File No. 33-6013
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 14 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [ X ]
Amendment No. 14 [ X ]
(Check appropriate box or boxes.)
DREYFUS STRATEGIC INVESTING
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212)
922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
X on March 1, 1995 pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new
-----
effective date for a previously filed post-effective amendment.
Registrant has registered an indefinite number of shares of
its beneficial interest under the Securities Act of 1933 pursuant
to Section 24(f) of the Investment Company Act of 1940.
Registrant's Rule 24f-2 Notice for the fiscal year ended October
31, 1994 was filed on December 28, 1994.
<PAGE>
DREYFUS STRATEGIC INVESTING
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ ______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 6
5 Management of the Fund 19
5(a) Management's Discussion of Fund's Performance
*
6 Capital Stock and Other Securities 34
7 Purchase of Securities Being Offered 20
8 Redemption or Repurchase 28
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-27
13 Investment Objectives and Policies B-2
14 Management of the Fund B-10
15 Control Persons and Principal B-11
Holders of Securities
16 Investment Advisory and Other B-14
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS STRATEGIC INVESTING
Cross-Reference Sheet Pursuant to Rule 495(a)
(continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ ____
17 Brokerage Allocation B-25
18 Capital Stock and Other Securities B-27
19 Purchase, Redemption and Pricing B-15, B-18,
of Securities Being Offered B-23
20 Tax Status *
21 Underwriters B-15
22 Calculations of Performance Data B-26
23 Financial Statements B-33
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-14
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
<PAGE>
PROSPECTUS March 1, 1995
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DREYFUS STRATEGIC INVESTING
- ----------------------------------------------------------------
Dreyfus Strategic Investing (the "Fund") is an open-end,
non-diversified, management investment company, known as a
mutual fund. Its goal is capital growth. The Fund invests
principally in common stocks of domestic issuers, as well as
securities of foreign companies and foreign governments.
Investments also may be made in convertible securities,
warrants, preferred stocks and debt securities under certain
market conditions. In addition to usual investment practices,
the Fund may use speculative investment techniques such as
short-selling, leveraging and options transactions. The Fund
also may engage in futures transactions.
You can purchase or redeem shares by telephone using
Dreyfus TeleTransfer.
The Dreyfus Corporation professionally manages the Fund's
portfolio.
By this Prospectus, Class A and Class B shares of the Fund
are being offered. 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 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, as described
herein. The Fund offers these alternatives so an investor may
choose the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the
investor expects to hold the shares and other circumstances.
----------------------------
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read
and retained for future reference.
Part B (also known as the Statement of Additional
Information), dated March 1, 1995, which may be revised from
time to time, provides a further discussion of certain areas in
this Prospectus and other matters which may be of interest to
some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference.
For a free copy, write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-1044, or call
1-800-654-6561. When telephoning, ask for Operator 666.
----------------------------
Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and are not federally
insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other agency. Mutual fund shares
involve certain investment risks, including the possible loss of
principal.
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TABLE OF CONTENTS
Page
Fee Table . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Financial Information . . . . . . . . . . . . . . . 5
Alternative Purchase Methods . . . . . . . . . . . . . . . . 7
Description of the Fund . . . . . . . . . . . . . . . . . . . 8
Management of the Fund . . . . . . . . . . . . . . . . . . . 29
How to Buy Fund Shares . . . . . . . . . . . . . . . . . . . 31
Shareholder Services . . . . . . . . . . . . . . . . . . . . 37
How to Redeem Fund Shares . . . . . . . . . . . . . . . . . . 42
Distribution Plan and Shareholder Services Plan . . . . . . . 49
Dividends, Distributions and Taxes . . . . . . . . . . . . . 49
Performance Information . . . . . . . . . . . . . . . . . . . 51
General Information . . . . . . . . . . . . . . . . . . . . . 53
- ----------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- ----------------------------------------------------------------
FEE TABLE
Class A Class B
------- -------
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.50% ._
Maximum Deferred Sales Charge Imposed
on Redemptions
(as a percentage of the amount subject
to charge) ._
4.00%
Annual Fund Operating Expenses:
(as a percentage of average daily net assets)
Management Fees .75% .75%
12b-1 Fees ._ .75%
Other Expenses .54% .58%
Total Fund Operating Expenses 1.54% 2.08%
Example:
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) except where noted, redemption
at the end of each time period:
1 Year 3 Years 5 Years 10 Years*
Class A: $60 $91 $125 $220
Class B: $61 $95 $132 $215
ASSUMING NO REDEMPTION
OF Class B SHARES: $21 $65 $112 $215
*Ten-year figures assume conversion of Class B shares to
Class A shares at end of sixth year following the date of
purchase.
- ---------------------------------------------------------------
The amounts listed in the example should not be considered
as representative of past or future expenses and actual expenses
may be greater or less than those indicated. Moreover, while
the example assumes a 5% annual return, the Fund's actual
performance will vary and may result in an actual return greater
or less than 5%.
- ----------------------------------------------------------------
The purpose of the foregoing table is to assist you in
understanding the various costs and expenses that investors will
bear, directly or indirectly, the payment of which will reduce
investors' return on an annual basis. Long-term investors in
Class B shares could pay more in 12b-1 fees than the economic
equivalent of paying a front-end sales charge. Certain Service
Agents (as defined below) may charge their clients direct fees
for effecting transactions in Fund shares; such fees are not
reflected in the foregoing table. See "Management of the Fund,"
"How to Buy Fund Shares" and "Distribution Plan and Shareholder
Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by
Ernst & Young LLP, the Fund's independent auditors, whose report
thereon appears in the Fund's Statement of Additional
Information. Further financial data and related notes are
included in the Fund's Statement of Additional Information,
available upon request.
Financial Highlights
Contained below is per share operating performance data for
a share of Beneficial Interest outstanding, total investment
return, ratios to average net assets and other supplemental data
for each indicated. The information has been derived from
information provided in the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
-------------------------------------------------------------------------------- ----------------
YEAR ENDED OCTOBER 31, PERIOD ENDED
OCTOBER 31,
1986<F1> 1987 1988 1989 1990 1991 1992 1993 1994 1993<F2> 1994
--------- -------- -------- -------- -------- -------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of period $12.50 $12.51 $15.79 $15.85 $18.73 $18.03 $22.12 $19.90 $23.77 $21.38 $23.62
INVESTMENT OPERATIONS:
Investment income (loss)-net .06 .13 1.00 .48 .31 .21 .06 .03 .01 (.07) (.04)
Net realized and unrealized
gain (loss) on investment .01 3.15 (.52) 3.70 (.35) 5.77 (.46) 3.89 (1.54) 2.31 (1.62)
TOTAL FROM INVESTMENT OPERATIONS .07 3.28 .48 4.18 (.04) 5.98 (.40) 3.92 (1.53) 2.24 (1.66)
DISTRIBUTIONS:
Dividends from investment
income-net (.06) -- (.20) (1.30) (.21) (.34) (.14) (.05) -- -- --
Dividends in excess of
investment income-net -- -- -- -- -- -- -- -- (.12) -- (.09)
Dividends from net realized
gain on investments -- -- (.22) -- (.45) (1.55) (1.68) -- (2.29) -- (2.29)
TOTAL DISTRIBUTIONS (.06) -- (.42) (1.30) (.66) (1.89) (1.82) (.05) (2.41) -- (2.38)
Net asset value, end of period $12.51 $15.79 $15.85 $18.73 $18.03 $22.12 $19.90 $23.77 $19.83 $23.62 $19.58
TOTAL INVESTMENT RETURN<F1>: .31%(4) 26.22% 2.88% 28.59% (.31%) 36.50% (2.04%) 19.71% (6.92%) 10.48%(4)(7.58%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses
to average net assets -- 1.59% 1.48% 1.50% 1.50% 1.35% 1.30% 1.27% 1.29% 1.65%(4) 1.84%
Ratio of interest expense,
loan commitment fees and
dividends on securities sold
short to average net assets -- .32% .60% .59% 1.39% .58% .38% .47% .25% .44%(4) .24%
Ratio of net investment income
(loss) to average net assets .50%<F4> 1.14% 5.71% 2.63% 1.66% 1.07% .22% .16% .04% (.69%)(4)(.61%)
Decrease reflected in above
expense ratios due to
expense limitation 1.04%<F4> .10% .19% .29% .08% -- -- -- -- -- --
Portfolio Turnover Rate -- 321.23% 167.64% 228.12% 275.33% 207.10% 204.73% 237.14% 199.13% 237.14%199.13%
Net Assets, end of period
(000's Omitted) $1,145 $111,896 $104,772 $106,180 $102,421 $145,717 $243,148 $276,022 $239,407 $25,833 $40,864
--------- -------- -------- -------- -------- -------- -------- -------- -------- ------- -------
</TABLE>
_______________________
[FN] From October 1, 1986 (commencement of operations to
October 31, 1986.
[FN] From January 15, 1993 (commencement of initial offering) to
October 31, 1993.
[FN] Exclusive of sales charge.
[FN] Not annualized.
<PAGE>
<TABLE>
<CAPTION>
Debt Outstanding
DEBT OUTSTANDING
Year Ended October 31,
--------------------------------------------------------------------------------
1986<F1> 1987 1988 1989 1990 1991 1992 1993 1994
------- ------ ----- ------- ------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Amount of debt outstanding at end of year
(in thousands) -- -- -- $18,350 $ 9,020 $23,994 $23,300 $35,100 --
Average amount of debt outstanding throughout year
(in thousands)<F2> -- $2,513 $6,145 $ 4,843 $10,388 $12,882 $ 5,102 $16,419 $11,097
Average number of shares outstanding throughout year
(in thousands)<F3> -- 5,193 7,102 6,161 5,807 6,244 10,058 12,321 14,337
Average amount of debt per share throughout year -- $ .48 $ .87 $ .79 $ 1.79 $ .46 $ .51 $ 1.33 $ .77
</TABLE>
_______________________
[FN] From October 1, 1986 (commencement of operations) to
October 31, 1986.
[FN] Based upon daily outstanding borrowings.
[FN] Based upon month-end balances.
<PAGE>
Further information about the Fund's performance is
contained in the Fund's annual report which may be obtained
without charge by writing to the address or call the number set
forth on the cover page of this Prospectus.
ALTERNATIVE PURCHASE METHODS
The Fund offers you two methods of purchasing Fund shares;
you may choose the Class of shares that best suits your needs,
given the amount of your purchase, the length of time you expect
to hold your shares and any other relevant circumstances. Each
Class A and Class B share represents an identical pro rata
interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 4.50% of the public offering
price imposed at the time of purchase. The initial sales charge
may be reduced or waived for certain purchases. See "How to Buy
Fund Shares--Class A Shares." These shares are subject to an
annual service fee at the rate of .25 of 1% of the value of the
average daily net assets of Class A. See "Distribution Plan and
Shareholder Services Plan--Shareholder Services Plan."
Class B shares are sold at net asset value per share with
no initial sales charge at the time of purchase; as a result,
the entire purchase price is immediately invested in the Fund.
Class B shares are subject to a maximum 4% contingent deferred
sales charge ("CDSC"), which is assessed only if you redeem
Class B shares within six years of purchase. See "How to Buy
Fund Shares--Class B Shares" and "How to Redeem Fund
Shares--Contingent Deferred Sales Charge--Class B Shares." These
shares also are subject to an annual service fee at the rate of
.25 of 1% of the value of the average daily net assets of
Class B. In addition, Class B shares are subject to an annual
distribution fee at the rate of .75 of 1% of the value of the
average daily net assets of Class B. See "Distribution Plan and
Shareholder Services Plan." The distribution fee paid by Class B
will cause such class to have a higher expense ratio and to pay
lower dividends than Class A. Approximately six years after the
date of purchase, Class B shares automatically will convert to
Class A shares, based on the relative net asset values for
shares of each class, and will no longer be subject to the
distribution fee. Class B shares that have been acquired
through the reinvestment of dividends and distributions will be
converted on a pro rata basis together with other Class B
shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares
not acquired through the reinvestment of dividends and
distributions.
The decision as to which Class of shares is more beneficial
to you depends upon the amount and intended length of your
investment. You should consider whether, during the anticipated
life of your investment in the Fund, the accumulated
distribution fee and CDSC on Class B shares prior to conversion
would be less than the initial sales charge on Class A shares
purchased at the same time, and to what extent, if any, such
differential would be offset by the return of Class A. In this
regard, investors qualifying for reduced initial sales charges
who expect to maintain their investment for an extended period
of time might consider purchasing Class A shares because the
accumulated continuing distribution fees on Class B shares may
exceed the initial sales charge on Class A shares during the
life of the investment. Generally, Class A shares may be more
appropriate for investors who invest $100,000 or more in Fund
shares.
