PRESIDENT'S LETTER
LETTER TO SHAREHOLDERS
Dear Shareholder:
For the six months and three months ended March 31, 1994, the Class A
shares of the Capital Value Fund posted a total return of 8.20% and 2.37%
respectively,* while the total return for the Standard & Poor's 500 Composite
Stock Price Index was -1.56% and -3.79% respectively for each of those time
periods.**
The divergence between the performance of the Fund and that of the
stock market is attributable to the very defensive positioning of the Fund's
portfolio throughout the periods. Essentially, the Fund was invested in three
broad categories: 1) approximately 50% in cash equivalents, 2) gold mining
common stocks which represented another 20% of the Fund, and 3) equity
securities sold short, augmented by options which appreciate during general
market declines. Note that the leverage inherent in the Fund's options
increases its effective total short position to over 50%, while limiting
capital exposure. The Fund also held positions in foreign bonds and a small
long equity position. During the six-month period, the foreign bonds declined
slightly, due to strength in the dollar, and the long equity positions were
flat.
For the first three months of this period, the Fund's gold positions
provided the great majority of the total return. For the next three months,
gold declined, together with the general stock market, but the short
positions and options appreciated and accounted for a majority of the
quarter's returns. We believe the recent weakness exhibited by the gold
shares is a short-term respite after their significant upward move for the
full 1993 calendar year. While some of the luster of gold appears to have been
lost, we currently believe the potential for gold over the longer term is
still very bright.
The economic conditions which have prompted us to maintain a
defensive posture in the Fund remain in place, and we believe the recent
downturn in the stock market is just the beginning of a much more protracted
decline. Our nation's excess debt burden had come to be viewed as less
onerous as interest rates declined. Now that interest rates seem to be headed
higher, the debt problem could again concern investors. Average debt
maturities have been shortened, and they have made the Federal deficit more
vulnerable to rising interest rates. Accordingly, the recent upward trend for
interest rates will put more pressure on the Government to manage its deficit
through spending cuts, tax increases, or monetization.
Even while this debt situation remains unresolved, stocks and bonds
in January of this year capped off a 12-year period of unusually high
returns. According to our calculations, the average annual compounded return
for the stock market for 12 years through 1993 was 16%, and that of the bond
market 15% for the same period. The stock market was able to achieve
comparable long-term returns only twice before in recent history, in the
1920s and in the 1950s. The bond market's compounded return for the 12-year pe
riod, as measured by return on the 30-year Treasury bond, is unprecedented.
Undoubtedly, many of the investors willing to pay today's lofty prices for
financial assets think that they will receive returns similar to those of the
last decade. History does not support such expectations.
Add to the scenario the fact that these same markets were driven up
by unsophisticated individual savers, who finally gave up on true savings
(CDs and Treasury Bills) to invest in stocks and bonds right at what we
believe is the peak in long-term historical returns and valuation levels.
These facts continually encourage us to keep the Fund invested very
defensively at this time.
Sincerely,
Comstock
Partners, Inc.
Investment Policy
Committee
April 19, 1994
Jersey City, N.J.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the maximum
initial sales charge.
** 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.
LETTER TO SHAREHOLDERS
Dear Shareholder:
For the six months and three months ended March 31, 1994, the Class B
shares of the Capital Value Fund posted a total return of 7.78% and 2.14%
respectively,* while the total return for the Standard & Poor's 500 Composite
Stock Price Index was -1.56% and -3.79% respectively for each of those time
periods.**
The divergence between the performance of the Fund and that of the
stock market is attributable to the very defensive positioning of the Fund's
portfolio throughout the periods. Essentially, the Fund was invested in three
broad categories: 1) approximately 50% in cash equivalents, 2) gold mining
common stocks which represented another 20% of the Fund, and 3) equity
securities sold short, augmented by options which appreciate during general
market declines. Note that the leverage inherent in the Fund's options
increases its effective total short position to over 50%, while limiting
capital exposure. The Fund also held positions in foreign bonds and a small
long equity position. During the six-month period, the foreign bonds declined
slightly, due to strength in the dollar, and the long equity positions were
flat.
