Dreyfus New Leaders
Fund, Inc.
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus New Leaders Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus New Leaders Fund,
Inc. covering the six-month period from January 1, 2000 through June 30, 2000.
Inside, you' ll find valuable information about how the fund was managed during
the reporting period, including a discussion with the fund's portfolio managers,
Paul Kandel and Hilary Woods.
While mid-cap stock prices were modestly higher over the past six months, as
measured by the Russell Midcap Index, the period was marked by high levels of
volatility and dramatic shifts in investor sentiment. Between January and
mid-March, stocks of all sizes generally continued to advance, led by
fast-growing technology stocks that, many investors believed, would benefit most
from the "new economy." Subsequently, however, technology stocks corrected
sharply over concerns about rising interest rates and extremely high valuations.
Other sectors of the stock market also declined, erasing most of the gains
achieved earlier in the year.
Overall, mid-capitalization stocks generally outperformed large-cap and
small-cap stocks during the period, particularly in the growth-oriented segment
of the market which is dominated by technology companies. In our view, these
short-term swings in investor sentiment highlight once again the importance of
broad diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus New Leaders Fund, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF FUND PERFORMANCE
Paul Kandel and Hilary Woods, Portfolio Managers
How did Dreyfus New Leaders Fund, Inc. perform relative to its benchmark?
For the six-month period ended June 30, 2000, Dreyfus New Leaders Fund, Inc.
produced a total return of 10.56%.(1) This compares with a total return of 5.69%
for the fund's benchmark, the Russell 2500 Index, for the same period.(2)
We attribute the fund' s strong performance to our success in identifying
attractive individual investment opportunities among a wide range of sectors,
industries and investment styles. The fund also succeeded in emphasizing some of
the market's strongest sectors and de-emphasizing some of market's weakest
sectors.
What is the fund's investment approach?
The fund invests primarily in a diversified portfolio of small- and mid-size
companies, focusing on those believed to be new leaders in their industries.
Typically, these companies are characterized by new or innovative products or
services that have the potential to enhance earnings growth. We also consider
factors that we believe are likely to affect a stock's performance, such as
changes in a company's management or organizational structure.
Our investment approach targets both growth-oriented stocks (those of companies
with earnings that are expected to grow faster than the overall market),
value-oriented stocks (those that appear underpriced according to a variety of
financial measurements) , and stocks that exhibit both growth and value
characteristics. We further diversify among the market's various industries and
sectors, supervising a team of sector managers, each of whom make buy-and-sell
decisions within their respective areas of expertise.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
Volatile market conditions prevailed during the first six months of 2000. Strong
economic growth in the United States generated concerns about prospects for
rising inflation, which prompted the Federal Reserve Board to raise short-term
interest rates. In this environment of uncertainty, the stock market rose and
fell rapidly, with both growth- and value-oriented stocks advancing and
retreating at various times. Technology emerged as the strongest sector of the
equity market, although prices of many of the most speculative technology stocks
fell sharply in mid-March as investors focused on companies exhibiting financial
stability and profitability. Energy stocks also climbed higher, boosted by
rising prices for oil and natural gas. Many other sectors did not fare as well.
In particular, consumer staples companies faced a highly competitive global
environment that curtailed profitability and limited their ability to increase
prices.
These conditions affected our allocation of the fund's assets. We added to our
position in technology, a move that generally increased returns despite
disappointments in a few of our holdings. Our best performers in technology
focused on optical networking companies helping to provide broadband access to
the Internet, such as Ciena; cable equipment companies benefiting from the rapid
deployment of digital cable systems, such as Scientific-Atlanta; and
semiconductor companies, such as Altera, that are meeting rapidly growing demand
for semiconductor chips in a wide variety of applications.
We also held a larger percentage of stocks in the energy sector than the Russell
2500 Index, successfully capitalizing on rising commodity prices through our
investments in the oilfield services outfit ENSCO International and exploration
and production companies such as Apache. On the other hand, we limited the
fund' s exposure to utilities, a sector that often suffers when energy prices
rise. Although the utilities component of the Russell 2500 Index performed
poorly, the telecommunications utilities in which we invested, such as
Metromedia Fiber Network, generally performed strongly.
The fund's weakest performance resulted in the consumer staples sector. Although
fundamentals for most of our holdings in this sector remained unchanged, market
volatility took a toll on several holdings, such as Tiffany & Co., the
well-known jewelry company, and Gemstar International, best known for its VCR
Plus+ system. We also experienced disappointing results from many of our
financial sector holdings, which suffered from the rising interest-rate
environment and several company-specific problems.