DESCRIPTION OF THE FUND
Investment Objective -- The Fund's goal is to provide you with
capital growth. The Fund's investment objective cannot be
changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. There can be no assurance that the
Fund's investment objective will be achieved.
Management Policies -- The Fund invests principally in publicly
issued common stocks. There are no limitations on the type,
size, operating history or dividend paying record of companies
or industries in which the Fund may invest, the principal
criteria for investment being that the securities provide
opportunities for capital growth. The Fund may invest up to 30%
of the value of its assets in the common stocks of foreign
companies which are not publicly traded in the United States and
the debt securities of foreign governments. The Fund may invest
in convertible securities, preferred stocks and debt securities
without limitation when management believes that such securities
offer opportunities for capital growth. The debt securities in
which the Fund may invest must be rated at least Caa by Moody's
Investors Service, Inc. ("Moody's") or CCC by Standard & Poor's
Corporation ("Standard & Poor's") or if unrated, deemed to be of
comparable quality by The Dreyfus Corporation. Debt securities
rated Caa by Moody's or CCC by Standard & Poor's are considered
to have predominantly speculative characteristics with respect
to capacity to pay interest and repay principal and to be of
poor standing. See "Risk Factors--Lower Rated Securities" below
for a discussion of certain risks.
The Fund's policy is to purchase marketable securities
which are not restricted as to public sale, subject to the
limited exception set forth under "Certain Portfolio
Securities--Illiquid Securities" below. The Fund will be alert
to favorable arbitrage opportunities resulting from special
situations such as those arising from corporate takeovers. When
management believes it desirable, typically when it believes
that common stocks are a less attractive investment alternative
and a temporary defensive position is advisable, the Fund may
invest in higher-rated corporate bonds (i.e., debt securities of
corporate issuers), U.S. Government securities, repurchase
agreements, time deposits, certificates of deposit, bankers'
acceptances and commercial paper.
In an effort to increase its total return, the Fund may
engage in various investment techniques which, if successful,
would produce short-term capital gains. The use of investment
techniques and instruments such as leveraging, short-selling,
options and futures transactions, currency transactions and
lending of portfolio securities involves greater risk than that
incurred by many other funds. Using these techniques may
produce higher than normal portfolio turnover which usually
generates additional brokerage commissions and expenses for the
Fund. You should purchase Fund shares only as a supplement to
an overall investment program and only if you are willing to
undertake the risks involved.
Investment Techniques
The Fund may engage in various investment techniques, such
as leveraging, short-selling, foreign exchange transactions,
options and futures transactions and lending portfolio
securities, each of which involves risk. See "Risk Factors"
below. Options and futures transactions involve so-called
"derivative securities."
Leverage Through Borrowing
The Fund may borrow for investment purposes. This
borrowing, which is known as leveraging, generally will be
unsecured, except to the extent the Fund enters into reverse
repurchase agreements described below. The Investment Company
Act of 1940 requires the Fund to maintain continuous asset
coverage (that is, total assets including borrowings, less
liabilities exclusive of borrowings) of 300% of the amount
borrowed. If the 300% asset coverage should decline as a result
of market fluctuations or other reasons, the Fund may be
required to sell some of its portfolio holdings within three
days to reduce the debt and restore the 300% asset coverage,
even though it may be disadvantageous from an investment
standpoint to sell securities at that time. Leveraging may
exaggerate the effect on net asset value of any increase or
decrease in the market value of the Fund's portfolio. Money
borrowed for leveraging will be subject to interest costs which
may or may not be recovered by appreciation of the securities
purchased. The Fund also may be required to maintain minimum
average balances in connection with such borrowing or to pay a
commitment or other fee to maintain a line of credit; either of
these requirements would increase the cost of borrowing over the
stated interest rate.
Among the forms of borrowing in which the Fund may engage
is the entry into reverse repurchase agreements with banks,
brokers or dealers. These transactions involve the transfer by
the Fund of an underlying debt instrument in return for cash
proceeds based on a percentage of the value of the security.
The Fund retains the right to receive interest and principal
payments on the security. At an agreed upon future date, the
Fund repurchases the security at principal, plus accrued
interest. In certain types of agreements, there is no agreed
upon repurchase date and interest payments are calculated daily,
often based on the prevailing overnight repurchase rate. The
Fund will maintain in a segregated custodial account cash, cash
equivalents or U.S. Government securities or other high quality
liquid debt securities at least equal to the aggregate amount of
its reverse repurchase obligations, plus accrued interest, in
certain cases, in accordance with releases promulgated by the
Securities and Exchange Commission. The Securities and Exchange
Commission views reverse repurchase transactions as
collateralized borrowings by the Fund. These agreements, which
are treated as if reestablished each day, are expected to
provide the Fund with a flexible borrowing tool.
Short-Selling
The Fund may make short sales, which are transactions in
which the Fund sells a security it does not own in anticipation
of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund then is obligated to replace
the security borrowed by purchasing it at the market price at
the time of replacement. The price at such time may be more or
less than the price at which the security was sold by the Fund.
Until the security is replaced, the Fund is required to pay to
the lender amounts equal to any dividends or interest which
accrue during the period of the loan. To borrow the security,
the Fund also may be required to pay a premium, which would
increase the cost of the security sold. The proceeds of the
short sale will be retained by the broker, to the extent
necessary to meet margin requirements, until the short position
is closed out.
Until the Fund closes its short position or replaces the
borrowed security, the Fund will: (a) maintain a segregated
account, containing cash or U.S. Government securities, at such
a level that (i) the amount deposited in the account plus the
amount deposited with the broker as collateral will equal the
current value of the security sold short and (ii) the amount
deposited in the segregated account plus the amount deposited
with the broker as collateral will not be less than the market
value of the security at the time it was sold short; or (b)
otherwise cover its short position.
The Fund will incur a loss as a result of the short sale 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 will realize a gain if the security declines
in price between those dates. This result is the opposite of
what one would expect from a cash purchase of a long position in
a security. The amount of any gain will be decreased, and the
amount of any loss increased, by the amount of any premium or
amounts in lieu of dividends or interest the Fund may be
required to pay in connection with a short sale.
The Fund may purchase call options to provide a hedge
against an increase in the price of a security sold short by the
Fund. When the Fund purchases a call option it has to pay a
premium to the person writing the option and a commission to the
broker selling the option. If the option is exercised by the
Fund, the premium and the commission paid may be more than the
amount of the brokerage commission charged if the security were
to be purchased directly. See "Call and Put Options on Specific
Securities" below.
The Fund anticipates that the frequency of short sales will
vary substantially under different market conditions, and it
does not intend that any specified portion of its assets as a
matter of practice will be in short sales. However, no
securities will be sold short if, after effect is given to any
such short sale, the total market value of all securities sold
short would exceed 25% of the value of the Fund's net assets.The
Fund may not sell short the securities of any single issuer
listed on a national securities exchange to the extent of more
than 5% of the value of the Fund's net assets. The Fund may not
sell short the securities of any class of an issuer to the
extent, at the time of transaction, of more than 5% of the
outstanding securities of that class.
In addition to the short sales discussed above, the Fund
may make short sales "against the box," a transaction in which
the Fund enters into a short sale of a security which the Fund
owns. The proceeds of the short sale are held by a broker until
the settlement date at which time the Fund delivers the security
to close the short position. The Fund receives the net proceeds
from the short sale. The Fund at no time will have more than
15% of the value of its net assets in deposits on short sales
against the box.
Call and Put Options on Specific Securities
The Fund may invest up to 5% of its assets, represented by
the premium paid, in the purchase of call and put options in
respect of specific securities (or groups or "baskets" of
specific securities). The Fund may write covered call and put
option contracts to the extent of 20% of the value of its net
assets at the time such option contracts are written. A call
option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security or
securities at the exercise price at any time during the option
period. Conversely, a put option gives the purchaser of the
option the right to sell, and obligates the writer to buy, the
underlying security or securities at the exercise price at any
time during the option period. A covered call option sold by
the Fund, which is a call option with respect to which the Fund
owns the underlying security or securities, exposes the Fund
during the term of the option to possible loss of opportunity to
realize appreciation in the market price of the underlying
security or securities or to possible continued holding of a
security or securities which might otherwise have been sold to
protect against depreciation in the market price thereof. A
covered put option sold by the Fund exposes the Fund during the
term of the option to a decline in price of the underlying
security or securities. A put option sold by the Fund is
covered when, among other things, cash or liquid securities are
placed in a segregated account with the Fund's custodian to
fulfill the obligation undertaken.
To close out a position when writing covered options, the
Fund may make a "closing purchase transaction," which involves
purchasing an option on the same security or securities with the
same exercise price and expiration date as the option which it
has previously written. To close out a position as a purchaser
of an option, the Fund may make a "closing sale transaction,"
which involves liquidating the Fund's position by selling the
option previously purchased. The Fund will realize a profit or
loss from a closing purchase or sale transaction depending upon
the difference between the amount paid to purchase an option and
the amount received from the sale thereof.
The Fund intends to treat options in respect of specific
securities that are not traded on a national securities exchange
and the securities underlying covered call options written by
the Fund as illiquid.
The Fund will purchase options only to the extent permitted
by the policies of state securities authorities in states where
shares of the Fund are qualified for offer and sale.
Stock Index Options
The Fund may purchase and write put and call options on
stock indexes listed on national securities exchanges or traded
in the over-the-counter market as an investment vehicle for the
purpose of realizing its investment objective or for the purpose
of hedging its portfolio. A stock index fluctuates with changes
in the market values of the stocks included in the index.
The effectiveness of purchasing or writing stock index
options will depend upon the extent to which price movements in
the Fund's portfolio correlate with price movements of the stock
index selected. Because the value of an index option depends
upon movements in the level of the index rather than the price
of a particular stock, whether the Fund will realize a gain or
loss from the purchase or writing of options on an index depends
upon movements in the level of stock prices in the stock market
generally or, in the case of certain indexes, in an industry or
market segment, rather than movements in the price of a
particular stock. Accordingly, successful use by the Fund of
options on stock indexes will be subject to The Dreyfus
Corporation's ability to predict correctly movements in the
direction of the stock market generally or of a particular
industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.
When the Fund writes an option on a stock index, the Fund
will place in a segregated account with its custodian cash or
liquid securities in an amount at least equal to the market
value of the underlying stock index and will maintain the
account while the option is open or will otherwise cover the
transaction.
Futures Transactions -- In General
The Fund is not a commodity pool. However, as a substitute
for a comparable market position in the underlying securities
and for hedging purposes, the Fund may engage in futures and
options on futures transactions, as described below.
The Fund may trade futures contracts and options on futures
contracts in U.S. domestic markets, such as the Chicago Board of
Trade and the International Monetary Market of the Chicago
Mercantile Exchange, or, to the extent permitted under
applicable law, on exchanges located outside the United States,
such as the London International Financial Futures Exchange and
the Sydney Futures Exchange Limited. Foreign markets may offer
advantages such as trading in commodities that are not currently
traded in the United States or arbitrage possibilities not
available in the United States. Foreign markets, however, may
have greater risk potential than domestic markets. See "Risk
Factors--Foreign Commodity Transactions" below.
The Fund's commodities transactions must constitute bona
fide hedging or other permissible transactions pursuant to
regulations promulgated by the Commodity Futures Trading
Commission (the "CFTC"). In addition, the Fund may not engage
in such transactions if the sum of the amount of initial margin
deposits and premiums paid for unexpired commodity options,
other than for bona fide hedging transactions, would exceed 5%
of the liquidation value of the Fund's assets, after taking into
account unrealized profits and unrealized losses on such
contracts it has entered into; provided, however, that in the
case of an option that is in-the-money at the time of purchase,
the in-the-money amount may be excluded in calculating the 5%.
Pursuant to regulations and or published positions of the
Securities and Exchange Commission, the Fund may be required to
segregate cash or high quality money market instruments in
connection with its commodities transactions in an amount
generally equal to the value of the underlying commodity. The
segregation of such assets will have the effect of limiting the
Fund's ability to otherwise invest those assets. To the extent
the Fund engages in the use of futures and options of futures
for other than bona fide purposes, the Fund may be subject to
additional risk.
