LETTER TO SHAREHOLDERS
Dear Shareholder:
For the 12-month period ended September 30, 1994, the Fund's Class A
shares posted a total return of 6.14%.* This compares with a total return for
the Standard & Poor's 500 Composite Stock Price Index of 3.68% for the same
period.** For the 6-month period ended September 30, 1994, the Class A
shares declined 1.90%, while the S & P 500 advanced 5.32%. Class B shares had
a total return of 5.35% for the full fiscal year and -2.26% for the latest 6
months.*
The Fund's gold share position currently stands at 20% of the total
portfolio. These holdings added substantially to the Fund's 12-month returns
despite realizing a small negative return for the latest six months. Gold
stocks have recently rebounded from an 8-month correction to continue their
bull market that began in 1993. We continue to favor gold equities due to our
view that an imbalance exists between the real economy and the financial
markets. This imbalance is demonstrated by the high rates of return achieved
by stocks and bonds over the past 12 years, as well as the past decade's
sharp increase in the ratio of total debt to Gross Domestic Product.
Unwinding the imbalance could involve breaking the worldwide financial asset
bubble. Since gold is not widely held, reallocation of portfolios by
investors seeking to protect their wealth could boom the investment demand
for gold bullion and shares.
Such imbalances resolve themselves via either deflation or reflation. The
credit cycles that ended in 1815, 1865, and 1929 all exhibited excessive debt
levels and resulted in lower price levels through a deflationary process.
Today, we again have extraordinarily high levels of debt that may very likely
result in the second major deflation of this century. In the current
instance, however, our Government represents over 20% of the credit markets
as well as an equal portion of the Gross Domestic Product. Moreover, our
currency is not based on gold. Given those facts, it's also possible that the
Government will rectify the imbalance by means of monetary expansion, paying
down the excess debt with a debased currency. While such reflation would
temporarily defuse the domestic debt situation, its results could also
include a declining dollar and rising gold prices.
Contemporary history tends to reinforce our belief that decreases in the
prices of U.S. financial assets may coincide with a flight from the dollar.
The dollar has weakened substantially against all currencies since January,
and the Fund's nondollar positions provided a positive return during both the
fiscal year and the last six months. Accordingly, we are currently
maintaining a 22% position in debt securities denominated in Deutschmarks,
Swiss Francs and Dutch Guilders.
The Fund's Board of Directors has approved a change in management's
policy concerning foreign investment. Currently, the Fund will not invest
more than 25% of its assets in securities of foreign issuers. Effective
January 1, 1995, that percentage will be raised to 65% to allow the Fund more
latitude to pursue investment opportunities in the rapidly expanding
worldwide marketplace, including emerging markets.
The Fund currently holds index put options and short positions that could
benefit from declines in the equity markets as well as bond put options that
generally appreciate as interest rates rise. Because the stock market did not
decline over the fiscal year, and rallied over the last six months, the
Fund's equity put options and short positions lost value and reduced total
return. However, the marked increases in interest rates during the entire
fiscal year, and particularly during the last six months, have added to the
Fund's total return.
The general stock market has remained at high levels. Yet many
indicators, such as short-term interest rates, global bond market levels, the
Dow Jones Utilities Average, gold bullion prices and the CRB Index have
reversed their decade-long trends. The combination of declining interest
rates and commodity prices, which had propelled higher stock prices since
1980, is no longer available. Now the market is focusing on earnings as the
preeminent valuation factor.
While it may seem obvious that strong earnings are good for stock prices,
experience warns of the dangers in giving too much
weight to only one factor. Remember that earnings were generally
disappointing during the bull market of the 1980s. In today's equity market,
the price/earnings ratio is above 20, and the dividend yield is below 3%. In
the past, such valuation levels have preceded a correction in stock prices
when interest rates rose. If rates continue to rise faster than corporate
earnings grow, market valuations should inevitably decline.
In summary, the Fund's positions should generally benefit from market
declines, interest rate increases and a weakening dollar. In addition, the
Fund will continue to hold a significant U.S. Treasury bill position until
our market view changes from that described above.
Sincerely,
Comstock Partners, Inc.
Investment Policy Committee
October 24, 1994
Jersey City, New Jersey
* Total return represents the change during the period in a
hypothetical account with dividends reinvested, without taking into
account the maximum initial sales charge in the case of Class A shares,
or the applicable contingent deferred sales charge imposed on redemptions
in the case of Class B shares.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the
reinvestment of income dividends and, where applicable, capital gain
distributions. The Standard & Poor's 500 Composite Stock Price Index is a
widely accepted unmanaged index of stock market performance.