For the first three months of this period, the Fund's gold positions
provided the great majority of the total return. For the next three months,
gold declined, together with the general stock market, but the short
positions and options appreciated and accounted for a majority of the
quarter's returns. We believe the recent weakness exhibited by the gold
shares is a short-term respite after their significant upward move for the
full 1993 calendar year. While some of the luster of gold appears to have been
lost, we currently believe the potential for gold over the longer term is
still very bright.
The economic conditions which have prompted us to maintain a
defensive posture in the Fund remain in place, and we believe the recent
downturn in the stock market is just the beginning of a much more protracted
decline. Our nation's excess debt burden had come to be viewed as less
onerous as interest rates declined. Now that interest rates seem to be headed
higher, the debt problem could again concern investors. Average debt
maturities have been shortened, and they have made the Federal deficit more
vulnerable to rising interest rates. Accordingly, the recent upward trend for
interest rates will put more pressure on the Government to manage its deficit
through spending cuts, tax increases, or monetization.
Even while this debt situation remains unresolved, stocks and bonds
in January of this year capped off a 12-year period of unusually high
returns. According to our calculations, the average annual compounded return
for the stock market for 12 years through 1993 was 16%, and that of the bond
market 15% for the same period. The stock market was able to achieve
comparable long-term returns only twice before in recent history, in the
1920s and in the 1950s. The bond market's compounded return for the 12-year pe
riod, as measured by return on the 30-year Treasury bond, is unprecedented.
Undoubtedly, many of the investors willing to pay today's lofty prices for
financial assets think that they will receive returns similar to those of the
last decade. History does not support such expectations.
Add to the scenario the fact that these same markets were driven up
by unsophisticated individual savers, who finally gave up on true savings
(CDs and Treasury Bills) to invest in stocks and bonds right at what we
believe is the peak in long-term historical returns and valuation levels.
These facts continually encourage us to keep the Fund invested very
defensively at this time.
Sincerely,
Comstock
Partners, Inc.
Investment Policy
Committee
April 19, 1994
Jersey City, N.J.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the applicable
contingent deferred sales charge imposed on redemptions.
** 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.
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS MARCH 31, 1994 (UNAUDITED)
COMMON STOCKS-30.8%
BASIC INDUSTRIES-28.5% SHARES VALUE
------------ ------------
<S> <S> <C> <C>
Agriculture-.6% IMC Fertilizer Group............................... 85,000 $ 3,357,500
------------
Forest Products-.6% Aracruz Celulose S.A., A.D.S.......................(a) 226,000 3,022,750
------------
Gold Mining-21.8% Amax Gold.......................................... 120,500 964,000
American Barrick Resources......................... 967,200 24,542,700
Cambior............................................ 150,000 2,249,728
Hecla Mining.......................................(a) 313,500 4,467,375
Homestake Mining................................... 595,800 13,405,500
Newmont Gold....................................... 200,000 9,275,000
Newmont Mining..................................... 578,800 33,208,650
Placer Dome........................................ 1,091,400 26,875,725
Royal Oak Mines....................................(a) 400,000 1,825,000
------------
116,813,678
------------
Metals-5.5% ASARCO............................................. 40,000 895,000
Freeport-McMoRan Copper & Gold, Cl. A.............. 885,259 22,684,762
Goldcorp. Investments, Cl. A....................... 237,860 1,568,926
Impala Platinum Holdings, A.D.R.................... 15,000 218,430
Inco............................................... 165,000 4,083,750
LAC Minerals....................................... 25,000 215,625
------------
29,666,493
------------
TOTAL BASIC INDUSTRIES............................. 152,860,421
============
RESTRUCTURING-2.3%
Chemicals-.2% Cabot.............................................. 18,800 1,015,200
------------
Foods and Beverages-.5% Dole Food.......................................... 85,000 2,677,500
------------
Natural Gas-.8% Tenneco............................................ 81,600 4,304,400
------------
Railroads-.8% Santa Fe Pacific................................... 192,300 4,374,825
------------
TOTAL RESTRUCTURING................................ 12,371,925
============