Initially, when purchasing or selling futures contracts the
Fund will be required to deposit with its custodian in the
broker's name an amount of cash or cash equivalents up to
approximately 10% of the contract amount. This amount is
subject to change by the exchange or board of trade on which the
contract is traded and members of such exchange or board of
trade may impose their own higher requirements. This amount is
known as "initial margin" and is in the nature of a performance
bond or good faith deposit on the contract which is returned to
the Fund upon termination of the futures position, assuming all
contractual obligations have been satisfied. Subsequent
payments, known as "variation margin," to and from the broker
will be made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and
short positions in the futures contract more or less valuable, a
process known as "marking-to-market." At any time prior to the
expiration of a futures contract, the Fund may elect to close
the position by taking an opposite position at the then
prevailing price, which will operate to terminate the Fund's
existing position in the contract.
Although the Fund intends to purchase or sell futures
contracts only if there is an active market for such contracts,
no assurance can be given that a liquid market will exist for
any particular contract at any particular time. Many futures
exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading
day. Once the daily limit has been reached in a particular
contract, no trades may be made that day at a price beyond that
limit or trading may be suspended for specified periods during
the day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and
potentially subjecting the Fund to substantial losses. If it is
not possible or the Fund determines not to close a futures
position in anticipation of adverse price movements, the Fund
will be required to make daily cash payments of variation
margin. In such circumstances, an increase in the value of the
portion of the portfolio being hedged, if any, may offset
partially or completely losses on the futures contract.
However, no assurance can be given that the price of the
securities being hedged will correlate with the price movements
in a futures contract and thus provide an offset to losses on
the futures contract.
In addition, to the extent the Fund is engaging in a
futures transaction as a hedging device, due to the risk of an
imperfect correlation between securities in the Fund's portfolio
that are the subject of a hedging transaction and the futures
contract used as a hedging device, it is possible that the hedge
will not be fully effective in that, for example, losses on the
portfolio securities may be in excess of gains on the futures
contract or losses on the futures contract may be in excess of
gains on the portfolio securities that were the subject of the
hedge. In futures contracts based on indexes, the risk of
imperfect correlation increases as the composition of the Fund's
portfolio varies from the composition of the index. In an
effort to compensate for the imperfect correlation of movements
in the price of the securities being hedged and movements in the
price of futures contracts, the Fund may buy or sell futures
contracts in a greater or lesser dollar amount than the dollar
amount of the securities being hedged if the historical
volatility of the futures contract has been less or greater than
that of the securities. Such "over hedging" or "under hedging"
may adversely affect the Fund's net investment results if market
movements are not as anticipated when the hedge is established.
Successful use of futures by the Fund also is subject to
The Dreyfus Corporation's ability to predict correctly movements
in the direction of the market or interest rates. For example,
if the Fund has hedged against the possibility of a decline in
the market adversely affecting the value of securities held in
its portfolio and prices increase instead, the Fund will lose
part or all of the benefit of the increased value of securities
which it has hedged because it will have offsetting losses in
its futures positions. In addition, in such situations, if the
Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. Such sales of
securities may, but will not necessarily, be at increased prices
which reflect the rising market. The Fund may have to sell
securities at a time when it may be disadvantageous to do so.
An option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a position in a
futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise
price at any time during the option exercise period. The writer
of the option is required upon exercise to assume an offsetting
futures position (a short position if the option is a call and a
long position if the option is a put). Upon exercise of the
option, the assumption of offsetting futures positions by the
writer and holder of the option will be accompanied by delivery
of the accumulated cash balance in the writer's futures margin
account which represents the amount by which the market price of
the futures contract, at exercise, exceeds, in the case of a
call, or is less than, in the case of a put, the exercise price
of the option on the futures contract.
Call options sold by the Fund with respect to futures
contracts will be covered by, among other things, entering into
a long position in the same contract at a price no higher than
the strike price of the call option, or by ownership of the
instruments underlying, or instruments the prices of which are
expected to move relatively consistently with the instruments
underlying, the futures contract. Put options sold by the Fund
with respect to futures contracts will be covered in the same
manner as put options on specific securities as described above.
Stock Index Futures and Options on Stock Index Futures -- The
Fund may purchase and sell stock index futures contracts and
options on stock index futures contracts.
A stock index future obligates the seller to deliver (and
the purchaser to take) an amount of cash equal to a specific
dollar amount times the difference between the value of a
specific stock index at the close of the last trading day of the
contract and the price at which the agreement is made. No
physical delivery of the underlying stocks in the index is made.
With respect to stock indexes that are permitted investments,
the Fund intends to purchase and sell futures contracts on the
stock index for which it can obtain the best price with
consideration also given to liquidity.
The Fund may use stock index futures as a substitute for a
comparable market position in the underlying securities.
There can be no assurance of the Fund's successful use of
stock index futures as a hedging device. In addition to the
possibility that there may be an imperfect correlation, or no
correlation at all, between movements in the stock index future
and the portion of the portfolio being hedged, the price of
stock index futures may not correlate perfectly with the
movement in the stock index because of certain market
distortions. First, all participants in the futures market are
subject to margin deposit and maintenance requirements. Rather
than meeting additional margin deposit requirements, investors
may close futures contracts through offsetting transactions
which would distort the normal relationship between the stock
index and futures markets. Secondly, from the point of view of
speculators, the deposit requirements in the futures market are
less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures
market also may cause temporary price distortions. Because of
the possibility of price distortions in the futures market and
the imperfect correlation between movements in the stock index
and movements in the price of stock index futures, a correct
forecast of general market trends by The Dreyfus Corporation
still may not result in a successful hedging transaction.
Interest Rate Futures Contracts and Options on Interest Rate
Futures Contracts -- The Fund may invest in interest rate
futures contracts and options on interest rate futures contracts
as a substitute for a comparable market position and to hedge
against adverse movements in interest rates.
To the extent the Fund has invested in interest rate future
contracts or options on interest rate futures contracts as a
substitute for a comparable market position, the Fund will be
subject to the investment risks of having purchased the
securities underlying the contracts.
The Fund may purchase call options on interest rate futures
contracts to hedge against decline in interest rates and may
purchase put options on interest rate futures contracts to hedge
its portfolio securities against the risk of rising interest
rates.
The Fund may sell call options on interest rate futures
contracts to partially hedge against declining prices of
portfolio securities. If the futures price at expiration of the
option is below the exercise price, the Fund will retain the
full amount of the option premium which provides a partial hedge
against any decline that may have occurred in the Fund's
portfolio holdings. The Fund may sell put options on interest
rate futures contracts to hedge against increasing prices of the
securities which are deliverable upon exercise of the futures
contract. If the futures price at expiration of the option is
higher than the exercise price, the Fund will retain the full
amount of the option premium which provides a partial hedge
against any increase in the price of securities which the Fund
intends to purchase. If a put or call option sold by the Fund
is exercised, the Fund will incur a loss which will be reduced
by the amount of the premium it receives. Depending on the
degree of correlation between changes in the value of its
portfolio securities and changes in the value of its futures
positions, the Fund's losses from existing options on futures
may to some extent be reduced or increased by changes in the
value of its portfolio securities.
The Fund also may sell options on interest rate futures
contracts as part of closing purchase transactions to terminate
its options positions. No assurance can be given that such
closing transactions can be effected or that there will be a
correlation between price movements in the options on interest
rate futures and price movements in the Fund's portfolio
securities which are the subject of the hedge. In addition, the
Fund's purchase of such options will be based upon predictions
as to anticipated interest rate trends, which could prove to be
inaccurate.
Currency Futures
The Fund may purchase and sell currency futures contracts.
By selling foreign currency futures, the Fund can establish the
number of U.S. dollars it will receive in the delivery month for
a certain amount of a foreign currency. In this way, if the
Fund anticipates a decline of a foreign currency against the
U.S. dollar, the Fund can attempt to fix the U.S. dollar value
of some or all of the securities held in its portfolio that are
denominated in that currency. By purchasing foreign currency
futures, the Fund can establish the number of dollars it will be
required to pay for a specified amount of a foreign currency in
the delivery month. Thus, if the Fund intends to buy securities
in the future and expects the U.S. dollar to decline against the
relevant foreign currency during the period before the purchase
is effected, the Fund can attempt to fix the price in U.S.
dollars of the securities it intends to acquire.
Foreign Currency Transactions
The Fund may engage in currency exchange transactions
either on a spot (i.e., cash) basis at the rate prevailing in
the currency exchange market, or through entering into forward
contracts to purchase or sell currencies. A forward currency
exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which must be more than two
days from the date of the contract, at a price set at the time
of the contract. These contracts are entered into in the
interbank market conducted directly between currency traders
(typically commercial banks or other financial institutions) and
their customers.
Options on Foreign Currency
The Fund may purchase and sell call and put options on
foreign currency for the purpose of hedging against changes in
future currency exchange rates. Call options convey the right
to buy the underlying currency at a price which is expected to
be lower than the spot price of the currency at the time the
option expires. Put options convey the right to sell the
underlying currency at a price which is anticipated to be higher
than the spot price of the currency at the time the option
expires. The Fund may use foreign currency options under the
same circumstances that it could use currency forward and
futures transactions as described above. See also "Call and Put
Options on Specific Securities" above.
Options on Swaps
The Fund may purchase cash-settled options on interest rate
swaps, interest rate swaps denominated in foreign currency and
equity index swaps in pursuit of its investment objective.
Interest rate swaps involve the exchange by the Fund with
another party of their respective commitments to pay or receive
interest (for example, an exchange of floating-rate payments for
fixed-rate payments) denominated in U.S. dollars or foreign
currency. Equity index swaps involve the exchange by the Fund
with another party of cash flows based upon the performance of
an index or a portion of an index of securities which usually
include dividends. A cash-settled option on a swap gives the
purchaser the right, but not the obligation, in return for the
premium paid, to receive an amount of cash equal to the value of
the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions
from financial institutions, including securities brokerage
firms.
Lending Portfolio Securities
From time to time, the Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions
needing to borrow securities to complete certain transactions.
Such loans may not exceed 331/3% of the value of the Fund's
total assets. In connection with such loans, the Fund will
receive collateral consisting of cash, U.S. Government
securities or irrevocable letters of credit which will be
maintained at all times in an amount equal to at least 100% of
the current market value of the loaned securities. The Fund can
increase its income through the investment of such collateral.
The Fund continues to be entitled to payments in amounts equal
to the interest, dividends or other distributions payable on the
loaned security and receives interest on the amount of the loan.
Such loans will be terminable at any time upon specified notice.
The Fund might experience risk of loss if the institution with
which it has engaged in a portfolio loan transaction breaches
its agreement with the Fund.
Future Developments
The Fund may take advantage of opportunities in the area of
options and futures contracts and options on futures contracts
and any other derivative investment which are not presently
contemplated for use by the Fund or which are not currently
available but which may be developed, to the extent such
opportunities are both consistent with the Fund's investment
objective and legally permissible for the Fund. Before entering
into such transactions or making any such investment, the Fund
will provide appropriate disclosure in its prospectus.
Certain Portfolio Securities
Convertible Securities
A convertible security is a fixed-income security that may
be converted at either a stated price or stated rate into
underlying shares of common stock. Convertible securities have
general characteristics similar to both fixed-income and equity
securities. Although to a lesser extent than with fixed-income
securities generally, the market value of convertible securities
tends to decline as interest rates increase and, conversely,
tends to increase as interest rates decline. In addition,
because of the conversion feature, the market value of
convertible securities tends to vary with fluctuations in the
market value of the underlying common stock, and therefore, also
will react to variations in the general market for equity
securities. A unique feature of convertible securities is that
as the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield
basis, and so may not experience market value declines to the
same extent as the underlying common stock. When the market
price of the underlying common stock increases, the prices of
the convertible securities tend to rise as a reflection of the
value of the underlying common stock. While no securities
investments are without risk, investments in convertible
securities generally entail less risk than investments in common
stock of the same issuer.
As fixed-income securities, convertible securities are
investments that provide for a stable stream of income with
generally higher yields than common stocks. Of course, like all
fixed-income securities, there can be no assurance of current
income because the issuers of the convertible securities may
default on their obligations. Convertible securities, however,
generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the
potential for capital appreciation. A convertible security, in
addition to providing fixed income, offers the potential for
capital appreciation through the conversion feature, which
enables the holder to benefit from increases in the market price
of the underlying common stock. There can be no assurance of
capital appreciation, however, because securities prices
fluctuate.
Convertible securities generally are subordinated to other
similar but non-convertible securities of the same issuer,
although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and
convertible preferred stock is senior to common stock, of the
same issuer. Because of the subordination feature, however,
convertible securities typically have lower ratings than similar
non-convertible securities.