PERFORMANCE
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS CAPITAL VALUE
FUND ( A PREMIER FUND)
CLASS A SHARES AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[EXHIBIT A]
* Source: Lipper Analytical Services, Inc.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
CLASS A CLASS B
------------------------------ ----------------------------------------
% Return Reflecting
% Return % Return Applicable Contingent
Reflecting Assuming No Deferred Sales
% Return Without Maximum Initial Redemption Charge Upon
PERIOD ENDED 9/30/94 Sales Charge Sales Charge (4.5%) PERIOD ENDED 9/30/94 Redemption*
- ------------------- ------------- ------------------ ------------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
1 Year 6.14% 1.35 % 1 Year 5.35% 1.35%
5 Years 2.53 1.59 From Inception (1/15/93) 7.25 5.01
From 4/28/87** 6.90 6.24
From Inception (10/10/85) 11.25 10.68
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of the
Dreyfus Capital Value Fund on 10/10/85 (Inception Date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock Price Index on
that date. For comparative purposes the value of the Index on 9/30/85 is used
as the beginning value on 10/10/85. All dividends and capital gain
distribution are reinvested.
The Fund's performance takes into account the maximum initial sales charge on
Class A shares and all other applicable fees and expenses. The Standard &
Poor's 500 Composite Stock Price Index is a widely accepted, unmanaged index
of overall stock market performance which does not take into account charges,
fees and other expenses. Further information relating to Fund performance is
contained in the Condensed Financial Information section of the Prospectus
and elsewhere in this report.
* Maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
** Fund changed its investment objective as of April 28, 1987. The Fund's
Average Annual Total Return since this date, taking into account the Fund's
maximum initial sales charge was 6.75% and without taking into account the
maximum initial sales charge was 7.02%.
DREYFUS CAPITAL VALUE FUND (A Premier Fund) SEPTEMBER 30, 1994
BROAD SECTOR ALLOCATION
[EXHIBIT B] [EXHIBIT C]
LONG POSITIONS STOCKS SOLD SHORT
Sector allocations in the pie chart are broader groupings than are listed in
the Report's Statement of Investments. Portfolio composition is subject to
change at any time.
ASSET ALLOCATION
<TABLE>
LONG SHORT*
<S> <C> <C> <C>
Common Stocks.................... 28.9% Common Stocks.................... 19.5%
Put Options...................... 4.0
Convertible Bonds................ 0.9
Bonds............................ 21.2
Cash Equivalents................. 45.0
-
------
100.0%
</TABLE>
* Note that the Put Options held in the long positions expand the Fund's
effective short exposure to fifty percent.
<TABLE>
TEN LARGEST POSITIONS
LONG SHORT
<S> <C> <C> <C>
German Securities; Bundesrepublik Philip Morris.................... 0.9%
Deutschland, 8.50%, 4/22/1996............... 7.9% Schering-Plough.................. 0.8
Newmont Mining................... 6.4 Dean Witter, Discover & Co....... 0.7
Austrian Securities; Republic Lilly (Eli) & Co................. 0.7
of Austria, 4.50%, 2/12/2000............... 4.7 T. Rowe Price Associates......... 0.6
Freeport-McMoRan Schwab (Charles)................. 0.6
Copper & Gold, Cl. A....................... 4.2 Quaker Oats..................... 0.6
Placer Dome................................ 3.8 Kansas City Southern Industries.. 0.6
German Securities; Bundesrepublik.......... General Mills.................... 0.6
Deutschland, 9%, 10/20/2000............... 3.2 Kellogg.......................... 0.6
American Barrick Resources....... 2.9
Homestake Mining................. 2.5
German Securities; Bundesrepublik
Deutschland, 8.875%, 12/20/2000........... 2.4
Danish Securities; Kingdom of
Denmark, 4.25%, 9/30/1999.................. 2.2
</TABLE>
All percentages shown above are based on Total Net Assets.
<TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1994
COMMON STOCKS - 28.9% SHARES VALUE
------- -------
<S> <C> <C> <C>
BASIC INDUSTRIES - 26.5%
Agriculture-.7% IMC Fertilizer Group............(a) 85,000 $3,782,500
----------
Gold Mining- 19.5% Amax Gold......................... 120,500 918,813
American Barrick Resources....... 562,200 14,968,575
Ashanti Goldfields..............(a,b) 125,000 2,515,625
Cambior.......................... 150,000 2,346,718
Hecla Mining.....................(a) 313,500 4,153,875
Homestake Mining................. 595,800 12,660,750
Newmont Gold..................... 200,000 8,750,000
Newmont Mining................... 722,400 32,508,000
Placer Dome...................... 766,400 19,255,800
Royal Oak Mines..................(a) 400,000 1,800,000
-----------
99,878,156
-----------
Metals-6.3% ASARCO............................ 35,000 1,150,625
Freeport-McMoRan Copper & Gold, Cl. A 860,000 21,500,000
Goldcorp Investments, Cl. A ..... 237,860 1,572,679
Impala Platinum Holdings, A.D.R.. 15,000 361,275
Inco............................. 165,000 4,970,625
Pegasus Gold..................... 150,000 2,475,000
-----------
32,030,204
-----------
TOTAL BASIC INDUSTRIES........... 135,690,860
============
RESTRUCTURING - 2.4%
Energy-.5% Baker Hughes...................... 150,000 2,793,750
-----------
Foods and Beverages-.4% Dole Food......................... 68,200 1,892,550
-----------
Railroads-.8% Santa Fe Pacific.................(a) 192,300 4,350,788
-----------
Retail-.7% K mart............................ 187,000 3,342,625
-----------
TOTAL RESTRUCTURING.............. 12,379,713
==========
TOTAL COMMON STOCKS
(cost $107,782,245)............ $148,070,573
============
CONTRACTS
SUBJECT
PUT OPTIONS-4.0% TO PUT
-------
Brokerage Basket;
November `94 @ $95.............(i) 130,000 $1,679,600
Japanese Yen;
December `94 @ $90............. 150,000 4,500
Standard & Poor's 500 Index Flex Options:
June `95 @ $450................ 46,500 691,688
September `95 @ $450........... 66,000 1,113,750
December `95 @ $450............ 122,000 2,272,250
Standard & Poor's 500 Index:
December `94 @ $460............ 225,500 2,311,375
December `94 @ $465............ 9,000 99,000
March `95 @ $450............... 193,500 1,983,375
June `95 @ $450................ 172,500 2,436,562
December `95 @ $450............ 71,500 1,251,250
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1994
PRINCIPAL
AMOUNT
SUBJECT
PUT OPTIONS (CONTINUED) TO PUT VALUE
-------- -------
U.S. Treasury Bonds;
6.25%, 8/15/2023:
March `95 @ $89.406..........(i) $24,700,000 $2,380,586
April `95 @ $87.406..........(i) 52,500,000 3,986,719
-----------
TOTAL PUT OPTIONS
(cost $24,797,847)............. $20,210,655
============
PRINCIPAL
CONVERTIBLE BONDS-.9% AMOUNT
_______
Retail; Pepgro, 6%
(cost $3,034,000)...............(c) $ 193,625 $ 4,550,177
===========
BONDS-21.2%
Foreign Governments: Austrian Securities;
Republic of Austria,
4.50%, 2/12/2000...........(d) $ 24,932,039 $24,104,295
Danish Securities;
Kingdom of Denmark,
4.25%, 9/30/1999...........(d) 11,650,485 11,135,534
German Securities;
Bundesrepublik Deutschland:
8.50%, 4/22/1996..........(e) 39,019,671 40,291,712
9%, 10/20/2000............(e) 15,401,483 16,544,273
8.875%, 12/20/2000........(e) 11,609,158 12,406,708
Netherlands Securities;
Netherlands Government,
7.25%, 7/15/1999..........(f) 3,742,084 3,742,084
----------
TOTAL BONDS
(cost $105,990,875)............ $108,224,606
=============
SHORT-TERM INVESTMENTS-43.3%
U.S. Treasury Bills: 4.20%, 10/6/94.................... $ 29,674,000 $ 29,656,690
4.21%, 10/13/94.................. 18,201,000 18,175,434
4.34%, 10/20/94.................. 70,766,000 70,603,943
4.35%, 10/27/94.................. 5,108,000 5,091,958
4.51%, 11/10/94.................. 342,000 340,286
4.55%, 11/25/94...............(g,h) 98,265,000 97,582,482
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $221,450,793)............ $221,450,793
=============
TOTAL INVESTMENTS (cost $463,055,760)....................................... 98.3% $502,506,804
===== =============
CASH AND RECEIVABLES (NET).................................................. 1.7% $ 8,732,936
===== =============
NET ASSETS.................................................................. 100.0% $ 511,239,740
====== =============
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Security 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 September
30, 1994, this security amounted to $2,515,625 or .5% of net assets.
(c) Denominated in South African Rand.
(d) Denominated in Swiss Francs.
(e) Denominated in German Marks.
(f) Denominated in Dutch Guilder.