What is the fund's current strategy?
As of the end of the reporting period, we have reduced our exposure to most
types of cyclicals, such as housing, autos, industrial commodities and
machinery, in light of lower than expected employment and economic figures,
indicating that the rate of U.S. economic growth may be slowing. Conversely, we
have initiated positions in cyclicals which we anticipate may benefit from a
plateauing in energy prices. We have also reduced our holdings in the technology
and energy sectors, bringing the fund's allocations in these sectors more in
line with that of the benchmark. We have replaced those holdings with consumer,
health care and financial stocks, many of which have fallen to levels we
consider attractive. We continue to adhere to our blended growth-and-value
investment strategy in seeking to outperform the Russell 2500 Index.
July 17, 2000
(1) 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 SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: FACTSET RESEARCH SYSTEMS, INC. -- REFLECTS REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE RUSSELL 2500
INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF SMALL- TO MID-CAP STOCK MARKET
PERFORMANCE AND IS COMPOSED OF THE 2,500 SMALLEST COMPANIES IN THE RUSSELL 3000
INDEX. THE RUSSELL 3000 INDEX IS COMPOSED OF THE 3000 LARGEST U.S. COMPANIES BY
MARKET CAPITALIZATION.
The Fund
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
COMMON STOCKS--94.4% Shares Value ($)
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<S> <C> <C>
CONSUMER DURABLES--1.8%
SPX 105,000 (a) 12,698,438
CONSUMER NON-DURABLES--2.1%
International Flavors & Fragrances 310,000 9,358,125
Nabisco Group Holdings 231,400 6,001,938
15,360,063
CONSUMER SERVICES--6.7%
AMFM 170,000 (a) 11,730,000
Hispanic Broadcasting 280,000 (a) 9,275,000
Infinity Broadcasting, Cl. A 437,500 (a) 15,941,406
USA Networks 510,000 (a) 11,028,750
47,975,156
ELECTRONIC TECHNOLOGY--16.6%
Ciena 185,000 (a) 30,837,180
Flextronics International 240,000 (a) 16,485,000
Gemstar International 278,000 (a) 17,083,969
Northrop Grumman 115,000 7,618,750
Sawtek 125,000 7,195,313
Scientific-Atlanta 305,000 22,722,500
Teradyne 229,000 (a) 16,831,500
118,774,212
ENERGY MINERALS--5.9%
Anadarko Petroleum 225,000 11,095,313
Apache 185,000 10,880,313
Santa Fe International 325,000 11,354,688
Union Pacific Resources Group 400,000 8,800,000
42,130,314
FINANCE--8.4%
Charter One Financial 375,007 8,625,161
Compass Bancshares 400,000 6,825,000
First Virginia Banks 255,000 8,877,188
John Hancock Financial Services 475,000 11,251,563
T. Rowe Price Associates 150,000 6,375,000
Protective Life 370,000 9,851,250
XL Capital, Cl. A 155,000 8,389,375
60,194,537
COMMON STOCKS (CONTINUED) Shares Value ($)
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HEALTH TECHNOLOGY--13.7%
ALZA 175,000 (a) 10,346,875
Abgenix 104,000 12,465,375
Allergan 200,000 14,900,000
Sepracor 170,000 (a) 20,506,250
St. Jude Medical 235,000 (a) 10,780,625
Teva Pharmaceutical Industries, A.D.R. 265,000 14,690,938
Watson Pharmaceuticals 275,000 (a) 14,781,250
98,471,313
INDUSTRIAL SERVICES--3.8%
ENSCO International 325,000 11,639,063
Fluor 265,000 8,380,625
Weatherford International 185,000 (a) 7,365,312
27,385,000
MISCELLANEOUS--.1%
STI Holdings 81,984 (a,b,c) 311,539
NON-ENERGY MINERALS--1.1%
Placer Dome 850,000 8,128,125
PROCESS INDUSTRIES--4.9%
Bowater 145,000 6,398,125
Eastman Chemical 200,000 9,550,000
Engelhard 550,000 9,384,375
Goodrich (B.F.) 285,000 9,707,813
35,040,313
PRODUCER MANUFACTURING--2.0%
CNH Global 700,000 (a) 6,475,000
Navistar International 250,000 (a) 7,765,625
14,240,625
RETAIL TRADE--2.6%
Family Dollar Stores 500,000 9,781,250
Tiffany & Co. 135,000 9,112,500
18,893,750
SEMICONDUCTORS--10.5%
ASM Lithography Holding, N.V. 375,000 (a) 16,546,875
Altera 230,000 (a) 23,445,625
International Rectifier 125,000 (a) 7,000,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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SEMICONDUCTORS (CONTINUED)
National Semiconductor 320,000 (a) 18,160,000
Vitesse Semiconductor 140,000 (a) 10,298,750
75,451,250
TECHNOLOGY SERVICES--4.2%
Art Technology Group 125,000 12,617,188
Intuit 250,000 (a) 10,343,750
Park Place Entertainment 575,000 (a) 7,007,813
29,968,751
TRANSPORTATION--1.5%
Expeditors International of Washington 225,000 10,687,500
UTILITIES--8.5%
CP&L Energy 275,000 8,782,813
Dynegy, Cl. A 210,000 14,345,625
ITC DeltaCom 520,000 (a) 11,602,500
Metromedia Fiber Network, Cl. A 380,000 (a) 15,081,250
Time Warner Telecom, Cl. A 165,000 10,621,875
60,434,063
TOTAL COMMON STOCKS
(cost $394,322,172) 676,144,949
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PREFERRED STOCKS --.1%
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STI HOLDINGS
Ser. A, 6%, Cum. Conv.