Warrants
The Fund may invest up to 2% of its net assets in warrants,
except that this limitation does not apply to warrants acquired
in units or attached to securities. A warrant is an instrument
issued by a corporation which gives the holder the right to
subscribe to a specified amount of the corporation's capital
stock at a set price for a specified period of time.
U.S. Government Securities
Securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and
times of issuance. Treasury Bills have initial maturities of
one year or less; Treasury Notes have initial maturities of one
to ten years; and Treasury Bonds generally have initial
maturities of greater than ten years. Some obligations issued
or guaranteed by U.S. Government agencies and instrumentalities,
for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the
Federal Home Loan Banks, by the right of the issuer to borrow
from the Treasury; others, such as those issued by the Federal
National Mortgage Association, by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may
fluctuate based on generally recognized reference rates or the
relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies and
instrumentalities, no assurance can be given that it will always
do so since it is not so obligated by law. The Fund will invest
in such securities only when it is satisfied that the credit
risk with respect to the issuer is minimal.
Zero Coupon U.S. Treasury Securities
The Fund may invest in zero coupon U.S. Treasury
securities, which are Treasury Notes and Bonds that have been
stripped of their unmatured interest coupons, the coupons
themselves and receipts or certificates representing interests
in such stripped debt obligations and coupons. The Fund also
may invest in zero coupon securities issued by corporations and
financial institutions which constitute a proportionate
ownership of the issuer's pool of underlying U.S. Treasury
securities. A zero coupon security pays no interest to its
holder during its life and is sold at a discount to its face
value at maturity. The amount of the discount fluctuates with
the market price of the security. The market prices of zero
coupon securities generally are more volatile than the market
prices of securities that pay interest periodically and are
likely to respond to a greater degree to changes in interest
rates than non-zero coupon securities having similar maturities
and credit qualities.
Repurchase Agreements
Repurchase agreements involve the acquisition by the Fund
of an underlying debt instrument, subject to an obligation of
the seller to repurchase, and the Fund to resell, the instrument
at a fixed price, usually not more than one week after its
purchase. Certain costs may be incurred by the Fund in
connection with the sale of the securities if the seller does
not repurchase them in accordance with the repurchase agreement.
In addition, if bankruptcy proceedings are commenced with
respect to the seller of the securities, realization on the
securities by the Fund may be delayed or limited.
Bank Obligations
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time (in no event
longer than seven days) at a stated interest rate. Time
deposits which may be held by the Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit
Insurance Corporation.
Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited
with it for a specified period of time.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer.
These instruments reflect the obligation both of the bank and of
the drawer to pay the face amount of the instrument upon
maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Commercial Paper
Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of
direct obligations which, at the time of their purchase, are (a)
rated not lower than Prime-l by Moody's or A-1 by Standard &
Poor's, (b) issued by companies having an outstanding unsecured
debt issue currently rated at least Aa3 by Moody's or AA- by
Standard & Poor's, or (c) if unrated, determined by The Dreyfus
Corporation to be of comparable quality to those rated
obligations which may be purchased by the Fund.
Illiquid Securities
The Fund may invest up to 15% of the
value of its net assets in securities as to which a liquid
trading market does not exist, provided such investments are
consistent with the Fund's investment objective. Such
securities may include securities that are not readily
marketable, such as certain securities that are subject to legal
or contractual restrictions on resale, repurchase agreements
providing for settlement in more than seven days after notice,
and certain options traded in the over-the-counter market and
securities used to cover such options. As to these securities,
the Fund is subject to a risk that should the Fund desire to
sell them when a ready buyer is not available for a price the
Fund deems representative of their value, the value of the
Fund's net assets could be adversely affected.
Certain Fundamental Policies
The Fund may: (i) purchase securities of any company having
less than three years' continuous operation (including
operations of any predecessors) if such purchase does not cause
the value of the Fund's investments in all such companies to
exceed 5% of the value of its assets; (ii) borrow money to the
extent permitted under the Investment Company Act of 1940; and
(iii) invest up to 25% of its total assets in securities of
issuers in a single industry, provided that, when the Fund has
adopted a temporary defensive posture, there shall be no
limitation on investments in securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities. This
paragraph describes fundamental policies that cannot be changed
without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting
shares.
Certain Additional Non-Fundamental Policies
The Fund may: (i) invest up to 15% of its net assets in
repurchase agreements providing for settlement in more than
seven days after notice and in other illiquid securities; and
(ii) pledge, mortgage, hypothecate or otherwise encumber to its
assets, to the extent necessary to secure permitted borrowings.
See "Investment Objective and Management Policies--Investment
Restrictions" in the Fund's Statement of Additional Information.
Risk Factors
Lower Rated Securities
You should carefully consider the relative risks of
investing in the higher yielding (and, therefore, higher risk)
debt securities in which the Fund may invest when management
believes that such securities offer opportunities for capital
growth. These are securities such as those rated Ba by Moody's
or BB by Standard & Poor's or as low as those rated Caa by
Moody's or CCC by Standard & Poor's. They generally are not
meant for short-term investing and may be subject to certain
risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated
fixed-income securities. Securities rated Ba by Moody's are
judged to have speculative elements; their future cannot be
considered as well assured and often the protection of interest
and principal payments may be very moderate. Securities rated
BB by Standard & Poor's are regarded as having predominantly
speculative characteristics and, while such securities have less
near-term vulnerability to default than other speculative grade
debt, they face major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and
principal payments. Securities rated Caa by Moody's are of poor
standing and may be in default or there may be present elements
of danger with respect to principal or interest. Standard &
Poor's typically assigns a CCC rating to debt which has a
currently identifiable vulnerability to default and is dependent
upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal.
Such obligations, though high yielding, are characterized by
great risk. See "Appendix" in the Fund's Statement of
Additional Information for a general description of Moody's and
Standard & Poor's ratings of debt obligations. The ratings of
Moody's and Standard & Poor's represent their opinions as to the
quality of the securities which they undertake to rate. It
should be emphasized, however, that ratings are relative and
subjective and, although ratings may be useful in evaluating the
safety of interest and principal payments, they do not evaluate
the market value risk of these securities. Therefore, although
these ratings may be an initial criterion for selection of
portfolio investments, The Dreyfus Corporation also will
evaluate these securities and the ability of the issuers of such
securities to pay interest and principal. The Fund's ability to
achieve its investment objective may be more dependent on The
Dreyfus Corporation's credit analysis than might be the case for
a fund that invests in higher rated securities. Once the rating
of a portfolio security has been changed, the Fund will consider
all circumstances deemed relevant in determining whether to
continue to hold the security.
The market price and yield of bonds rated Ba or lower by
Moody's and BB or lower by Standard & Poor's are more volatile
than those of higher rated bonds. Factors adversely affecting
the market price and yield of these securities will adversely
affect the Fund's net asset value. In addition, the retail
secondary market for these bonds may be less liquid than that of
higher rated bonds; adverse conditions could make it difficult
at times for the Fund to sell certain securities or could result
in lower prices than those used in calculating the Fund's net
asset value.
The market values of certain lower rated debt securities
tend to reflect individual corporate developments to a greater
extent than do higher rated securities, which react primarily to
fluctuations in the general level of interest rates, and tend to
be more sensitive to economic conditions than are higher rated
securities. Companies that issue such bonds often are highly
leveraged and may not have available to them more traditional
methods of financing. Therefore, the risk associated with
acquiring the securities of such issuers generally is greater
than is the case with higher rated securities.
The Fund may invest in zero coupon securities and
pay-in-kind bonds (bonds which pay interest through the issuance
of additional bonds) rated as low as Caa by Moody's and as low
as CCC by Standard & Poor's, which involve special
considerations. These securities may be subject to greater
fluctuations in value due to changes in interest rates than
interest-bearing securities and thus may be considered more
speculative than comparably rated interest-bearing securities.
See "Other Investment Considerations" below and "Investment
Objective and Management Policies--Risk Factors--Lower Rated
Securities" and "Dividends, Distributions and Taxes" in the
Fund's Statement of Additional Information.
The Fund's ability to engage in certain short-term
transactions may be limited by the requirement that, to qualify
as regulated investment company, it must earn less than 30% of
its gross income from the disposition of securities held for
less than three months. This 30% test limits the extent to
which the Fund may sell securities held for less than three
months, write options expiring in less than three months and
invest in certain futures contracts, among other strategies.
However, portfolio turnover will not otherwise be a limiting
factor in making investment decisions.
Investing in Foreign Securities
In making foreign investments, the Fund will give
appropriate consideration to the following factors, among
others.
Foreign securities markets generally are not as developed
or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than
securities of comparable U.S. issuers. Similarly, volume and
liquidity in most foreign securities markets are less than in
the United States and, at times, volatility of price can be
greater than in the United States. The issuers of some of these
securities, such as foreign bank obligations, may be subject to
less stringent or different regulations than are U.S. issuers.
In addition, there may be less publicly available information
about a non-U.S. issuer, and non-U.S. issuers generally are not
subject to uniform accounting and financial reporting standards,
practices and requirements comparable to those applicable to
U.S. issuers.
Many countries providing investment opportunities for the
Fund have experienced substantial, and in some periods extremely
high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to
have adverse effects on the economies and securities markets of
certain of these countries. In attempt to control inflation,
wage and price controls have been imposed in certain countries.
Because stock certificates and other evidences of ownership
of such securities usually are held outside the United States,
the Fund will be subject to additional risks which include
possible adverse political and economic developments, possible
seizure or nationalization of foreign deposits and possible
adoption of governmental restrictions which might adversely
affect the payment of principal and interest on the foreign
securities or might restrict the payment of principal and
interest to investors located outside the country of the issuer,
whether from currency blockage or otherwise. Custodial expenses
for a portfolio of non-U.S. securities generally are higher than
for a portfolio of U.S. securities.
Since foreign securities often are purchased with and
payable in currencies of foreign countries, the value of these
assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and exchange control
regulations. Some currency exchange costs may be incurred when
the Fund changes investments from one country to another.
Furthermore, some of these securities may be subject to
brokerage taxes levied by foreign governments, which have the
effect of increasing the cost of such investment and reducing
the realized gain or increasing the realized loss on such
securities at the time of sale. Income received by the Fund
from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States,
however, may reduce or eliminate such taxes. All such taxes
paid by the Fund will reduce its net income available for
distribution to investors.
Distributions paid by the Fund to corporate investors do
not qualify for the dividends received deduction to the extent
that the distributions are attributable to amounts received by
the Fund as dividends on foreign securities.
Foreign Currency Exchange
Currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by the
forces of supply and demand in the foreign exchange markets and
relative merits of investments in different countries, actual or
perceived changes in interest rates and other complex factors,
as seen from an international perspective. Currency exchange
rates also can be affected unpredictably by intervention by U.S.
or foreign governments or central banks or the failure to
intervene or by currency controls or political developments in
the U.S. or abroad.
The foreign currency market offers less protection against
defaults in the forward trading of currencies than is available
when trading in currencies occurs on an exchange. Since a
forward currency contract is not guaranteed by an exchange or
clearinghouse, a default on the contract would deprive the Fund
of unrealized profits or force the Fund to cover its commitments
for purchase or resale, if any, at the current market price.
Foreign Commodity Transactions
Unlike trading on domestic commodity exchanges, trading on
foreign commodity exchanges is not regulated by the CFTC and may
be subject to greater risks than trading on domestic exchanges.
For example, some foreign exchanges are principal markets so
that no common clearing facility exists and a trader may look
only to the broker for performance of the contract. In
addition, unless the Fund hedges against fluctuations in the
exchange rate between the U.S. dollar and the currencies in
which the trading is done on foreign exchanges, any profits that
the Fund might realize in trading could be eliminated by adverse
changes in the exchange rate, or the Fund could incur losses as
a result of those changes. Transactions on foreign exchanges
may include both commodities which are traded on domestic
exchanges and those which are not.
Other Investment Considerations
The Fund's net asset value is not fixed and should be
expected to fluctuate. You should purchase Fund shares only as
a supplement to an overall investment program and only if you
are willing to undertake the risks involved.
For the portion of the Fund's portfolio invested in equity
securities, investors should be aware that equity securities
fluctuate in value, often based on factors unrelated to the
value of the issuer of the securities, and that fluctuations
can be pronounced. Changes in the value of the Fund's portfolio
securities, regardless of whether the securities are equity or
debt, will result in changes in the value of a Fund share and
thus the Fund's yield and total return to investors.