TOTAL COMMON STOCKS
(cost $112,554,974)............................ $165,232,346
============
PUT OPTIONS-4.4%
CONTRACTS
SUBJECT
TO PUT
------------
Brokerage Basket;
November `94 @ $95.............................(g) 130,000 $ 1,157,000
Japanese Yen;
December `94 @ $90............................. 150,000 144,000
Standard & Poor's 500 Index:
April `94 @ $425...............................(g) 102,218 19,422
May `94 @ $423.60..............................(g) 93,000 356,190
June `94 @ $425................................ 304,000 2,128,000
September `94 @ $425........................... 150,000 1,987,500
September `94 @ $450........................... 142,000 2,982,000
December `94 @ $460............................ 225,500 6,426,750
December `94 @ $465............................ 9,000 290,250
March `95 @ $450............................... 61,000 1,647,000
June `95 @ $450................................ 50,000 1,500,000
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1994 (UNAUDITED)
PUT OPTIONS (CONTINUED)
PRINCIPAL
AMOUNT
SUBJECT
TO PUT VALUE
------------ ------------
U.S. Treasury Bonds:
7.125%, 2/15/2023;
July `94 @ $107............................(g) $ 16,700,000 $ 1,560,448
6.25%, 8/15/2023:
August `94 @ $97.313.......................(g) 11,000,000 1,005,070
August `94 @ $99.844.......................(g) 8,100,000 964,406
March `95 @ $89.406........................(g) 24,700,000 1,383,694
------------
TOTAL PUT OPTIONS
(cost $22,618,984)............................. $ 23,551,730
============
CONVERTIBLE BONDS-.6%
PRINCIPAL
AMOUNT
------------
Retail Pepgro, 6%
(cost $3,034,000)..............................(b) $ 167,006 $ 3,006,110
============
BONDS-10.0%
Foreign Governments Austrian Securities;
Republic of Austria,
4.50%, 2/12/2000...........................(c) $ 10,623,229 $ 10,793,201
Danish Securities;
Kingdom of Denmark,
4.25%, 9/30/1999...........................(c) 10,623,229 10,623,229
German Securities;
Bundesrepublik Deutschland:
9%, 10/20/2000.............................(d) 14,269,495 16,312,887
8.875%, 12/20/2000.........................(d) 10,755,900 12,241,291
Netherlands Securities;
Netherlands Government,
7.25%, 7/15/1999...........................(e) 3,461,129 3,653,221
------------
TOTAL BONDS
(cost $56,221,276)............................. $ 53,623,829
============
SHORT-TERM INVESTMENTS-48.9%
U.S. Treasury Bills 2.941%, 4/07/1994.................................. $ 2,253,000 $ 2,251,896
2.935%, 4/14/1994.................................. 2,036,000 2,033,842
2.963%, 4/21/1994.................................. 15,010,000 14,985,289
3.105%, 4/28/1994.................................. 10,592,000 10,567,334
3.22%, 5/5/1994.................................... 56,599,000 56,426,863
3.26%, 5/19/1994...................................(f) 55,456,000 55,214,951
3.411%, 5/26/1994.................................. 18,390,000 18,294,081
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1994 (UNAUDITED)
SHORT-TERM INVESTMENTS (CONTINUED)
PRINCIPAL
AMOUNT VALUE
------------ ------------
U.S. Treasury Bills (continued) 3.48%, 6/16/1994............................. $102,905,000 $102,148,991
3.40%, 6/23/1994................................... 1,108,000 1,099,315
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $263,022,562)............................ $263,022,562
============
TOTAL INVESTMENTS (cost $457,451,796).......................................... 94.7% $508,436,577
====== ============
CASH AND RECEIVABLES (NET)..................................................... 5.3% $ 28,700,304
====== ============
NET ASSETS..................................................................... 100.0% $537,136,881
====== ============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Denominated in South African Rand.
(c) Denominated in Swiss Francs.
(d) Denominated in German Marks.
(e) Denominated in Dutch Guilder.
(f) Partially held by broker as collateral for open short positions.
(g) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $6,446,230, represents
approximately 1.2% of net assets:
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
DATE PRICE NET ASSETS VALUATION*
----------- -------- ------------- ----------
<S> <C> <C> <C> <C>
Brokerage Basket
November `94 @ $95..................... 11/10/93 $7.10 .22% fair value
Standard & Poor's 500 Index:
April `94 @ $425....................... 4/26/93 18.58 .00 fair value
May `94 @ $423.60...................... 5/21/93 15.38 .07 fair value
U.S. Treasury Bonds:
7.125%, 2/15/2023 July `94 @ $107...... 7/20/93 .06 .29 fair value
6.25%, 8/15/2023 August `94 @ $97.313.. 8/18/93 .04 .19 fair value
6.25%, 8/15/2023 August `94 @ $99.844.. 8/18/93 .06 .18 fair value
6.25%, 8/15/2023 March `95 @ $89.406... 3/30/94 .06 .26 fair value
* The valuation of these securities has been determined in good faith under the direction of the Board of Directors.