(g) Partially held by broker as collateral for open short positions.
(h) Partially held by the custodian in a segregated account as
collateral for open financial futures positions.
(i) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $8,046,905, represents
approximately 1.6% of net assets:
</TABLE>
<TABLE>
ACQUISITION PURCHASE PERCENTAGE OF
PUT OPTIONS: DATE PRICE NET ASSETS VALUATION*
______ _____ ________ ______
<S> <C> <C> <C> <C>
Brokerage Basket**
November `94 @ $95....................... 11/10/93 $7.10 .33 fair value
U.S. Treasury Bonds:
6.25%, 8/15/2023 March `95@ $89.406...... 3/30/94 .06 .47 fair value
6.25%, 8/15/2023 April `95@ $87.406...... 4/8/94 .06 .78 fair value
*The valuation of these securities has been determined in good faith under the direction of the Board of Directors.
**Consists of Common Stocks of six publicly traded brokerage firms.
</TABLE>
<TABLE>
STATEMENT OF FINANCIAL FUTURES SEPTEMBER 30, 1994
MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
FINANCIAL FUTURES SOLD SHORT; CONTRACTS BY CONTRACTS EXPIRATION AT 9/30/94
______ _______ _______ _______
<S> <C> <C> <C> <C>
Standard & Poor's 500........................ 291 $(67,402,875) December `94 $1,484,100
==========
</TABLE>
See notes to financial statements.
<TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF SECURITIES SOLD SHORT SEPTEMBER 30, 1994
COMMON STOCKS-19.5% SHARES VALUE
------------- ------------
<S> <C> <C> <C>
Auto Related-.7% Breed Technologies .............. 18,000 $ 585,000
Chrysler......................... 22,000 987,250
Ford Motor....................... 40,000 1,110,000
General Motors................... 20,000 937,500
-------------
3,619,750
-------------
Consumers-6.2% Anheuser-Busch................... 5,700 289,987
Avon Products.................... 5,600 334,600
B.A.T. Industries, A.D.R......... 23,100 320,512
Bausch & Lomb.................... 11,600 452,400
Campbell Soup.................... 48,400 1,911,800
Coca-Cola........................ 53,100 2,581,988
Colgate-Palmolive................ 15,600 904,800
General Mills.................... 52,000 3,003,000
Heinz (H.J.)..................... 35,900 1,314,838
Hershey Foods.................... 40,000 1,800,000
Kellogg.......................... 50,000 2,868,750
NIKE, Cl. B...................... 10,000 588,750
PepsiCo.......................... 38,100 1,262,062
Philip Morris.................... 74,500 4,553,812
Quaker Oats...................... 40,000 3,060,000
Reebok International............. 38,900 1,390,675
Rubbermaid....................... 60,300 1,605,488
Sara Lee......................... 81,000 1,822,500
Tambrands........................ 18,000 670,500
Wrigley,(Wm), Jr................. 20,000 815,000
-------------
31,551,462
-------------
Drugs & Medical-2.3% Lilly (Eli) & Co................. 58,000 3,356,750
Merck & Co....................... 48,900 1,735,950
Schering-Plough.................. 56,000 3,976,000
Upjohn........................... 70,000 2,388,750
-------------
11,457,450
-------------
Finance-6.5% Bear Stearns..................... 116,750 1,868,000
Berkshire Hathaway............... 115 2,179,250
Chase Manhattan.................. 78,000 2,700,750
Chemical Banking................. 43,000 1,505,000
Conseco.......................... 22,000 987,250
Dean Witter, Discover & Co....... 93,000 3,499,125
First USA........................ 53,000 1,861,625
Franklin Resources............... 49,000 1,831,375
Kansas City Southern Industries......... 86,000 3,042,250
Merrill Lynch.................... 49,000 1,696,625
Morgan Stanley Group............. 31,000 1,925,875
Paine Webber Group............... 88,000 1,265,000
Salomon.......................... 67,000 2,646,500
Schwab (Charles)................. 105,000 3,110,625
T. Rowe Price Associates......... 98,000 3,283,000
-------------
33,402,250
-------------
Health Care-.1% U.S. HealthCare................. 15,000 698,437
-------------
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF SECURITIES SOLD SHORT (CONTINUED) SEPTEMBER 30, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
---------- -------------
Hotels & Motels-.2% Hospitality Franchise Systems....... 40,000 $ 1,255,000
-------------
Machinery-Construction & Material-.3% Clark Equipment..................... 19,000 1,315,750
-------------
Railroads-.5% Burlington Northern................. 52,000 2,613,000
-------------
Restaurants-.8% Lone Star Steakhouse/Saloon......... 82,500 2,093,437
Outback Steakhouse................. 74,500 2,113,938
-------------
4,207,375
-------------
Retail-1.2% Home Depot........................ 54,733 2,298,786
Staples.......................... 62,500 2,054,688
Wal-Mart Stores.................. 81,000 1,893,375
-------------
6,246,849
-------------
Technology-.2% American Power Conversion......... 47,000 942,938
-------------
Telecommunications-.5% Hong Kong Telecom, A.D.R.......... 114,000 2,294,250
-------------
TOTAL SECURITIES SOLD SHORT
(proceeds $102,879,028)........ $99,604,511
============
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $463,055,760)-see statement..................................... $502,506,804
Cash.................................................................... 1,169,679
Receivable from broker for proceeds on securities sold short............ 102,879,028
Dividends and interest receivable....................................... 4,476,125
Receivable for subscriptions to Common Stock............................ 2,638,668
Receivable for futures variation margin-Note 3(a)....................... 109,125