For the portion of the Fund's portfolio invested in debt
securities, investors should be aware that even though
interest-bearing securities are investments which promise a
stable stream of income, the prices of such securities are
inversely affected by changes in interest rates and, therefore,
are subject to the risk of market price fluctuations. The
values of fixed-income securities also may be affected by
changes in the credit rating or financial condition of the
issuing entities. See "Lower Rated Securities" above.
Securities purchased by the Fund often are offered on a
when-issued basis, which means that delivery and payment take
place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate that
will be received on a when-issued security are fixed at the time
the Fund enters into the commitment. The Fund will make
commitments to purchase such securities only with the intention
of actually acquiring the securities, but the Fund may sell
these securities before the settlement date if it is deemed
advisable. The Fund will not accrue income in respect of a
when-issued security prior to its stated delivery date.
Securities purchased on a when-issued basis and certain
other securities held in the Fund's portfolio are subject to
changes in value (both generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when
interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated,
in the level of interest rates. Securities purchased on a
when-issued basis may expose the Fund to risks because they may
experience such fluctuations prior to their actual delivery.
Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained
in the transaction itself. A segregated account of the Fund
consisting of cash, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at least
equal at all times to the amount of the when-issued commitments
will be established and maintained at the Fund's custodian bank.
Purchasing securities on a when-issued basis when the Fund is
fully or almost fully invested may result in greater potential
fluctuation in the value of the Fund's net assets and its net
asset value per share.
Federal income tax law requires the holder of a zero coupon
security or of certain pay-in-kind bonds to accrue income with
respect to these securities prior to the receipt of cash
payments. To maintain its qualification as a regulated
investment company and avoid liability for Federal income taxes,
the Fund may be required to distribute such income accrued to
these securities and may have to dispose of portfolio securities
under disadvantageous circumstances in order to generate cash to
satisfy these distribution requirements.
The Fund's classification as a "non-diversified" investment
company means that the proportion of the Fund's assets that may
be invested in the securities of a single issuer is not limited
by the Investment Company Act of 1940. A "diversified
investment company" is required by the Investment Company Act of
1940 generally, with respect to 75% of its total assets, to
invest not more than 5% of such assets in the securities of a
single issuer and to hold not more than 10% of the voting
securities of any single issuer. However, the Fund intends to
conduct its operations so as to qualify as a "regulated
investment company" for purposes of the Internal Revenue Code of
1986, as amended (the "Code"), which requires that, at the end
of each quarter of its taxable year, (i) at least 50% of the
market value of the Fund's total assets be invested in cash,
U.S. Government securities, the securities of other regulated
investment companies and other securities, with such other
securities of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of the
Fund's total assets and 10% of the outstanding voting securities
of such issuer, and (ii) not more than 25% of the value of its
total assets be invested in the securities of any one issuer
(other than U.S. Government securities or the securities of
other regulated investment companies). Since a relatively high
percentage of the Fund's assets may be invested in the
obligations of a limited number of issuers, some of which may be
within the same economic sector, the Fund's portfolio securities
may be more susceptible to any single economic, political or
regulatory occurrence than the portfolio securities of a
diversified investment company.
Investment decisions for the Fund are made independently
from those of the other investment companies advised by The
Dreyfus Corporation. However, if such other investment
companies are prepared to invest in, or desire to dispose of,
securities of the type in which the Fund invests at the same
time as the Fund, available investments or opportunities for
sales will be allocated equitably to each investment company.
In some cases, this procedure may adversely affect the size of
the position obtained for or disposed of by the Fund or the
price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as the
Fund's investment adviser. Dreyfus is a wholly-owned subsidiary
of Mellon Bank, N.A., which a wholly-owned subsidiary of Mellon
Bank Corporation ("Mellon"). As of November 30, 1994, The
Dreyfus Corporation managed or administered approximately $71
billion in assets for approximately 1.9 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the
overall management of the Fund's affairs under a Management
Agreement with the Fund, subject to the overall authority of the
Fund's Trustees in accordance with Massachusetts law. The
Fund's primary portfolio manager is Richard C. Shields. He has
held that position since August 1988 and has been employed by
The Dreyfus Corporation since 1979. The Fund's other investment
officers are identified under "Management of the Fund" in the
Fund's Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund as well
as for other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities
analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under
the Federal Bank Holding Company Act of 1956, as amended.
Mellon provides a comprehensive range of financial products and
services in domestic and selected international markets. Mellon
is among the twenty-five largest bank holding companies in the
United States based on total assets. Mellon's principal
wholly-owned subsidiaries are Mellon Bank, N.A., Mellon Bank
(DE) National Association, Mellon Bank (MD), The Boston Company,
Inc., AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its
subsidiaries, including Dreyfus, Mellon managed approximately
$201 billion in assets as of September 30, 1994, including $76
billion in mutual fund assets. As of September 30, 1994,
Mellon, through various subsidiaries, provided non-investment
services, such as custodial or administration services, for
approximately $659 billion in assets including approximately
$108 billion in mutual fund assets.
For the fiscal year ended October 31, 1994, the Fund paid
The Dreyfus Corporation a monthly fee at the annual rate of .75
of 1% of the value of the Fund's average daily net assets. From
time to time, The Dreyfus Corporation may waive receipt of its
fees and/or voluntarily assume certain expenses of the Fund,
which would have the effect of lowering the Fund's overall
expense ratio and increasing yield to investors at the time such
amounts are waived or assumed, as the case may be. The Fund
will not pay The Dreyfus Corporation at a later time for any
amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume. The management fee
is higher than that paid by most other investment companies.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder and distribution services from The Dreyfus
Corporation's own assets, including past profits but not
including the management fee paid by the Fund. The Fund's
distributor may pay part or all of these payments to securities
dealers or others for servicing and distribution.
Distributor
The Fund's distributor is Premier Mutual Fund Services,
Inc. (the "Distributor"), located at One Exchange Place, Boston,
Massachusetts 02109. The Distributor 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.
Transfer and Dividend Disbursing Agent and Custodian
The Shareholder Services Group, Inc., a subsidiary of First
Data Corporation, P.O. Box 9671, Providence, Rhode Island
02940-9671, is the Fund's Transfer and Dividend Disbursing Agent
(the "Transfer Agent"). The Bank of New York, 110 Washington
Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares can be purchased through the Distributor or
certain financial institutions, securities dealers and other
industry professionals (collectively, "Service Agents") that
have entered into agreements with the Distributor. Service
Agents may receive different levels of compensation for selling
different Classes of shares.
Management understands that some Service Agents may impose
certain conditions on their clients which are different from
those described in this Prospectus, and, to the extent permitted
by applicable regulatory authority, may charge their clients
direct fees which would be in addition to any amounts which
might be received under the Shareholder Service Plan. Each
Service Agent has agreed to transmit to its clients a schedule
of such fees. You should consult your Service Agent in this
regard.
When purchasing Fund shares, you must specify whether the
purchase is for Class A or Class B shares. Share certificates
are issued only upon your written request. No certificates are
issued for fractional shares. The Fund reserves the right to
reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you
are a client of a Service Agent which has made an aggregate
minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $500. The initial
investment must be accompanied by the Fund's Account
Application. For full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries,
directors of The Dreyfus Corporation, Board members of a fund
advised by The Dreyfus Corporation, including members of the
Fund's Board, or the spouse or minor child of any of the
foregoing, the minimum initial investment is $1,000. For
full-time or part-time employees of The Dreyfus Corporation or
any of its affiliates or subsidiaries who elect to have a
portion of their pay directly deposited into their Fund account,
the minimum initial investment is $50. The Fund reserves the
right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified and
non-qualified employee benefit plans or other programs where
contributions or account information can be transmitted in a
manner and form acceptable to the Fund. The Fund reserves the
right to vary further the initial and subsequent investment
minimum requirements at any time.
You may purchase Fund shares by check or wire, or through
the Dreyfus TeleTransfer Privilege described below. Checks
should be made payable to "The Dreyfus Family of Funds," or, if
for Dreyfus retirement plan accounts, to "The Dreyfus Trust
Company, Custodian." Payments to open new accounts which are
mailed should be sent to The Dreyfus Family of Funds, P.O. Box
9387, Providence, Rhode Island 02940-9387, together with your
Account Application indicating which Class of shares is being
purchased. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be
enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105,
Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent
to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Neither initial nor
subsequent investments should be made by third party check.
Purchase orders may be delivered in person only to a Dreyfus
Financial Center. These orders will be forwarded to the Fund
and will be processed only upon receipt thereby. For the
location of the nearest Dreyfus Financial Center, please call
one of the telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System
or any other bank having a correspondent bank in New York City.
Immediately available funds may be transmitted by wire to The
Bank of New York, DDA #8900119365/Dreyfus Strategic Investing --
Class A shares, or DDA #8900115165/Dreyfus Strategic Investing -
- - Class B shares, as the case may be, for purchase of Fund
shares in your name. The wire must include your Fund account
number (for new accounts your Taxpayer Identification Number
("TIN") should be included instead), account registration and
dealer number, if applicable. If your initial purchase of Fund
shares is by wire, please call 1-800-645-6561 after completing
your wire payment to obtain your Fund account number. Please
include your Fund account number on the Fund's Account
Application and promptly mail the Account Application to the
Fund, as no redemptions will be permitted until the Account
Application is received. You may obtain further information
about remitting funds in this manner from your bank. All
payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does
not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through
compatible computer facilities.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other
domestic financial institution that is an Automated Clearing
House member. You must direct the institution to transmit
immediately available funds through the Automated Clearing House
to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account
registration and your Fund account number preceded by the digits
"1111."
Fund shares are sold on a continuous basis. Net asset
value per share is determined as of the close of trading on the
New York Stock Exchange (currently 4:00 p.m., New York time), on
each day the New York Stock Exchange is open for business. For
purposes of determining net asset value, options and futures
contracts will be valued 15 minutes after the close of trading
on the New York Stock Exchange. Net asset value per share of
each Class is computed by dividing the value of the Fund's net
assets represented by such Class (i.e., the value of its assets
less liabilities) by the total number of shares of such
Class outstanding. The Fund's investments are valued based on
market value or, where market quotations are not readily
available, based on fair value as determined in good faith by
the Board of Trustees. For further information regarding the
methods employed in valuing Fund investments, see "Determination
of Net Asset Value" in the Fund's Statement of Additional
Information.
Federal regulations require that you provide a certified
TIN upon opening or reopening an account. See "Dividends,
Distributions and Taxes" and the Fund's Account Application for
further information concerning this requirement. Failure to
furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service ("IRS").
If an order is received by the Transfer Agent or other
agent by the close of trading on the New York Stock Exchange
(currently 4:00 p.m., New York time) on a business day, Fund
shares will be purchased at the public offering price determined
as of the close of trading on the New York Stock Exchange on
that day. Otherwise, Fund shares will be purchased at the
public offering price determined as of the close of trading on
the New York Stock Exchange on the next business day, except
where shares are purchased through a dealer as provided below.
Orders for the purchase of Fund shares received by the
close of trading on the floor of the New York Stock Exchange on
a business day and transmitted to the Distributor by the close
of its business day (normally 5:15 p.m., New York time) will be
based on the public offering price per share determined as of
the close of trading on the New York Stock Exchange on that day.
Otherwise, the orders will be based on the next determined
public offering price. It is the dealers' responsibility to
transmit orders so that they will be received by the Distributor
before the close of its business day.
Class A Shares
The public offering price for Class A shares is the net
asset value per share of that Class plus a sales load as shown
below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
Dealers'
As a % of As a % of Reallowance
offering net asset as a % of
price value offering
Amount of Transaction per share per share price
- --------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 to less than $3,000,000 1.00 1.00 1.00
$3,000,000 to less than $5,000,000 .50 .50 .50
$5,000,000 and over .25 .25 .25
</TABLE>
Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered
into an agreement with the Distributor pertaining to the sale of
Fund shares (or which otherwise have a brokerage related or
clearing arrangement with an NASD member firm or financial
institution with respect to the sale of Fund shares) may
purchase Class A shares for themselves, directly or pursuant to
an employee benefit plan or other program, or for their spouses
and minor children at net asset value, provided that they have
furnished the Distributor with such information that it may
request from time to time in order to verify eligibility for
this privilege. This privilege also applies to full-time
employees of financial institutions affiliated with NASD member
firms whose full-time employees are eligible to purchase Class A
shares at net asset value. In addition, Class A shares are
offered at net asset value to full-time or part-time employees
of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including
members of the Fund's Board, or the spouse or minor child of any
of the foregoing.