STATEMENT OF FINANCIAL FUTURES MARCH 31, 1994 (UNAUDITED)
MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
CONTRACTS BY CONTRACTS EXPIRATION AT 3/31/94
---------- ------------ ---------- ------------
Financial Futures Sold Short;
Standard & Poor's 500...................... 269 $(60,087,875) June `94 $2,572,200
==========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF SECURITIES SOLD SHORT MARCH 31,1994 (UNAUDITED)
COMMON STOCKS-10.9% SHARES VALUE
<S> <S> <C> <C>
Consumers_6.3% Anheuser-Busch Cos................................. 5,700 $ 302,100
Avon Products...................................... 5,600 316,400
Bausch & Lomb...................................... 11,600 545,200
Campbell Soup...................................... 48,400 1,929,950
Coca-Cola.......................................... 58,100 2,360,312
Colgate-Palmolive.................................. 15,600 902,850
General Mills...................................... 52,000 2,892,500
Gerber Products.................................... 100,000 3,062,500
Heinz (H.J.)....................................... 35,900 1,202,650
Hershey Foods...................................... 40,000 1,850,000
International Flavors & Fragrances................. 9,000 328,500
Kellogg............................................ 50,000 2,550,000
NIKE, Cl. B........................................ 10,000 530,000
PepsiCo............................................ 8,100 296,663
Philip Morris Cos.................................. 74,500 3,780,875
Quaker Oats........................................ 64,000 4,008,000
Ralston-Purina Group............................... 34,000 1,547,000
Reebok International............................... 38,900 1,332,325
Rubbermaid......................................... 60,300 1,643,175
Sara Lee........................................... 81,000 1,761,750
Tambrands.......................................... 18,000 693,000
------------
33,835,750
------------
Drugs & Medical-1.8% Lilly (Eli) & Co................................... 58,000 2,885,500
Marion Merrell Dow................................. 63,000 1,055,250
Merck & Co......................................... 48,900 1,454,775
Schering-Plough.................................... 40,000 2,250,000
Upjohn............................................. 70,000 1,898,750
------------
9,544,275
------------
Finance-1.4% Chase Manhattan.................................... 40,000 1,295,000
Chemical Banking................................... 30,000 1,091,250
Conseco............................................ 13,000 703,625
Kansas City Southern Industries.................... 54,000 2,733,750
Schwab (Chas)...................................... 70,000 1,881,250
------------
7,704,875
------------
Retail-1.2% Duty Free International............................ 15,000 217,500
Home Depot......................................... 54,733 2,230,370
Staples............................................ 82,500 2,072,812
Wal-Mart Stores.................................... 81,000 2,095,875
------------
6,616,557
------------
Telecommunications-.2% Hong Kong Telecom, A.D.R........................... 25,000 1,271,875
TOTAL SECURITIES SOLD SHORT
(proceeds $66,371,774)......................... $ 58,973,332
============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1994 (UNAUDITED)
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $457,451,796)-see statement...................................... $508,436,577
Cash....................................................................... 1,043,021
Receivable from broker for proceeds on securities sold short............... 66,371,774
Receivable for investment securities sold.................................. 15,931,504
Receivable for subscriptions to Common Stock............................... 8,445,925
Dividends and interest receivable.......................................... 1,399,685
Prepaid expenses........................................................... 109,889
------------
601,738,375
LIABILITIES:
Due to investment adviser.................................................. $ 342,986
Due to sub-investment adviser.............................................. 143,282
Securities sold short, at value
(proceeds $66,371,774)-see statement................................... 58,973,332
Payable for investment securities purchased................................ 2,022,097
Payable on forward currency exchange contracts-Note 3(a)................... 1,450,559
Payable for Common Stock redeemed.......................................... 1,106,574
Payable for futures variation margin-Note 3(a)............................. 80,700
Accrued expenses........................................................... 481,964 64,601,494
------------ ------------
NET ASSETS..................................................................... $537,136,881
============
REPRESENTED BY:
Paid-in capital............................................................ $585,155,185
Accumulated distributions in excess of investment income-net-Note 1(c)..... (9,566,728)
Accumulated net realized (loss) on investments............................. (99,406,999)
Accumulated net unrealized appreciation on investments
(including $2,572,200 net unrealized appreciation on
financial futures)-Note 3(b)........................................... 60,955,423
NET ASSETS at value............................................................ $537,136,881
============
Shares of Common Stock outstanding:
Class A Shares