Prepaid expenses........................................................ 74,216
-------------
613,853,645
LIABILITIES:
Due to investment adviser............................................... $ 347,267
Due to sub-investment adviser........................................... 138,520
Securities sold short, at value
(proceeds $102,879,028)-see statement................................. 99,604,511
Payable for Common Stock redeemed....................................... 1,723,447
Payable to broker for loss on securities sold short..................... 275,119
Accrued expenses........................................................ 525,041 102,613,905
____________ _____________
NET ASSETS ................................................................ $511,239,740
============
REPRESENTED BY:
Paid-in capital......................................................... $570,082,041
Accumulated undistributed investment income-net......................... 9,771,962
Accumulated net realized (loss) on investments, securities sold short,
and foreign currency transactions....................................... (113,069,404)
Accumulated net unrealized appreciation on investments, securities sold short, and
foreign currency transactions (including $1,484,100 net unrealized appreciation on
financial futures)-Note 3(b).......................................... 44,455,141
-------------
NET ASSETS at value......................................................... $511,239,740
============
Shares of Common Stock outstanding:
Class A Shares
(200 million shares of $.01 par value authorized)..................... 33,890,302
============
Class B Shares
(200 million shares of $.01 par value authorized)..................... 9,283,752
============
NET ASSET VALUE per share:
Class A Shares
($402,708,228 / 33,890,302 shares).................................... $11.88
=======
Class B Shares
($108,531,512 / 9,283,752 shares)..................................... $11.69
=======
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1994
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest.............................................................. $16,851,878
Cash dividends (net of $61,831 foreign taxes withheld at source)...... 1,580,372
___________
TOTAL INCOME...................................................... $18,432,250
EXPENSES:
Investment advisory fee-Note 2(a)..................................... 2,118,758
Sub-investment advisory fee_Note 2(a)................................ 1,643,758
Dividends on securities sold short.................................... 1,963,950
Shareholder servicing costs-Note 2(c)................................. 1,913,663
Distribution fees (Class B shares)-Note 2(b).......................... 566,157
Prospectus and shareholders' reports.................................. 114,598
Custodian fees........................................................ 90,489
Registration fees..................................................... 85,157
Professional fees..................................................... 64,749
Directors' fees and expenses-Note 2(d)................................ 36,866
Miscellaneous......................................................... 10,935
___________
TOTAL EXPENSES.................................................... 8,609,080
____________
INVESTMENT INCOME-NET............................................. 9,823,170
____________
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3(a):
Long transactions (including options transactions and foreign
currency transactions)............................................ $ (2,349,778)
Short sale transactions............................................... (5,416,826)
Net realized (loss) on forward currency exchange contracts-Note 3(a);
Short transactions.................................................... (1,450,559)
_____________
NET REALIZED (LOSS)................................................... (9,217,163)
Net unrealized appreciation on investments, securities sold short
and foreign currency transactions (including $1,484,100 net unrealized
appreciation on financial futures)...................................... 26,168,303
___________
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 16,951,140
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $26,774,310
===========
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
__________________________
1993 1994
_______ _______
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 8,659,940 $ 9,823,170
Net realized (loss) on investments...................................... (53,300,398) (9,217,163)
Net unrealized appreciation on investments for the year................. 23,538,065 26,168,303
______________ ____________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... (21,102,393) 26,774,310
_______________ _____________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (24,015,956) (8,633,848)
Class B shares........................................................ -- (913,770)
_______________ ____________
TOTAL DIVIDENDS................................................... (24,015,956) (9,547,618)
_______________ ____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 109,775,771 116,664,797
Class B shares........................................................ 31,906,887 85,400,651
Dividends reinvested:
Class A shares........................................................ 13,132,836 4,857,514
Class B shares........................................................ -- 489,988