Class A shares will be offered at net asset value without a
sales load to employees participating in qualified or
non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or
programs have a minimum of 250 employees eligible for
participation in such plans or programs or (ii) such plan's or
program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such
plans or programs exceeds one million dollars ("Eligible Benefit
Plans"). Plan sponsors, administrators or trustees, as
applicable, are responsible for notifying the Distributor when
the relevant requirement is satisfied. The Distributor may pay
dealers a fee of up to .5% of the amount invested through such
dealers in Class A shares at net asset value by employees
participating in Eligible Benefit Plans. All present holdings
of shares of funds in the Dreyfus Family of Funds by Eligible
Benefit Plans will be aggregated to determine the fee payable
with respect to each such purchase of Class A shares. The
Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds,
other than amounts received from the Fund, including past
profits or any other source available to it.
Class A shares also may be purchased (including by
exchange) at net asset value without a sales load for
Dreyfus-sponsored IRA "Rollover Accounts" with the distribution
proceeds from a qualified retirement plan or a Dreyfus-sponsored
403(b)(7) plan, provided that, at the time of such distribution,
such qualified retirement plan or Dreyfus-sponsored 403(b)(7)
plan (a) satisfied the requirements set forth under either
clause (i) or clause (ii) in the preceding paragraph and all or
a portion of such plan's assets were invested in funds in the
Dreyfus Family of Funds or certain other products made available
by the Distributor to such plans, or (b) invested all of its
assets in certain funds in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such
plans.
For the period November 1, 1993 through August 24, 1994,
Dreyfus Service Corporation, a wholly-owned subsidiary of The
Dreyfus Corporation and the Fund's distributor during such
period, retained $561,439 from sales loads on Class A shares.
The dealer reallowance may be changed from time to time but will
remain the same for all dealers. The Distributor, at its
expense, may provide additional promotional incentives to
dealers that sell shares of funds advised by The Dreyfus
Corporation which are sold with a sales load, such as the Fund.
In some instances, these incentives may be offered only to
certain dealers who have sold or may sell significant amounts of
shares.
Class B Shares
The public offering price for Class B shares is the net
asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on
certain redemptions of Class B shares as described under "How to
Redeem Fund Shares." The Distributor compensates certain Service
Agents for selling Class B shares at the time of purchase from
the Distributor's own assets. The proceeds of the CDSC and the
distribution fee, in part, are used to defray these expenses.
For the period November 1, 1993 through August 24, 1994, Dreyfus
Service Corporation, the Fund's distributor during such period
retained $58,543 from CDSC on Class B shares.
Right of Accumulation
Class A Shares -- Reduced sales loads may apply to any purchase
of Class A shares, shares of certain other funds advised by The
Dreyfus Corporation which are sold with a sales load and shares
acquired by a previous exchange of shares purchased with a sales
load (hereinafter referred to as "Eligible Funds"), by you and
any related "purchaser" as defined in the Statement of
Additional Information, where the aggregate investment,
including such purchase, is $50,000 or more. If, for example,
you previously purchased and still hold Class A shares of the
Fund, or of any other Eligible Fund, or combination thereof,
with an aggregate current market value of $40,000 and
subsequently purchase Class A shares of the Fund having a
current value of $20,000, the sales load applicable to the
subsequent purchase would be reduced to 4% of the offering
price. All present holdings of Eligible Funds may be combined
to determine the current offering price of the aggregate
investment in ascertaining the sales load applicable to each
subsequent purchase.
To qualify for reduced sales loads, at the time of a
purchase you or your Service Agent must notify the Distributor
if orders are made by wire, or the Transfer Agent if orders are
made by mail. The reduced sales load is subject to confirmation
of your holdings through a check of appropriate records.
Dreyfus TeleTransfer Privilege
You may purchase Fund shares (minimum $500, maximum
$150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the
Fund's Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred
between the bank account designated in one of these documents
and your Fund account. Only such a bank account maintained in a
domestic financial institution which is an Automated Clearing
House member may be so designated. The Fund may modify or
terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the Dreyfus TeleTransfer Privilege,
you may request a Dreyfus TeleTransfer purchase of Fund shares
by telephoning 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading
may not be available to clients of certain Service Agents and
some Service Agents may impose certain conditions on their
clients which are different from those described in this
Prospectus. You should consult your Service Agent in this
regard.
Fund Exchange
You may purchase, in exchange for Class A or Class B shares
of the Fund, shares of the same Class in certain other funds
managed or administered by The Dreyfus Corporation, to the
extent such shares are offered for sale in your state of
residence. These Funds may have different investment objectives
which may be of interest to you. Fund exchanges may be
exercised two times during the calendar year as described below.
If you desire to use this service, you should consult your
Service Agent or call 1-800-645-6561 to determine if it is
available and whether any other conditions are imposed on its
use.
To request an exchange, you or your Service Agent acting on
your behalf must give exchange instructions to the Transfer
Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the
fund into which the exchange is being made. Prospectuses may be
obtained by calling 1-800-645-6561. Except in case of Personal
Retirement Plans, shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new
account by exchange, the shares being exchanged must have a
value of at least the minimum initial investment required for
the fund into which the exchange is being made. The ability to
issue exchange instructions by telephone is given to all fund
shareholders automatically, unless you check the relevant "NO"
box on the Account Application indicating that you specifically
refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed
by all shareholders on the account or by a separate signed
Shareholder Services Form, also available by calling
1-800-645-6561 or by a separate signed Shareholder Services
Form, also available by calling 1-800-645-6561. If you have
established the Telephone Exchange Privilege, you may telephone
exchange instructions by calling 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. See "How to Redeem
Fund Shares--Procedures." Upon an exchange into a new account,
the following shareholder services and privileges, as applicable
and where available, will be automatically carried over to the
fund into which the exchange is made: Telephone Exchange
Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TeleTransfer Privilege and the
dividend/capital gain distributions option (except for the
Dreyfus Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to
exchanges of Class A shares into funds sold with a sales load.
No CDSC will be imposed on Class B shares at the time of an
exchange; however, Class B shares acquired through an exchange
will be subject on redemption to the higher CDSC applicable to
the exchanged or acquired shares. The CDSC applicable on
redemption of the acquired Class B shares will be calculated
from the date of the initial purchase of the Class B shares
exchanged. If you are exchanging Class A shares into a fund
that charges a sales load, you may qualify for share prices
which do not include the sales load or which reflect a reduced
sales load, if the shares of the fund from which you are
exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load,
or (c) acquired through reinvestments of dividends or
distributions paid with respect to the foregoing categories of
shares. To qualify, at the time of your exchange you must
notify the Transfer Agent or your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation
of your holdings through a check of appropriate records. See
"Shareholder Services" in the Fund's Statement of Additional
Information. No fees currently are charged shareholders
directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice,
to charge shareholders a nominal fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund
reserves the right to reject any exchange request in whole or in
part. The availability of Fund exchanges may be modified or
terminated at any time upon notice to shareholders.
With respect to any investor who has exchanged into and out
of the Fund (or the reverse) twice during the calendar year,
further purchase orders (including those pursuant to exchange
instructions) relating to any shares of the Fund will be
rejected for the remainder of the calendar year. Management
believes that this policy will enable shareholders to change
their investment program, while protecting the Fund against
disruptions in portfolio management resulting from frequent
transactions by those seeking to time market fluctuations.
Exchanges made through omnibus accounts for various retirement
plans are not subject to such limit on exchanges.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares
given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss.
Dreyfus Auto-Exchange Privilege
Dreyfus Auto-Exchange Privilege permits you to invest
regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for Class A or Class B shares of the Fund,
in shares of the same class of certain other funds in the
Dreyfus Family of Funds of which you are currently an investor.
The amount you designate, which can be expressed either in terms
of a specific dollar or share amount ($100 minimum), will be
exchanged automatically on the first and or fifteenth of the
month according to the schedule you have selected. Shares will
be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges of Class A
shares into funds sold with a sales load. No CDSC will be
imposed on Class B shares at the time of an exchange; however,
Class B shares acquired through an exchange will be subject on
redemption to the higher CDSC applicable to the exchanged or
acquired shares. The CDSC applicable on redemption of the
acquired Class B shares will be calculated from the date of the
initial purchase of the Class B shares exchanged. See
"Shareholder Services" in the Statement of Additional
Information. This Privilege may be modified or canceled by the
Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by writing to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671. The Fund may charge a service fee for this
Privilege. No such fee currently is contemplated. The exchange
of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging
shareholder may realize a taxable gain or loss. Thus, you may
realize a taxable gain or loss. For more information concerning
this Privilege and the funds in the Dreyfus Family of Funds
eligible to participate in this Privilege, or to obtain a
Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561.
Dreyfus-Automatic Asset Builder
Dreyfus-Automatic Asset Builder permits you to purchase
Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated
by you will be debited in the specified amount, and Fund shares
will be purchased, once a month, on either the first or
fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To
establish a Dreyfus-Automatic Asset Builder account, you must
file an authorization form with the Transfer Agent. You may
obtain the necessary authorization form by calling
1-800-645-6561. You may cancel your participation in this
Privilege or change the amount of purchase at any time by
mailing written notification to The Dreyfus Family of Funds,
P.O. Box 6527, Providence, Rhode Island 02940-6527, or, if for
Dreyfus Retirement Plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427,
and the notification will be effective three business days
following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee
currently is contemplated.
Automatic Withdrawal Plan
The Automatic Withdrawal Plan permits you to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be
obtained by calling 1-800-645-6561. There is a service charge
of 50 cents for each withdrawal check. The Automatic
Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued
may not be redeemed through the Automatic Withdrawal Plan.
Class B shares withdrawn pursuant to the Automatic
Withdrawal Plan will be subject to any applicable CDSC. Any
correspondence with respect to the Automatic Withdrawal Plan
should be addressed to The Dreyfus Family of Funds, P.O. Box
6527, Providence, Rhode Island 02940-6527, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Dreyfus Dividend Options
Dreyfus Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of the same Class of another fund in
the Dreyfus Family of Funds of which you are an investor.
Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales
load. If you are investing in a fund that charges a sales load,
you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load. If you are
investing in a fund or class that charges a CDSC, the shares
purchased will be subject on redemption to the CDSC, if any,
applicable to the purchased shares. See "Shareholder Services"
in the Statement of Additional Information. Dreyfus Dividend
ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from the Fund
to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. Banks may charge a fee for
this service.
For more information concerning these privileges and the
funds in the Dreyfus Family of Funds eligible to participate in
these privileges, or to request a Dividend Options Form, please
call toll free 1-800-645-6561. You may cancel these privileges
by mailing written notification to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a
new fund after cancellation, you must submit a new authorization
form. Enrollment in or cancellation of these privileges is
effective three business days following receipt. These
privileges are available only for existing accounts and may not
be used to open new accounts. Minimum subsequent investments do
not apply to Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee.
No such fee currently is contemplated. Shares held under Keogh
Plans, IRAs or other retirement plans are not eligible for
Dreyfus Dividend Sweep.
Dreyfus Payroll Savings Plan
Dreyfus Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit
program, you may have part or all of your paycheck transferred
to your existing Dreyfus account electronically through the
Automated Clearing House system at each pay period. To
establish a Dreyfus Payroll Savings Plan account, you must file
an authorization form with your employer's payroll department.
Your employer must complete the reverse side of the form and
return it to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. You may obtain the
necessary authorization form from the Distributor. You may
change the amount of purchase or cancel the authorization only
by written notification to your employer. It is the sole
responsibility of your employer, not the Distributor, The
Dreyfus Corporation, the Fund, the Transfer Agent or any other
person, to arrange for transactions under Dreyfus Payroll
Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is
contemplated.
Retirement Plans
The Fund offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans.
Plan support services also are available. You can obtain
details on the various plans by calling the following numbers
toll free; for Keogh Plans, please call 1-800-358-5566; for IRAs
and IRA "Rollover Accounts," please call 1-800-645-6561; for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans,
please call 1-800-322-7880.
Letter of Intent -- Class A Shares
By signing a Letter of Intent form, available by calling
1-800-645-6561, you become eligible for the reduced sales load
applicable to the total number of Eligible Fund shares purchased
in a 13-month period pursuant to the terms and under the
conditions set forth in the Letter of Intent. A minimum initial
purchase of $5,000 is required. To compute the applicable sales
load, the offering price of shares you hold (on the date of
submission of the Letter of Intent) in any Eligible Fund that
may be used toward "Right of Accumulation" benefits described
above may be used as a credit toward completion of the Letter of
Intent. However, the reduced sales load will be applied only to
new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales
load if you do not purchase the full amount indicated in the
Letter of Intent. The escrow will be released when you fulfill
the terms of the Letter of Intent by purchasing the specified
amount. If your purchases qualify for a further sales load
reduction, the sales load will be adjusted to reflect your total
purchase at the end of 13 months. If total purchases are less
than the amount specified, you will be requested to remit an
amount equal to the difference between the sales load actually
paid and the sales load applicable to the aggregate purchases
actually made. If such remittance is not received within 20
days, the Transfer Agent, as attorney-in-fact pursuant to the
terms of the Letter of Intent, will redeem an appropriate number
of Class A shares held in escrow to realize the difference.
