auspex Systems....................... (a) 500,000 4,812,500
Lattice Semiconductor................ (a) 125,000 7,062,500
Novellus Systems..................... (a) 115,000 9,947,500
Rohr (a) 425,000 9,323,437
Sanmina.............................. (a) 130,000 8,255,000
Thiokol 140,000 9,800,000
Westell Technologies, Cl. A.......... (a) 210,000 5,250,000
_____________
69,034,687
_____________
Energy Minerals_4.6% Cairn Energy USA (a) 435,000 5,709,375
Ocean Energy......................... (a) 218,000 10,082,500
Parker & Parsley Petroleum............. 340,000 12,027,500
Titan Exploration.................... (a) 727,000 8,814,875
_____________
36,634,250
_____________
Finance/Banking_7.4% Bank United, Cl. A 275,000 10,450,000
Charter One Financial.................. 170,000 9,158,750
Chittenden............................. 256,250 8,776,563
Colonial BancGroup, Cl. A.............. 269,000 6,523,250
Dime Bancorp........................... 440,000 7,700,000
Greenpoint Financial................... 160,000 10,650,000
Hibernia, Cl. A........................ 405,000 5,644,687
_____________
58,903,250
_____________
Finance/Insurance_18.1% ACE 130,000 9,603,750
Amerin............................... (a) 400,000 9,700,000
Berkley (W.R.)......................... 155,000 9,125,625
Capital Re............................. 190,000 10,165,000
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Common Stocks (continued) Shares Value
__________ __________
Finance/Insurance (continued) CapMAC Holdings 246,000 $ 8,271,750
Enhance Financial Services Group....... 225,000 9,871,875
Everest Reinsurance Holdings........... 367,800 14,574,075
Executive Risk......................... 250,000 13,000,000
Frontier Insurance Group............... 205,000 13,273,750
Ohio Casualty.......................... 231,500 10,186,000
Reliance Group Holdings................ 810,000 9,618,750
Terra Nova (Bermuda) Holdings, Cl. A... 310,000 6,510,000
TIG Holdings........................... 300,000 9,375,000
Western National....................... 450,000 12,065,625
_____________
145,341,200
_____________
Finance/Other_1.7% CorVel (a) 172,300 4,953,625
FINOVA Group........................... 115,000 8,797,500
_____________
13,751,125
_____________
Health Services_3.0% Allegiance 200,000 5,450,000
Heska (a) 250,000 2,125,000
OccuSystems.......................... (a) 270,000 7,830,000
Universal Health Services, Cl. B..... (a) 225,000 8,662,500
_____________
24,067,500
_____________
Health Technology_8.1%. Acuson (a) 215,000 4,945,000
ChiRex (a) 365,000 4,334,375
Forest Laboratories.................. (a) 170,000 7,097,500
Guilford Pharmaceuticals............. (a) 180,000 4,365,000
Mentor 400,000 11,850,000
Physio-Control International......... (a) 303,700 4,555,500
Sepracor............................. (a) 325,000 8,389,062
Varian Associates...................... 195,000 10,578,750
Watson Pharmaceuticals............... (a) 210,000 8,872,500
_____________
64,987,687
_____________
Industrial Services_4.4% Culligan Water Technologies (a) 190,000 8,502,500
Global Industries.................... (a) 540,000 12,614,063
IMCO Recycling......................... 300,000 5,662,500
Pride International.................. (a) 350,000 8,400,000
Separation Technologies.......... (a,b,c) 81,984 311,539
_____________
35,490,602
_____________
Non-Energy Minerals_.9% Minerals Technologies 190,000 7,125,000
_____________
Process Industries_7.6% Albany International, Cl. A 330,000 7,425,000
Applied Extrusion Technologies....... (a) 225,000 2,643,750
Cambrex................................ 231,400 9,198,150
Crompton & Knowles..................... 500,000 11,125,000
Millennium Chemicals................... 270,000 6,142,500
OM Group............................... 272,000 9,010,000
Spartech............................... 565,000 7,345,000
Westpoint Stevens.................... (a) 210,000 8,216,250
_____________
61,105,650
_____________
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Common Stocks (continued) Shares Value
__________ __________
Producer Manufacturing_6.3% Crane 225,000 $ 9,407,812
Keystone International................. 345,000 11,967,188
MagneTek............................. (a) 600,000 9,975,000