Cost of shares redeemed:
Class A shares........................................................ (203,749,885) (147,154,408)
Class B shares........................................................ (644,618) (8,939,968)
_______________ ______________
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS. (49,579,009) 51,318,574
_______________ ______________
TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (94,697,358) 68,545,266
NET ASSETS:
Beginning of year....................................................... 537,391,832 442,694,474
______________ ______________
End of year [including distributions in excess of investment income-net;
($3,712,318) in 1993 and undistributed investment income-net;
$9,771,962 in 1994]................................................... $442,694,474 $511,239,740
============ ============
</TABLE>
<TABLE>
SHARES
______________________________________________________________________
CLASS A CLASS B
________________________ _________________________
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
_______________________ ________________________
1993 1994 1993* 1994
_______ _______ _______ ------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 9,514,487 9,919,385 2,737,990 7,342,835
Shares issued for dividends reinvested. 1,235,490 411,308 -- 41,951
Shares redeemed........................ (17,939,682) (12,560,968) (55,064) (783,960)
------------- ------------- __________ ____________
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING.......... (7,189,705) (2,230,275) 2,682,926 6,600,826
------------- ------------- __________ ___________
* From January 15, 1993 (commencement of initial offering) to September 30,
1993.
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
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.
CLASS A CLASS B
------------------------------------------------------ ----------------------
YEAR ENDED
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
------------------------------------------------------ ----------------------
PER SHARE DATA: 1990(1) 1991 1992 1993 1994 1993(2) 1994
_______ ______ _______ ______ _______ _______ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.... $14.42 $15.08 $12.97 $12.41 $11.42 $10.58 $11.32
------- ------- _______ ______ _______ ______ ------
INVESTMENT OPERATIONS:
Investment income-net................. .89 .73 .40 .24 .24 .03 .23
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions........................ .61 (.89) (.39) (.62) .46 .71 .38
------- ------- _______ ________ ______ ______ ------
TOTAL FROM INVESTMENT OPERATIONS 1.50 (.16) .01 (.38) .70 .74 .61
------- ------- _______ _________ ______ _____ -----
-DISTRIBUTIONS:
Dividends from investment income-net.. (.84) (.99) (.57) (.61) (.24) -- (.24)
Dividends from net realized
gain on investments.................. -- (.96) -- -- -- -- --
------- ------- _______ _______ _______ _____ ------
TOTAL DISTRIBUTIONS............. (.84) (1.95) (.57) (.61) (.24) -- (.24)
------- ------- _______ _______ _______ _____ ------
Net asset value, end of year.......... $15.08 $12.97 $12.41 $11.42 $11.88 $11.32 $11.69
====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN (3) 10.53% (.70%) (.02%) (2.70%) 6.14% 6.99%(4) 5.35%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average
net assets.......................... 1.20% 1.19% 1.19% 1.23% 1.21% 1.49%(4) 1.99%
Ratio of dividends and interest on securities sold
short to average net assets......... .26% .49% .39% .45% .39% .31%(4) .40%
Ratio of net investment income to average
net assets.......................... 6.64% 5.58% 2.83% 1.94% 2.06% .83%(4) 1.39%
Portfolio Turnover Rate............... 62.84% 154.07% 344.29% 41.78% 45.57% 41.78% 45.57%
Net Assets, end of year (000's Omitted) $741,267 $755,450 $537,392 $412,316 $402,708 $30,378 $108,532
(1) Per share data restated to reflect a 100% stock dividend at the close of business on February 16, 1990.
(2) From January 15, 1993 (commencement of initial offering) to September 30, 1993.
(3) Exclusive of sales load.
(4) Not annualized.
See notes to financial statements.
</TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
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. The Dreyfus
Corporation ("Dreyfus") serves as the Fund's investment adviser. Comstock
Partners, Inc. ("Comstock Partners") serves as the Fund's sub-investment
adviser. Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
until August 24, 1994, acted as the distributor of the Fund's shares.
Effective August 24, 1994, Dreyfus became a direct subsidiary of Mellon Bank,
N. A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
The Fund offers both Class A and Class B shares. Class A shares are
subject to a sales charge imposed at the time of purchase and Class B shares
are subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within six years of purchase. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
Short-term investments are carried at amortized cost, which approximates
value. Investments denominated in foreign currencies are translated to U.S.
dollars at the prevailing rates of exchange.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
and maturities of short-term securities, sales of foreign currencies,
currency gains or losses realized on securities transactions, the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books, and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than
investments in securities at fiscal year end, resulting from changes in
exchange rate.