Signing a Letter of Intent does not bind you to purchase, or the
Fund to sell, the full amount indicated at the sales load in
effect at the time of signing, but you must complete the
intended purchase to obtain the reduced sales load. At the time
you purchase Class A shares, you must indicate your intention to
do so under a Letter of Intent. Purchases pursuant to a Letter
of Intent will be made at the then-current net asset value plus
the applicable sales load in effect at the time such Letter of
Intent was executed.
HOW TO REDEEM FUND SHARES
General -- You may request redemption of your Class A or Class B
shares at any time. Redemption requests should be transmitted
to the Transfer Agent as described below. When a request is
received in proper form, the Fund will redeem the shares at the
next determined net asset value as described below. If you hold
Fund shares of more than one Class, any request for redemption
must specify the Class of shares being redeemed. If you fail to
specify the Class of shares to be redeemed or if you own fewer
shares of the Class than specified to be redeemed, the
redemption request may be delayed until the Transfer Agent
receives further instructions from you or your Service Agent.
The Fund imposes no charges (other than any applicable
CDSC) when shares are redeemed directly through the Distributor.
Service Agents may charge a nominal fee for effecting
redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption
request. The value of the shares redeemed may be more or less
than their original cost, depending on the Fund's then-current
net asset value.
The Fund ordinarily will make payment for all shares
redeemed within seven days after receipt by the Transfer Agent
of a redemption request in proper form, except as provided by
the rules of the Securities and Exchange Commission. However,
if you have purchased Fund shares by check, by Dreyfus
TeleTransfer or through Dreyfus-Automatic Asset Builder and
subsequently submit a written redemption request to the Transfer
Agent, the redemption proceeds will be transmitted to you
promptly upon bank clearance of your purchase check, Dreyfus
TeleTransfer purchase or Dreyfus-Automatic Asset Builder order,
which may take up to eight business days or more. In addition,
the Fund will reject requests to redeem shares by wire or
telephone or pursuant to the Dreyfus TeleTransfer Privilege for
a period of eight business days after receipt by the Transfer
Agent of the purchase check, the Dreyfus TeleTransfer purchase
or the Dreyfus-Automatic Asset Builder order against which such
redemption is requested. These procedures will not apply if
your shares were purchased by wire payment, or if you otherwise
have a sufficient collected balance in your account to cover the
redemption request. Prior to the time any redemption is
effective, dividends on such shares will accrue and be payable,
and you will be entitled to exercise all other rights of
beneficial ownership. Fund shares will not be redeemed until
the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 30 days' written notice if your
account's net asset value is $500 or less and remains so during
the notice period.
Contingent Deferred Sales Charge -- Class B Shares
A CDSC payable to the Distributor is imposed on any
redemption by a shareholder of Class B shares which reduces the
current net asset value of your Class B shares to an amount
which is lower than the dollar amount of all payments by you for
the purchase of Class B shares of the Fund held by you at the
time of redemption. No CDSC will be imposed to the extent that
the net asset value of the Class B shares redeemed does not
exceed (i) the current net asset value of Class B shares
acquired through reinvestment of dividends or capital gain
distributions, plus (ii) increases in the net asset value of
your Class B shares above the dollar amount of all your payments
for the purchase of Class B shares of the Fund held by you at
the time of redemption.
If the aggregate value of the Class B shares redeemed has
declined below their original cost as a result of the Fund's
performance, a CDSC may be applied to the then-current net asset
value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of
the charge will depend on the number of years from the time you
purchased the Class B shares until the time of redemption of
such shares. Solely for purposes of determining the number of
years from the time of any payment for the purchase of Class B
shares, all payments during a month will be aggregated and
deemed to have been made on the first day of the month. The
following table sets forth the rates of the CDSC:
Payment Was Made CDSC as a % of Amount
Year Since Purchase Invested or Redemption Proceeds
First . . . . . . . . . . . . 4.00
Second . . . . . . . . . . . 4.00
Third . . . . . . . . . . . . 3.00
Fourth . . . . . . . . . . . 3.00
Fifth . . . . . . . . . . . . 2.00
Sixth . . . . . . . . . . . . 1.00
In determining whether a CDSC is applicable to a
redemption, the calculation will be made in a manner that
results in the lowest possible rate. It will be assumed that
the redemption is made first of amounts representing shares
acquired pursuant to the reinvestment of dividends and
distributions; then of amounts representing the increase in net
asset value of Class B shares above the total amount of payments
for the purchase of Class B shares made during the preceding six
years; then of amounts representing the cost of shares purchased
six years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of
time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10
per share for a cost of $1,000. Subsequently, the shareholder
acquired 5 additional shares through dividend reinvestment.
During the second year after the purchase the investor decided
to redeem $500 of his or her investment. Assuming at the time
of the redemption the net asset value had appreciated to $12 per
share, the value of the investor's shares would be $1,260 (105
shares at $12 per share). The CDSC would not be applied to the
value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate
of 4% (the applicable rate on the second year after purchase)
for a total CDSC of $9.60.
Waiver of CDSC
The CDSC will be waived in connection with (a) redemptions
made within one year after the death or disability, as defined
in Section 72(m)(7) of the Code, of the shareholder, (b)
redemptions by Eligible Benefit Plans, (c) redemptions as a
result of a combination of any investment company with the Fund
by merger, acquisition of assets or otherwise, (d) a
distribution following retirement under a tax-deferred
retirement plan or upon attaining age 70-1/2 in the case of an
IRA or Keogh plan or custodial account pursuant to Section
403(b) of the Code and (e) redemptions by such shareholders as
the Securities and Exchange Commission or its staff may permit.
If the Trustees of the Fund determine to discontinue the waiver
of the CDSC, the disclosure in the Fund's prospectus will be
appropriately revised. Any Fund shares subject to a CDSC which
were purchased prior to the termination of such waiver will have
the CDSC waived as provided in the Fund's prospectus at the time
of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of
redemption you must notify the Transfer Agent or your Service
Agent must notify the Distributor. Any such qualification is
subject to confirmation of your entitlement.
Procedures
You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, the Wire Redemption
Privilege, the Telephone Redemption Privilege or Dreyfus
TeleTransfer Privilege. Other redemption procedures may be in
effect for investors who effect transactions in Fund shares
through Service Agents. The Fund makes available to certain
large institutions the ability to issue redemption instructions
through compatible computer facilities.
In addition, the Distributor will accept orders from
dealers with which it has sales agreements for the repurchase of
shares held by shareholders. Repurchase orders received by the
dealer prior to the close of trading on the floor of the New
York Stock Exchange on a business day and transmitted to the
Distributor prior to the close of its business day (normally
5:15 p.m., New York time) are effected at the price determined
as of the close of trading on the floor of the New York Stock
Exchange on that day. Otherwise, the shares will be redeemed at
the next determined net asset value. It is the responsibility
of the dealer to transmit orders on a timely basis. The dealer
may charge the shareholder a fee for executing the order. This
repurchase arrangement is discretionary and may be withdrawn at
any time.
Your redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised or
administered by The Dreyfus Corporation that are not available
through the Exchange Privilege. The applicable CDSC will be
charged upon the redemption of Class B shares. Your redemption
proceeds will be invested in shares of the other fund on the
next business day. Before you make such a request, you must
obtain and should review a copy of the current prospectus of the
fund being purchased. Prospectuses may be obtained by calling
1-800-645-6561. The prospectus will contain information
concerning minimum investment requirements and other conditions
that may apply to your purchase.
You may redeem Fund shares by telephone if you have checked
the appropriate box on the Fund's Account Application or have
filed a Shareholder Services Form with the Transfer Agent. If
you select the Dreyfus TeleTransfer Privilege or telephone
exchange privilege (which is granted automatically unless you
refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to
be you, or a representative of your Service Agent, and
reasonably believed by the Transfer Agent to be genuine. The
Fund will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent
instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed
to be genuine.
During times of drastic economic or market conditions, you
may experience difficulty in contacting the Transfer Agent by
telephone to request a Dreyfus TeleTransfer redemption or
exchange of Fund shares. In such cases, you should consider
using the other redemption procedures described herein. Use of
these other redemption procedures may result in your redemption
request being processed at a later time than it would have been
if Dreyfus TeleTransfer redemption had been used. During the
delay, the Fund's net asset value may fluctuate.
Regular Redemption
Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 6527, Providence, Rhode Island 02940-6527. Redemption
requests on Dreyfus Retirement Plan accounts should be sent to
The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Written redemption requests must
specify the Class of shares being redeemed. Redemption requests
may be delivered in person only to a Dreyfus Financial Center.
These requests will be forwarded to the Fund and will be
processed only upon receipt thereby. For the location of the
nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption
requests must be signed by each shareholder, including each
owner of a joint account, and each signature must be guaranteed.
The Transfer Agent has adopted standards and procedures pursuant
to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities
associations, clearing agencies and savings associations, as
well as from participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion
Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers
listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a
written signature-guaranteed request.
Wire Redemption Privilege
You may request by wire or telephone that redemption
proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a
correspondent bank if your bank is not a member. To establish
the Wire Redemption Privilege, you must check the appropriate
box and supply the necessary information on the Fund's Account
Application or file a Shareholder Services Form with the
Transfer Agent. You may direct that redemption proceeds be paid
by check (maximum $150,000 per day) made out to the owners of
record and mailed to your address. Redemption proceeds of less
than $1,000 will be paid automatically by check. Holders of
jointly registered Fund or bank accounts may have redemption
proceeds of not more than $250,000 wired within any 30-day
period. You may telephone redemption requests by calling
1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. The Fund reserves the right to refuse any
redemption request, including requests made shortly after a
change of address, and may limit the amount involved or the
number of such requests. This Privilege may be modified or
terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire.
Shares held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not
eligible for this Privilege.
Telephone Redemption Privilege
You may redeem Fund shares (maximum $150,000 per day) by
telephone if you have checked the appropriate box on the Fund's
Account Application or have filed a Shareholder Services Form
with the Transfer Agent. The redemption proceeds will be paid
by check and mailed to your address. You may telephone
redemption instructions by calling 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. The Fund reserves
the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit
the amount involved or the number of telephone redemption
requests. This Privilege may be modified or terminated at any
time by the Transfer Agent or the Fund. Shares held under Keogh
Plans, IRAs or other retirement plans, and shares for which
certificates have been issued, are not eligible for this
Privilege.
Dreyfus TeleTransfer Privilege
You may redeem Fund shares (minimum $500 per day) by
telephone if you have checked the appropriate box and supplied
the necessary information on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent.
Class B shares redeemed through the Dreyfus TeleTransfer
Privilege will be subject to the appropriate CDSC. The proceeds
will be transferred between your Fund account and the bank
account designated in one of these documents. Only such a bank
account maintained in a domestic financial institution which is
an Automated Clearing House member may be so designated.
Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after
receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address.
Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TeleTransfer Privilege for transfer to their
bank account not more than $250,000 within any 30-day period.
The Fund reserves the right to refuse any request made by
telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate this Privilege at
any time or charge a service fee upon notice to shareholders.
No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer Privilege,
you may request a Dreyfus TeleTransfer redemption of Fund shares
by telephoning 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. Shares held under Keogh Plans,
IRAs or other retirement plans, and shares issued in certificate
form, are not eligible for this Privilege.
Reinvestment Privilege -- Class A
You may reinvest up to the number of Class A shares you
have redeemed, within 30 days of redemption, at the
then-prevailing net asset value without a sales load, or
reinstate your account for the purpose of exercising the
Exchange Privilege. The Reinvestment Privilege may be exercised
only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The Class A and Class B shares are subject to a Shareholder
Services Plan and the Class B shares only are subject to a
Distribution Plan.
Distribution Plan
Under the Distribution Plan, adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, the Fund pays the
Distributor 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.