Osmonics............................. (a) 154,800 2,854,125
Stewart & Stevenson Services........... 300,000 7,800,000
Titan International.................... 490,000 8,636,250
_____________
50,640,375
_____________
Retail Trade_8.6% Consolidated Stores (a) 256,250 8,904,688
General Nutrition.................... (a) 330,000 9,240,000
OfficeMax............................ (a) 520,000 7,507,500
Pep Boys-Manny, Moe & Jack............. 290,000 9,878,125
Shopko Stores.......................... 265,000 6,757,500
Stein Mart........................... (a) 255,000 7,650,000
Talbots 215,000 7,310,000
Tiffany 260,000 12,008,750
_____________
69,256,563
_____________
Technology Services_5.8% Aspect Development (a) 200,000 5,212,500
CBT Group PLC, A.D.R................. (a) 131,000 8,269,375
McAfee Associates.................... (a) 190,000 11,993,750
Pure Atria........................... (a) 140,000 1,977,500
Rational Software.................... (a) 290,000 4,875,625
Summit Design........................ (a) 302,500 2,457,812
VIASOFT.............................. (a) 225,000 11,418,750
_____________
46,205,312
_____________
Utilities_1.0% Calpine (a) 413,000 7,847,000
_____________
TOTAL COMMON STOCKS
(cost $552,326,407).................. $780,255,469
=============
Preferred Stocks_.2%
Industrial Services_.1% Separation Technologies,
Ser. A, 6%, Cum. Conv.......... (a,b,c) 243,385 $ 924,863
_____________
Technology_.1% Crystal Dynamics, Ser. D, Conv. (a,c) 180,000 675,000
_____________
TOTAL PREFERRED STOCKS
(cost $2,281,463).................... $ 1,599,863
=============
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997 (UNAUDITED)
Principal
Short-Term Investments_4.2% Amount Value
__________ __________
U.S. Treasury Bills: 4.98%, 8/21/1997 $ 1,032,000 $ 1,024,590
4.90%, 9/4/1997........................ 2,147,000 2,127,312
4.93%, 9/18/1997....................... 30,779,000 30,436,122
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $33,599,124)................... $ 33,588,024
=============
TOTAL INVESTMENTS (cost $588,206,994)....................................... 101.7% $815,443,356
======= =============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (1.7%) $ (13,473,192)
======= =============
NET ASSETS.................................................................. 100.0% $801,970,164
======= =============
Notes to Statement of Investments:
(a) Non-income producing.
(b) Investments in non-controlled affiliates (cost $1,243,000)_see Note 1(c).
(c) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate value of $1,911,402, represents
approximately .24% of net assets.
</TABLE>
<TABLE>
<CAPTION>
Acquisition Purchase Percentage of
Issuer Date Price Net Assets Valuation*
___ ____________ _________ ______________ _____________
<S> <C> <C> <C> <C>
Crystal Dynamics, Ser. D Conv. .......... 7/10/95 $7.50 .08% $3.75
Separation Technologies.................. 1/13/95 3.80 .04 3.80
Separation Technologies,
Ser. A, 6% Cum. Conv. ............... 7/12/93-1/13/95 3.80 .12 3.80
*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>
<TABLE>
<CAPTION>
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997 (UNAUDITED)
Cost Value
____________ ____________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $588,206,994 $815,443,356
Cash....................................... 322,628
Receivable for investment securities sold.. 744,101
Receivable for shares of Common Stock subscribed 453,212
Dividends and interest receivable.......... 328,085
Prepaid expenses........................... 98,128
______________
817,389,510
______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 524,946
Due to Distributor......................... 161,096
Payable for investment securities purchased 14,311,610
Payable for shares of Common Stock redeemed 288,155
Accrued expenses........................... 133,539
______________
15,419,346
______________
NET ASSETS.................................................................. $801,970,164
==============
REPRESENTED BY: Paid-in capital............................ $562,850,650
Accumulated net investment (loss).......... (2,228,063)
Accumulated net realized gain (loss) on investments 14,111,215