(cost $931,463) 243,385 (a,b,c) 924,863
Principal
SHORT-TERM INVESTMENTS--6.9% Amount ($) Value ($)
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U.S. TREASURY BILLS:
5.60%, 8/24/2000 6,026,000 5,977,913
5.54%, 8/31/2000 3,395,000 3,363,936
5.73%, 9/7/2000 861,000 852,080
5.78%, 9/14/2000 14,912,000 14,741,406
5.67%, 10/5/2000 24,887,000 24,515,935
TOTAL SHORT-TERM INVESTMENTS
(cost $49,433,357) 49,451,270
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TOTAL INVESTMENTS (cost $444,686,992) 101.4% 726,521,082
LIABILITIES, LESS CASH AND RECEIVABLES (1.4%) (10,231,039)
NET ASSETS 100.0% 716,290,043
(A) NON-INCOME PRODUCING.
(B) INVESTMENTS IN NON-CONTROLLED AFFILIATES (COST $1,243,000)--SEE NOTE 1(D).
(C) SECURITIES RESTRICTED AS TO PUBLIC RESALE. INVESTMENTS IN RESTRICTED
SECURITIES, WITH AN AGGREGATE VALUE OF $1,236,402 REPRESENTS APPROXIMATELY .17%
OF NET ASSETS:
Acquisition Purchase
Issuer Date Price ($) Net Assets (%) Valuation ($)((+))
------------------------------------------------------------------------------------------------------------------------------------
STI Holdings 1/13/95 3.80 .04 3.80
STI Holdings,
Ser. A, 6%, Cum. Conv. 7/12/93-1/13/95 3.80 .13 3.80
((+)) THE VALUATION OF THESE SECURITIES HAS BEEN DETERMINED IN GOOD FAITH UNDER
THE DIRECTION OF THE BOARD OF DIRECTORS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 444,686,992 726,521,082
Cash 1,027
Dividends receivable 1,242,888
Receivable for shares of Common Stock subscribed 213,084
Prepaid expenses 17,589
727,995,670
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 663,121
Payable for investment securities purchased 9,277,116
Payable for shares of Common Stock redeemed 1,691,376
Accrued expenses 74,014
11,705,627
--------------------------------------------------------------------------------
NET ASSETS ($) 716,290,043
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 366,735,404
Accumulated investment (loss) (208,336)
Accumulated net realized gain (loss) on investments 67,928,885
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 281,834,090
--------------------------------------------------------------------------------
NET ASSETS ($) 716,290,043
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SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 13,419,733
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 53.38
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $9,064 foreign taxes withheld at source) 2,951,873
Interest 705,336
TOTAL INCOME 3,657,209
EXPENSES:
Management fee--Note 3(a) 2,623,952
Shareholder servicing costs--Note 3(b) 1,118,306
Professional fees 29,078
Custodian fees--Note 3(b) 26,810
Directors' fees and expenses--Note 3(c) 22,670
Prospectus and shareholders' reports 20,305
Registration fees 11,173
Loan commitment fees--Note 2 2,770
Miscellaneous 10,481
TOTAL EXPENSES 3,865,545
INVESTMENT (LOSS) (208,336)
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 69,801,498
Net unrealized appreciation (depreciation) on investments 135,790
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 69,937,288
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 69,728,952
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment (loss) (208,336) (511,706)
Net realized gain (loss) on investments 69,801,498 105,055,980
Net unrealized appreciation (depreciation)
on investments 135,790 94,099,759
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 69,728,952 198,644,033
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
NET REALIZED GAIN ON INVESTMENTS (34,529,376) (71,263,590)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 91,036,706 187,240,492
Dividends reinvested 33,033,951 68,092,489
Cost of shares redeemed (116,346,665) (394,139,085)
Redemption fee 15,672 28,029
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS 7,739,664 (138,778,075)
TOTAL INCREASE (DECREASE) IN NET ASSETS 42,939,240 (11,397,632)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 673,350,803 684,748,435
END OF PERIOD 716,290,043 673,350,803
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,729,151 4,044,076
Shares issued for dividends reinvested 624,342 1,379,412
Shares redeemed (2,221,657) (8,710,510)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 131,836 (3,287,022)
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
June 30, 2000 Year Ended December 31,
----------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 50.67 41.31 44.35 40.74 37.39 31.33
Investment Operations:
Investment income (loss)--net (.02)(a) (.04)(a) (.10) (.14) (.05) .06
Net realized and unrealized