(200 million shares of $.01 par value authorized)...................... 37,099,694
============
Class B Shares
(200 million shares of $.01 par value authorized)...................... 7,351,013
============
NET ASSET VALUE per share:
Class A Shares
($449,227,628 / 37,099,694 shares)..................................... $12.11
======
Class B Shares
($87,909,253 / 7,351,013 shares)....................................... $11.96
======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF OPERATIONS SIX MONTHS ENDED MARCH 31, 1994 (UNAUDITED)
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Interest............................................................... $ 6,944,444
Cash dividends (net of $30,596 foreign taxes withheld at source)....... 797,816
------------
TOTAL INCOME................................................... $ 7,742,260
EXPENSES:
Investment advisory fee-Note 2(a)...................................... 1,025,502
Sub-investment advisory fee-Note 2(a).................................. 788,653
Dividends on securities sold short..................................... 917,502
Shareholder servicing costs-Note 2(c)................................ 902,474
Distribution fees (Class B shares)-Note 2(b)........................... 200,309
Prospectus and shareholders' reports-Note 2(b)......................... 63,848
Registration fees...................................................... 51,654
Custodian fees......................................................... 41,274
Professional fees...................................................... 32,656
Directors' fees and expenses-Note 2(d)................................. 19,465
Miscellaneous.......................................................... 5,715
------------
TOTAL EXPENSES................................................. 4,049,052
------------
INVESTMENT INCOME-NET.......................................... 3,693,208
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3(a):
Long transactions (including options transactions)..................... $ (4,202,818)
Short sale transactions................................................ (3,059,283)
Net realized (loss) on forward currency exchange contracts-Note 3(a);
Short transactions..................................................... (1,450,559)
------------
NET REALIZED (LOSS).................................................... (8,712,660)
Net unrealized appreciation on investments and securities sold short
(including $2,572,200 net unrealized appreciation on financial futures) 42,668,585
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................ 33,955,925
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 37,649,133
============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31, 1994
1993 (UNAUDITED)
------------ ------------
OPERATIONS:
<S> <C> <C>
Investment income-net...................................................... $ 8,659,940 $ 3,693,208
Net realized (loss) on investments......................................... (53,300,398) (8,712,660)
Net unrealized appreciation on investments for the period.................. 23,538,065 42,668,585
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... (21,102,393) 37,649,133
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares......................................................... (24,015,956) (8,663,848)
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 82,645,421
Class B shares......................................................... 31,906,887 55,600,679
Dividends reinvested:
Class A shares......................................................... 13,132,836 4,857,794
Class B shares......................................................... _- 489,586
Cost of shares redeemed:
Class A shares......................................................... (203,749,885) (75,878,306)
Class B shares......................................................... (644,618) (1,374,282)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.. (49,579,009) 66,340,892
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ (94,697,358) 94,442,407
NET ASSETS:
Beginning of period........................................................ 537,391,832 442,694,474
------------ ------------
End of period [including distributions in excess of investment income-net:
($3,712,318) in 1993 and undistributed investment income-net;
$3,642,000 in 1994].................................................... $442,694,474 $537,136,881
============ ============
</TABLE>
<TABLE>
<CAPTION>
SHARES
------------------------------------------------------------
CLASS A CLASS B
--------------------------- ---------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31, 1994 SEPTEMBER 30, MARCH 31, 1994
1993 (UNAUDITED) 1993* (UNAUDITED)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold.................................. 9,514,487 6,998,231 2,737,990 4,744,018
Shares issued for dividends reinvested....... 1,235,490 411,331 _- 41,917
Shares redeemed.............................. (17,939,682) (6,430,445) (55,064) (117,848)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING............ (7,189,705) 979,117 2,682,926 4,668,087
============ ============ ============ ============
- - -----------------------
* From January 15, 1993 (commencement of initial offering) to September 30, 1993.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
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 period indicated. This information has been derived from
information provided in the Fund's financial statements.