Accumulated net unrealized appreciation (depreciation)
on investments_Note 4 227,236,362
______________
NET ASSETS.................................................................. $801,970,164
==============
SHARES OUTSTANDING
(100 million shares of $.01 par value of Common Stock authorized)........... 17,928,721
NET ASSET VALUE, offering and redemption price per share_Note 3(d).......... $44.73
=======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INVESTMENT INCOME
INCOME: Cash dividends (net of $14,625 foreign taxes withheld
at source)............................. $ 2,159,468
Interest................................... 947,004
___________
Total Income......................... $ 3,106,472
EXPENSES: Management fee_Note 3(a)................... 2,779,323
Shareholder servicing costs_Note 3(b)...... 1,303,815
Custodian fees_Note 3(b)................... 32,919
Prospectus and shareholders' reports....... 24,550
Professional fees.......................... 24,283
Directors' fees and expenses_Note 3(c)..... 22,934
Registration fees.......................... 22,094
Loan commitment fees_Note 2................ 4,985
Miscellaneous.............................. 4,181
___________
Total Expenses....................... 4,219,084
___________
INVESTMENT (LOSS)_NET....................................................... (1,112,612)
___________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments:
Unaffiliated issuers................... $ 3,372,609
Affiliated issuers..................... (39,974)
___________
Net Realized Gain (Loss)............... 3,332,635
Net unrealized appreciation (depreciation)
on investments:
Unaffiliated issuers................... 69,908,168
Affiliated issuers..................... (1,031,579)
___________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 72,209,224
___________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............. $71,096,612
============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS NEW LEADERS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
_________________ __________________
OPERATIONS:
Investment (loss)....................................................... $ (1,112,612) $ (1,043,559)
Net realized gain (loss) on investments................................. 3,332,635 65,597,834
Net unrealized appreciation (depreciation) on investments............... 68,876,589 48,464,766
_________________ __________________
Net Increase (Decrease) in Net Assets Resulting from Operations... 71,096,612 113,019,041
_________________ __________________
DIVIDENDS TO SHAREHOLDERS FROM:
Net realized gain on investments........................................ __ (55,873,648)
_________________ __________________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 171,598,590 384,662,435
Dividends reinvested.................................................... __ 54,550,741
Cost of shares redeemed................................................. (221,724,501) (322,304,093)
_________________ __________________
Increase (Decrease) in Net Assets from Capital Stock Transactions. (50,125,911) 116,909,083
_________________ __________________
. Total Increase (Decrease) in Net Assets 20,970,701 174,054,476
NET ASSETS:
Beginning of Period..................................................... 780,999,463 606,944,987
_________________ __________________
End of Period......................................................... $ 801,970,164 $ 780,999,463
================= ===================
(Distributions in excess of investment (loss)_net)........................ $ (2,228,063) $ (1,115,451)
_________________ __________________
Shares Shares
_________________ __________________
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 4,194,698 9,444,204
Shares issued for dividends reinvested.................................. ____ 1,359,096
Shares redeemed......................................................... (5,436,608) (7,865,709)
_________________ __________________
Net Increase (Decrease) in Shares Outstanding..................... (1,241,910) 2,937,591
================= ===================
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 period indicated. This
information has been derived from the Fund's financial statements.