(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) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain, if any, 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, it is the policy of the Fund not to
distribute such gain.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In accordance with a recently adopted Statement of Position (SOP 93-02)
certain differences resulting from the classification of gains/losses
recognized on foreign currency transactions for book and tax purposes and the
recording of related distributions to shareholders have been reclassified. As
of October 1, 1993, the cumulative effect of such differences totalling
$13,157,901 was reclassified to undistributed net investment income from
undistributed net realized gains. This reclassification had no effect on net
investment income, net realized gains and net assets.
During the year ended September 30, 1994, the Fund reclassified $50,827
charged to undistributed investment income-net in prior years to paid-in
capital.
(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 Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately
$113,400,000 available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to September 30,
1994. The carryover does not include net realized securities losses from
November 1, 1993 through September 30, 1994 which are treated, for Federal
income tax purposes, as arising in fiscal 1995. If not applied, $9,100,000 of
the carryover expires in fiscal 1999, $29,800,000 expires in fiscal 2000,
$17,800,000 expires in fiscal 2001 and $56,700,000 expires in fiscal 2002.
NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACT
IONS WITH AFFILIATES:
(A) Fees payable by the Fund pursuant to the provisions of an Investment
Advisory Agreement with Dreyfus and a Sub-Investment Advisory Agreement with
Comstock Partners (together "Agreements") are payable monthly, computed on
the average daily value of the Fund's net assets at the following
annual rates:
<TABLE>
AVERAGE NET ASSETS DREYFUS COMSTOCK PARTNERS
__________________ _____________ ____________________
<S> <C> <C>
0 up to $25 million......................................... .60 of 1% .15 of 1%
$25 up to $75 million....................................... .50 of 1% .25 of 1%
$75 up to $200 million...................................... .45 of 1% .30 of 1%
$200 up to $300 million..................................... .40 of 1% .35 of 1%
In excess of $300 million................................... .375 of 1% .375 of 1%
</TABLE>
The Agreements further provide that the Fund may deduct from the fee to be
paid to Dreyfus and Comstock Partners, or Dreyfus and Comstock Partners will
bear such excess expense, to the extent required by state law, should the
Fund's aggregate expenses, exclusive of taxes, brokerage, 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), and extraordinary expenses, exceed the limitation of any state
having jurisdiction over the Fund. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement in
any full fiscal year that such expenses (exclusive of distribution expenses
and certain expenses as described above) exceed 2 1/2% of the first $30
million, 2% of the next $70 million and 1 1/2% of the excess over $100
million of the average value of the Fund's net assets in accordance with
California "blue sky" regulations. No expense reimbursement was required for
the year ended September 30, 1994.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Dreyfus Service Corporation retained $276,868 during the year ended
September 30, 1994 from commissions earned on sales of Fund shares.
Dreyfus Service Corporation retained $204,660 during the year ended
September 30, 1994 from contingent deferred sales charges imposed upon
redemptions of the Fund's Class B Shares.
(B) On August 4, 1994, Fund's shareholders approved the adoption of a new
Distribution Plan with respect to Class B shares (the "Class B Distribution
Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Class B
Distribution Plan, effective August 24, 1994, the Fund pays the Distributor
for distributing the Fund's Class B shares at an annual rate of .75 of 1% of
the value of the average daily net assets of Class B.
Prior to August 24, 1994, the Distribution Plan ("prior Class B
Distribution Plan") provided that the Fund pay Dreyfus Service Corporation at
an annual rate of .75 of 1% of the value of the Fund's Class B shares average
daily net assets, for the costs and expenses in connection with advertising,
marketing and distributing the Fund's Class B shares. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's Class B shares owned by clients of the Service Agent.
During the year ended September 30, 1994, $80,755 was charged to the Fund
pursuant to the Class B Distribution Plan and $485,402 was charged to the
Fund pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor,
at an annual rate of .25 of 1% of the value of the average daily net assets
of Class A and Class B shares for servicing shareholder accounts. 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 in respect of these services. The Distributor determines the
amount to be paid to Service Agents. For the year ended September 30, 1994,
$1,065,453 and $188,719 were charged to the Fund pursuant to the Class A and
Class B shares, respectively, pursuant to the Shareholder Service Plan.
(D) Prior to August 24, 1994 certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of Dreyfus or Comstock
Partners. Each director who is not an "affiliated person" receives an annual
fee of $4,500 and an attendance fee of $500 per meeting.