CLASS A CLASS B
-----------------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
---------------------------------------------- MARCH 31, 1994 SEPTEMBER 30, MARCH 31, 1994
PER SHARE DATA: 1989(1) 1990(1) 1991 1992 1993 (UNAUDITED) 1993(2) (UNAUDITED)
------ ------ ------ ------ ------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period...... $12.68 $14.42 $15.08 $12.97 $12.41 $11.42 $10.58 $11.32
------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT
OPERATIONS:
Investment income-net..... .90 .89 .73 .40 .24 .10 .03 .28
Net realized and
unrealized gain (loss)
on investments........... 1.60 .61 (.89) (.39) (.62) .83 .71 .60
------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM
INVESTMENT
OPERATIONS............. 2.50 1.50 (.16) .01 (.38) .93 .74 .88
------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from
investment
income-net............... (.76) (.84) (.99) (.57) (.61) (.24) -- (.24)
Dividends from net
realized gain on
investments.............. -- -- (.96) -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS..... (.76) (.84) (1.95) (.57) (.61) (.24) -- (.24)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period............ $14.42 $15.08 $12.97 $12.41 $11.42 $12.11 $11.32 $11.96
====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT
RETURN (3)................ 20.95% 10.53% (.70%) (.02%) (2.70%) 8.20%(4) 6.99%(4) 7.78%(4)
RATIOS/SUPPLEMENTAL
DATA:
Ratio of operating
expenses to average
net assets............... 1.22% 1.20% 1.19% 1.19% 1.23% .60%(4) 1.49%(4) 1.01%(4)
Ratio of dividends and
interest on securities
sold short to average
net assets............... .03% .26% .49% .39% .45% .19%(4) .31%(4) .19%(4)
Ratio of net investment
income to average
net assets............... 6.93% 6.64% 5.58% 2.83% 1.94% .81%(4) .83%(4) .38%(4)
Portfolio Turnover Rate... 19.46% 62.84% 154.07% 344.29% 41.78% 18.11%(4) 41.78%(4) 18.11%(4)
Net Assets, end of
period (000's Omitted)...$607,192 $741,267 $755,450 $537,392 $412,316 $449,228 $30,378 $87,909
- - ------------------
(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 charge.
(4) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 ("Distributor"), a
wholly-owned subsidiary of Dreyfus, acts as the distributor of the Fund's
shares.
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) 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) 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.
During the period ended March 31, 1994 the Fund reclassified $50,827
charged to undistributed investment income-net to prior years to paid-in
capital.
(D) 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 provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income taxes.
The Fund has an unused capital loss carryover of approximately
$56,700,000 available for Federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to
September 30, 1993. The carryover does not include net realized
securities losses from November 1, 1992 through September 30, 1993
which are treated, for Federal income tax purposes, as arising in fiscal
1994. If not applied, $9,100,000 of the carryover expires in fiscal 1999,
$29,800,000 expires in fiscal 2000 and $17,800,000 expires in fiscal year
2001.
NOTE 2-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND
OTHER TRANSACTIONS 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:
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
AVERAGE NET ASSETS DREYFUS COMSTOCK PARTNERS
------------------ ------- -----------------
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%
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 six months ended March 31, 1994.
The Distributor retained $222,110 during the six months ended March
31, 1994 from commissions earned on sales of Fund shares.
The Distributor retained $31,557 during the six months ended March 31,
1994 from contingent deferred sales charges imposed upon redemptions of
the Fund's Class B Shares.
(B) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, the Fund pays the Distributor 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. The
Distributor may make payments to one or more Service Agents (a
securities dealer, financial institution, or other industry professional)
based on the value of the Fund's Class B shares owned by clients of the
Service Agent. During the six months ended March 31, 1994, $200,309 was
charged to the Fund pursuant to the 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 six months ended March
31, 1994, $537,949 and $66,770 were charged to the Fund pursuant to the
Class A and Class B shares, respectively, pursuant to the Shareholder
Service Plan.
(D) Certain officers and directors of the Fund are "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.