Six Months Ended
June 30, 1997 Year Ended December 31,
_____________________________________________________
PER SHARE DATA: (Unaudited) 1996 1995 1994 1993 1992
____________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $40.74 $37.39 $31.33 $34.13 $32.17 $32.29
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income (loss)_net.......... (.07) (.05) .06 .10 .07 .14
Net realized and unrealized gain (loss)
on investments...................... 4.06 6.47 9.17 (.22) 5.30 2.81
_______ _______ _______ _______ _______ _______
Total from Investment Operations...... 3.99 6.42 9.23 (.12) 5.37 2.95
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income_net.. __ __ (.07) (.08) (.07) (.14)
Dividends from net realized gain on investments __ (3.07) (3.10) (2.60) (3.34) (2.93)
_______ _______ _______ _______ _______ _______
Total Distributions................... __ (3.07) (3.17) (2.68) (3.41) (3.07)
_______ _______ _______ _______ _______ _______
Net asset value, end of period........ $44.73 $40.74 $37.39 $31.33 $34.13 $32.17
_______ _______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN................... 9.79%(1) 17.31% 29.80% (.15%) 17.07% 9.43%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .57%(1) 1.17% 1.19% 1.16% 1.22% 1.21%
Ratio of net investment income (loss)
to average net assets............... (.15%)(1) (.15%) .17% .30% .19% .43%
Decrease reflected in above expense ratios
due to undertakings by the Manager.. __ __ .02% .05% .04% .04%
Portfolio Turnover Rate............... 35.72%(1) 102.22% 108.80% 94.21% 127.97% 119.45%
Average commission rate paid (2)...... $.0586 $.0568 __ __ __ __
Net Assets, end of period (000's Omitted) $801,970 $780,999 $606,945 $391,625 $338,967 $233,619
(1) Not annualized.
(2) For fiscal years beginning January 1, 1996, the Fund is required
to disclose its average commission rate paid per share
for purchases and sales of investment securities.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus New Leaders Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company. The Fund's investment objective is to maximize capital
appreciation. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon"). Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a
sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(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) 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. The
following summarizes affiliated issuers during the period ended June 30,
1997:
<TABLE>
<CAPTION>
Shares
_________________________________________________
Beginning End of Dividend Market
Name of Issuer of Period Purchases Sales Period Income Value
_______ ___________ __________ ________ ________ _________ ___________
<S> <C> <C> <C> <C> <C> <C>
Daily Petroleum Services......... 320,000 _ 320,000 _ $ _ $ _
Individual Investor Group*....... 307,692 _ _ 307,692 _ 2,442,305
Separation Technologies_Common... 81,984 _ _ 81,984 _ 311,539
Separation Technologies_Preferred 243,385 _ _ 243,385 _ 924,863
*No longer an affiliated issuer at June 30, 1997.
</TABLE>
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. This may result in distributions
that are in excess of investment income-net and net realized gain on a fiscal
year basis. To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Revenue Code, and to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes.
NOTE 2_BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended June
30, 1997, the Fund did not borrow under the Facility.
NOTE 3_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 value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full fiscal year the aggregate expenses, exclusive of
taxes, brokerage, commitment fees, interest on borrowings (which, in the view
of Stroock & Stroock & Lavan LLP, counsel to the Fund, also contemplates
dividends on securities sold short), and extraordinary expenses, exceed 11\2%
of the value of the Fund's average net assets, the Fund may deduct from the
payments to be made to the Manager, or the Manager will bear such excess
expense. There was no expense reimbursement for the period ended June 30,
1997.
(B) Under the Shareholder Services Plan, 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 the provision of certain services. 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 ( a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended June 30, 1997, the Fund was charged $926,441
pursuant to the Shareholder Services Plan.
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 $211,862 during the period ended June 30, 1997.
The Fund compensates Mellon under a custody agreement to provide
custodial services for the Fund. During the period ended June 30, 1997,
$32,919 was charged by Mellon pursuant to the custody agreement.
(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 Fund Exchanges service) 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 period ended June 30, 1997, redemption fees
amounted to $41, 715.
DREYFUS NEW LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 4_SECURITIES TRANSACTIONS:
The following summarizes the aggregate amount of purchases and sales of
investment securities, excluding short-term securities, during the period
ended June 30, 1997:
<TABLE>
<CAPTION>
Purchases Sales
_________________ _____________
<S> <C> <C>
Unaffiliated issuers................................ $255,577,965 $292,749,524
Affiliated issuers.................................. ____ 1,104,948
_________________ _____________
Total............................................. $255,577,965 $293,854,472
================ ===============
</TABLE>
At June 30, 1997, accumulated net unrealized appreciation on investments
was $227,236,362, consisting of $238,592,666 gross unrealized appreciation
and $11,356,304 gross unrealized depreciation.
At June 30, 1997, 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 lion "d" logo]
Registration Mark
DREYFUS NEW LEADERS FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 085SA976
[Dreyfus logo]
Registration Mark
New Leaders
Fund, Inc.
Semi-Annual
Report
June 30, 1997