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, financial futures, forward currency exchange contracts and option
transactions during the year ended September 30, 1994:
<TABLE>
PURCHASES SALES
----------------- -------------
<S> <C> <C>
Long transactions................................................ $ 108,336,956 $114,718,175
Short sale transactions.......................................... 41,521,978 66,838,451
----------------- ---------------
TOTAL.......................................................... $ 149,858,934 $181,556,626
=================== ================
</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
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 September 30, 1994 and their related market values and proceeds are
set forth in the Statement of Securities Sold Short.
When executing forward currency exchange contracts, the Fund is obligated
to buy or sell a foreign currency at a specified rate on a certain date in
the future. With respect to sales of forward currency exchange contracts, the
Fund would incur a loss if the value of the contract increases between the
date the forward contract is open and the date the forward contract is
closed. The Fund realizes a gain if the value of the contract decreases
between those dates. With respect to purchases of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract decreases
between the date the forward contract is open and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
increases between those dates. At September 30, 1994, no forward currency
exchange contracts were outstanding.
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments (see the Statement of Financial Futures). Investments
in financial futures require the Fund to "mark to market" on a daily basis,
which reflects the change in market value of the contracts at the close of
each day's trading. Accordingly, variation margin payments are made or
received to reflect daily unrealized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments
require initial margin deposits with a custodian, which consist of cash or
cash equivalents, up to approximately 10% of the contract amount. The amount
of these deposits is determined by the exchange or Board of Trade on which
the contract is traded and is subject to change. Contracts open at September
30, 1994 and their related unrealized market appreciation are set forth in
the Statement of Financial Futures.
The Fund is engaged in trading restricted options, which are not exchange
traded. The Fund's exposure to credit risk associated with counter party
nonperformance on these investments is typically limited to the unrealized
gains inherent in such investments that are recognized in the Statement of
Assets and Liabilities.
(B) At September 30, 1994, accumulated net unrealized appeciation on
investments was $44,455,141, consisting of $60,109,023 gross unrealized
appreciation and $15,653,882 gross unrealized depreciation.
At September 30, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CAPITAL VALUE FUND (A PREMIER FUND)
We have audited the accompanying statement of assets and liabilities of
Dreyfus Capital Value Fund (A Premier Fund), including the statements of
investments, financial futures and securities sold short, as of September 30,
1994, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Capital Value Fund (A Premier Fund) at September 30,
1994, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[ERNST AND YOUNG SIGNATURE]
New York, New York
November 8, 1994
DREYFUS
CAPITAL VALUE FUND
(A Premier Fund)
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
Comstock Partners
45 Broadway
New York, NY 10006
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 107/634AR949
Capital Value Fund
(A Premier Fund)
Annual Report
September 30, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS CAPITAL VALUE FUND ( A PREMIER FUND)
CLASS A SHARES AND THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX
EXHIBIT A:
____________________________________________________
| | STANDARD | DREYFUS |
| | & POOR'S 500 | CAPITAL |
| PERIOD | COMPOSITE STOCK | VALUE FUND, |
| | PRICE INDEX * | CLASS A |
|-----------|--------------------| -----------------|
| 10/10/85 | 10,000 | 9,552 |
| 9/30/86 | 13,174 | 12,569 |
| 9/30/87 | 18,894 | 17,562 |
| 9/30/88 | 16,553 | 18,140 |
| 9/30/89 | 22,007 | 21,941 |
| 9/30/90 | 19,974 | 24,250 |
| 9/30/91 | 26,184 | 24,079 |
| 9/30/92 | 29,075 | 24,075 |
| 9/30/93 | 32,846 | 23,425 |
| 9/30/94 | 34,054 | 24,864 |
|---------------------------------------------------|
*Source: Lipper Analytical Services, Inc.
Dreyfus Capital Value Fund (A Premier Fund) September 30, 1994
Broad Sector Allocation
Long Positions
| ----------------------------------------------------------------|
| Cash Equivalents 45.0 % |
| Bonds 21.2 % |
| Gold Mining 19.5 % |
| Other Metals 6.3 % |
| Put Options 4.0 % |
| Other Common Stocks 3.1 % |
| Convertible Bonds 0.9 % |
| ----------------------------------------------------------------|
Dreyfus Capital Value Fund (A Premier Fund) September 30, 1994
Broad Sector Allocation
Stocks Sold Short
| ----------------------------------------------------------------|
| Finance 6.5 % |
| Consumers 6.2 % |
| Drugs & Medical 2.3 % |
| Retail 1.2 % |
| Other 3.3 % |
| ----------------------------------------------------------------|