gain (loss) on investments 5.35 15.33 (1.78) 7.99 6.47 9.17
Total from
Investment Operations 5.33 15.29 (1.88) 7.85 6.42 9.23
Distributions:
Dividends from investment
income--net -- -- -- -- -- (.07)
Dividends from net realized
gain on investments (2.62) (5.93) (1.17) (4.24) (3.07) (3.10)
Total Distributions (2.62) (5.93) (1.17) (4.24) (3.07) (3.17)
Redemption fee added to
paid-in capital .00(b) .00(b) .01 -- -- --
Net asset value, end of period 53.38 50.67 41.31 44.35 40.74 37.39
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TOTAL RETURN (%) 10.56(c) 37.42 (3.95) 19.54 17.31 29.80
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .55(c) 1.13 1.14 1.12 1.17 1.19
Ratio of net investment
income (loss) to average
net assets (.03)(c) (.08) (.21) (.33) (.15) .17
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- -- -- -- -- .02
Portfolio Turnover Rate 45.73(c) 95.49 107.38 82.28 102.22 108.80
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Net Assets,
end of period ($ x 1,000) 716,290 673,351 684,748 859,534 780,999 606,945
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
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, as amended (the "Act" ), as a diversified open-end
management investment company. The fund's investment objective is to maximize
capital appreciation. The Dreyfus Corporation (the "Manager") serves as the
fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. (" Mellon" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of the Manager, became the distributor of the fund's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
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) 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 the 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 and the difference between the amount 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. Under the terms of the custody agreement, the fund received net
earnings credits of $4,053 during the period ended June 30, 2000 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(d) Affiliated issuers: Issuers in which the fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act. The
following summarizes non-controlled affiliated issuers during the period ended
June 30, 2000:
<TABLE>
Shares
----------------------------------------------------------
Beginning End of Dividend Market
Name of issuer of Period Purchases Sales Period Income ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
STI Holdings
(Common) 81,984 -- -- 81,984 -- 311,539
STI Holdings
(Conv. Preferred) 243,385 -- -- 243,385 -- 924,863
</TABLE>
(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,
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
but the fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
"Code" ). 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 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 $500 million
redemption credit facility (the "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. During the period ended June
30, 2000, 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 year the aggregate expenses of the fund, exclusive of taxes,
brokerage fees, 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. During the
period ended June 30, 2000, there was no expense reimbursement pursuant to the
Agreement.
(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
inquiries 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, 2000, the fund was charged $874,651 pursuant to the Shareholder
Services Plan, of which $592,616 was paid to DSC.
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. During the period
ended June 30, 2000, the fund was charged $129,049 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended June 30, 2000, the fund was
charged $26,810 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.
(d) A 1% redemption fee is charged and retained by the fund on shares redeemed
within six months following the date of issuance, including redemptions made
through the use of the fund's exchange privilege.
(e) During the period ended June 30, 2000, the fund incurred total brokerage
commissions of $799,926, of which $25,555 was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended June 30, 2000, amounted to
$309,961,796 and $357,879,816, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$281,834,090, consisting of $294,681,443 gross unrealized appreciation and
$12,847,353 gross unrealized depreciation.
At June 30, 2000, 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).
NOTES
For More Information
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 085SA006