(E) On December 5, 1993, the Manager entered into an Agreement and
Plan of Merger (the "Merger Agreement") providing for the merger of the
Manager with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including receipt of certain regulatory approvals
and approvals of the stockholders of the Manager and of Mellon. The merger
is expected to occur in mid-1994, but could occur later.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's board
and shareholders before completion of the merger. Shareholder approval
will be solicited by a proxy statement.
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, forward currency exchange contracts and option
transactions during the six months ended March 31, 1994:
PURCHASES SALES
------------ --------------
Long transactions......... $43,809,855 $ 84,779,930
Short sale transactions... 26,507,859 17,674,621
------------ --------------
TOTAL................. $70,317,714 $102,454,551
============ ==============
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at current market value.
The Fund would incur a loss if the price of the security increases between
the date of the short sale and the date on which the Fund replaces the
borrowed security. The Fund would realize a gain if the price of the
security declines between those dates. Until the Fund replaces the
borrowed security, the Fund will maintain daily, a segregated account
with a broker and custodian, of cash and/or U.S. Government securities
sufficient to cover its short position. Securities sold short at March 31,
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.
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 contract 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 March 31, 1994 and their related unrealized
market appreciation (depreciation) 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 March 31, 1994, accumulated net unrealized appreciation on
investments was $60,955,423, consisting of $70,561,386 gross
unrealized appreciation and $9,605,963 gross unrealized depreciation.
At March 31, 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)
REVIEW REPORT OF ERNST & YOUNG, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
We have reviewed the accompanying statement of assets and liabilities
of Dreyfus Capital Value Fund (A Premier Fund), including the statements
of investments and securities sold short, as of March 31, 1994, and the
related statements of operations and changes in net assets and financial
highlights for the six month period ended March 31, 1994. These financial
statements and financial highlights are the responsibility of the Fund's
management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying analytical
procedures to financial data, and making inquiries of persons responsible
for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, which will be performed for the
full year with the objective of expressing an opinion regarding the
financial statements and financial highlights taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the interim financial statements and financial
highlights referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year
ended September 30, 1993 and financial highlights for each of the five
years in the period ended September 30, 1993 and in our report dated
November 8, 1993, we expressed an unqualified opinion on such statement
of changes in net assets and financial highlights.
(Ernst and Young Signature Logo)
New York, New York
May 10, 1994
(Dreyfus Logo)
Capital Value Fund
(A Premier Fund)
Semi-Annual
Report
March 31, 1994
(Dreyfus Lion "D" Logo)
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
DISTRIBUTOR
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
110 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. 634SA943
Printed in U.S.A. 107SA943
Dreyfus Capital Value Fund (A Premier Fund) March 31, 1994
Broad Sector Allocation*
Long Positions
|-----------------------------------------------------------|
|Cash Equivalents 54.2 % |
|Gold Mining 21.8 % |
|Bonds 10.0 % |
|Other Metals 5.5 % |
|Put Options 4.4 % |
|Other Common Stocks 3.5 % |
|Convertible Bonds 0.6 % |
|-----------------------------------------------------------|
Dreyfus Capital Value Fund (A Premier Fund) March 31, 1994
Broad Sector Allocation*
Stocks Sold Short
|-----------------------------------------------------------|
|Consumers 6.3 % |
|Drugs & Medical 1.8 % |
|Finance 1.4 % |
|Retail 1.2 % |
|Telecommunications 0.2 % |
|-----------------------------------------------------------|
Dreyfus Capital Value Fund (A Premier Fund) March 31, 1994
Broad Sector Allocation*
Long Positions
|-----------------------------------------------------------|
|Cash Equivalents 54.2 % |
|Gold Mining 21.8 % |
|Bonds 10.0 % |
|Other Metals 5.5 % |
|Put Options 4.4 % |
|Other Common Stocks 3.5 % |
|Convertible Bonds 0.6 % |
|-----------------------------------------------------------|
Dreyfus Capital Value Fund (A Premier Fund) March 31, 1994
Broad Sector Allocation*
Stocks Sold Short
|-----------------------------------------------------------|
|Consumers 6.3 % |
|Drugs & Medical 1.8 % |
|Finance 1.4 % |
|Retail 1.2 % |
|Telecommunications 0.2 % |
|-----------------------------------------------------------|