Shareholder Services Plan
Under the Shareholder Services Plan, the Fund pays the
Distributor for the provision of certain services to the holders
of Class A and Class B shares a fee at the annual rate of .25 of
1% of the value of the average daily net assets of Class A and
Class B. 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. Under the Shareholder Services Plan, the
Distributor may make payments to Service Agents in respect of
these services. The Distributor determines the amounts to be
paid to Service Agents. Each Service Agent is required to
disclose to its clients any compensation payable to it by the
Fund pursuant to the Shareholder Services Plan and any other
compensation payable by their clients in connection with the
investment of their assets in Class A or Class B shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment
income and distributes net realized securities gains, if any,
once a year, but it may make distributions on a more frequent
basis to comply with the distribution requirements of the Code,
in all events in a manner consistent with the provisions of the
Investment Company Act of 1940. The Fund will not make
distributions from net realized securities gains unless capital
loss carryovers, if any, have been utilized or have expired.
You may choose whether to receive distributions in cash or to
reinvest such amounts in additional Fund shares of the same
Class at net asset value without a sales load. All expenses are
accrued daily and deducted before declaration of dividends.
Dividends paid by each Class will be calculated at the same time
and in the same manner and will be of the same amount, except
that the expenses attributable solely to Class A or Class B will
be borne exclusively by such Class. Class B shares will receive
lower per share dividends than Class A shares because of the
higher expenses borne by Class B. See "Fee Table."
Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or
other disposition of certain market discount bonds, paid by the
Fund will be taxable to U.S. shareholders as ordinary income
whether received in cash or reinvested in Fund shares.
Distributions from net realized long-term securities gains of
the Fund will be taxable as long-term capital gains regardless
of how long shareholders have held their Fund shares and whether
such distributions are received in cash or reinvested in
additional Fund shares. The Code provides that the net capital
gain of an individual will not be subject to Federal income tax
at a rate in excess of 28%. Dividends and distributions also
may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and
all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund
to a foreign investor generally are subject to U.S. nonresident
withholding taxes at the rate of 30%, unless the foreign
investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities
gains paid by the Fund to a foreign investor as well as the
proceeds of any redemptions from a foreign investor's account,
regardless of the extent to which gain or loss may be realized,
generally will not be subject to U.S. nonresident withholding
tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor
certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and
distributions is mailed to you annually. You also will receive
periodic summaries of your account which will include
information as to income dividends and distributions from
securities gains, if any, paid during the year. Depending upon
the composition of the Fund's income, a portion of the dividends
from net investment income may qualify for the dividends
received deduction allowable to certain U.S. corporations.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares, if you exchange your
Class A shares for shares of another fund advised by The Dreyfus
Corporation within 91 days of purchase and such other fund
reduces or eliminates its otherwise applicable sales load charge
for the purpose of the exchange. In this case, the amount of
your sales load charge for Class A shares, up to the amount of
the reduction of the sales load charge on the exchange, is not
included in the basis of your Class A shares for purposes of
computing gain or loss on the exchange, and instead is added to
the basis of the fund shares received on the exchange.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of
dividends, distributions from net realized securities gains and
the proceeds of any redemption, regardless of the extent to
which gain or loss may be realized, paid to a shareholder if
such shareholder fails to certify either that the TIN furnished
in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being
subject to backup withholding as a result of a failure to
properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines that a
shareholder's TIN is incorrect or if a shareholder has failed to
properly report dividend and interest income on such
shareholder's Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any
tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the
account, and may be claimed as a credit on the record owner's
Federal income tax return.
Management of the Fund believes that the Fund qualified for
the fiscal year ended October 31, 1994 as a "regulated
investment company" under the Code. The Fund intends to
continue to so qualify if such qualification is in the best
interests of its shareholders. Qualification as a regulated
investment company relieves the Fund of any liability for
Federal income taxes to the extent its earnings are distributed
in accordance with applicable provisions of the Code. In
addition, the Fund is subject to a non-deductible 4% excise tax,
measured with respect to certain undistributed amounts of
taxable income and capital gains.
You should consult your tax adviser regarding specific
questions as to Federal, state and local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of
shares will be calculated on the basis of average annual total
return. Advertisements may also include performance calculated
on the basis of total return. These total return figures
reflect changes in the price of the shares and assume that any
income dividends and or capital gains distributions made by the
Fund during the measuring period were reinvested in shares of
the same Class. Class A total return figures include the
maximum initial sales charge and Class B total return figures
include any applicable CDSC. These figures also take into
account any applicable service and distribution fees. As a
result, at any given time, the performance of Class B should be
expected to be lower than that of Class A. Performance for each
Class will be calculated separately.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the
Fund was purchased with an initial payment of $1,000 and that
the investment was redeemed at the end of a stated period of
time, after giving effect to the reinvestment of dividends and
distributions during the period. The return is expressed as a
percentage rate which, if applied on a compounded annual basis,
would result in the redeemable value of the investment at the
end of the period. Advertisements of the Fund's performance
will include the average annual total return of Class A and
Class B for one, five and ten year periods, or for shorter time
periods depending upon the length of time during which the Fund
has operated.
Total return is computed on a per share basis and assumes
the reinvestment of dividends and distributions. Total return
generally is expressed as a percentage rate which is calculated
by combining the income and principal changes for a specified
period and dividing by the maximum offering price per share at
the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return. Total
return may also be calculated by using the net asset value per
share at the beginning of the period instead of the maximum
offering price per share at the beginning of the period for
Class A shares or without giving effect to any applicable CDSC
at the end of the period for Class B shares. Calculations based
on the net asset value per share do not reflect the deduction of
the applicable sales charge which, if reflected, would reduce
the performance quoted.
Performance will vary from time to time and past results
are not necessarily representative of future results. You
should remember that performance is a function of portfolio
management in selecting the type and quality of portfolio
securities and is affected by operating expenses. Performance
information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Comparative performance information may be used from time
to time in advertising or marketing the Fund's shares, including
data from Lipper Analytical Services, Inc., Standard & Poor's
500 Composite Stock Price Index, the Dow Jones Industrial
Average, Morningstar, Inc. and other industry publications.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust
under the laws of the Commonwealth of Massachusetts pursuant to
an Agreement and Declaration of Trust (the "Trust Agreement")
dated July 24, 1985, and commenced operations on October 1,
1986. The Fund is authorized to issue an unlimited number of
shares of beneficial interest, par value $.001 per share. The
Fund's shares are classified into two classes. Each share has
one vote and shareholders will vote in the aggregate and not by
class except as otherwise required by law or when class voting
is permitted by the Board of Trustees. Holders of Class A and
Class B shares, however, will be entitled to vote on matters
submitted to shareholders pertaining to the Shareholder Service
Plan and only holders of Class B shares will be entitled to vote
on matters submitted to shareholders pertaining to the
Distribution Plan.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of
the Fund. However, the Trust Agreement disclaims shareholder
liability for acts or obligations of the Fund and requires that
notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Fund or a Trustee.
The Trust Agreement provides for indemnification from the Fund's
property for all losses and expenses of any shareholder
personally held liable for the obligations of the Fund. Thus,
the risk of a shareholder's incurring financial loss on account
of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations, a
possibility which management believes is remote. Upon payment
of any liability incurred by the Fund, the shareholder paying
such liability will be entitled to reimbursement from the
general assets of the Fund. The Trustees intend to conduct the
operations of the Fund in such a way so as to avoid, as far as
possible, ultimate liability of the shareholders for liabilities
of the Fund. As described under "Management of the Fund" in the
Fund's Statement of Additional Information, the Fund ordinarily
will not hold shareholder meetings; however, shareholders under
certain circumstances may have the right to call a meeting of
shareholders for the purpose of voting to remove Trustees.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-645-6561. In New York City, call
1-718-895-1206; on Long Island, call 794-5452.
No person has been authorized to give any information or to
make any representations other than those contained in this
Prospectus and in the Fund's official sales literature in
connection with the offer of the Fund's shares, and, if given or
made, such other information or representations must not be
relied upon as having been authorized by the Fund. This
Prospectus does not constitute an offer in any State in which,
or to any person to whom, such offering may not lawfully be
made.
<PAGE>
DREYFUS STRATEGIC INVESTING
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MARCH 1, 1995
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of Dreyfus Strategic Investing (the
"Fund"), dated March 1, 1995, as it may be revised from time to
time. To obtain a copy of the Fund's Prospectus, please
write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . B-13
Management Agreement . . . . . . . . . . . . . . . . . . B-17
Purchase of Fund Shares. . . . . . . . . . . . . . . . . B-19
Distribution Plan and Shareholder Services Plan. . . . . B-21
Redemption of Fund Shares. . . . . . . . . . . . . . . . B-23
Shareholder Services . . . . . . . . . . . . . . . . . . B-25
Determination of Net Asset Value . . . . . . . . . . . . B-29
Dividends, Distributions and Taxes . . . . . . . . . . . B-29
Portfolio Transactions . . . . . . . . . . . . . . . . . B-32
Performance Information. . . . . . . . . . . . . . . . . B-33
Information About the Fund . . . . . . . . . . . . . . B-34
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . B-35
Appendix . . . . . . . . . . . . . . . . . . . . . . . . B-36
Financial Statements . . . . . . . . . . . . . . . . . . B-41
Report of Independent Auditors . . . . . . . . . . . . . B-53
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"DESCRIPTION OF THE FUND."
Management Policies
The Fund engages in the following practices in furtherance
of its objective.
Leverage Through Borrowing. The Fund may borrow for
investment purposes. The Investment Company Act of 1940 requires
the Fund to maintain continuous asset coverage (that is,
total assets including borrowings, less liabilities exclusive of
borrowings) of 300% of the amount borrowed. If the 300% asset
coverage should decline as a result of market fluctuations or
other reasons, the Fund may be required to sell some of its
portfolio holdings within three days to reduce the debt and
restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities
at that time. The Fund also may be required to maintain minimum
average balances in connection with such borrowing or to pay a
commitment or other fee to maintain a line of credit;
either of these requirements would increase the cost of
borrowings over the stated interest rate. To the extent the Fund
enters into a reverse repurchase agreement, the Fund will
maintain in a segregated custodial account cash or U.S.
Government securities or other high quality liquid debt
securities at least equal to the aggregate amount of its reverse
repurchase obligations, plus accrued interest, in certain cases,
in accordance with releases promulgated by the Securities and
Exchange Commission. The Securities and Exchange Commission views
reverse repurchase transactions as collateralized borrowings by
the Fund. These agreements, which are treated as if
reestablished each day, are expected to provide the Fund
with a flexible borrowing tool.
Short Sales. Until the Fund replaces a borrowed
security in connection with a short sale, the Fund will:
(a) maintain daily a segregated account, containing cash or U.S.
Government Securities, at such a level that (i) the amount
deposited in the account plus the
amount deposited with the broker as collateral will equal the
current value of the security sold short and (ii) the amount
deposited in the segregated account plus the
amount deposited with the broker as collateral will not be less
than the market value of the security at the time it was sold
short; or (b) otherwise cover its short position.
Options Transactions. The Fund may engage in options
transactions, such as purchasing or writing covered call or put
options. The principal reason for writing covered call options
is to realize, through the receipt of premiums, a greater return
than would be realized on the Fund's portfolio securities alone.
In return for a premium, the writer of a covered call
option forfeits the right to any appreciation in the value of the
underlying security above the strike price for the life of the
option (or until a closing purchase transaction can be effected).
Nevertheless, the call writer
retains the risk of a decline in the price of the underlying
security. Similarly, the principal reason for writing covered
put options is to realize income in the form of premiums. The
writer of a covered put option accepts the risk of a decline in
the price of the underlying security. The size of
the premiums that the Fund may receive may be adversely affected
as new or existing institutions, including other investment
companies, engage in or increase their option-writing activities.
Options written ordinarily will have expiration dates
between one and nine months from the date written. The exercise
price of the options may be below, equal to or above the market
values of the underlying securities at
the times the options are written. In the case of call options,
these exercise prices are referred to as "in-the-money,"
"at-the-money" and "out-of-the-money," respectively. The Fund
may write (a) in-the-money call
options when the Manager expects that the price of the underlying
security will remain stable or decline moderately during the
option period, (b) at-the-money call options when the Manager
expects that the price of the underlying security will remain
stable or advance moderately during the option period and (c)
out-of-the-money call options when the Manager expects
that the premiums received from writing the call option plus the
appreciation in market price of the underlying security up to the
exercise price will be greater than the appreciation in the price
of the underlying security alone.
In these circumstances, if the market price of the underlying
security declines and the security is sold at this lower price,
the amount of any realized loss will be offset wholly or in part
by the premium received.
Out-of-the-money, at-the-money and in-the-money put options (the
reverse of call options as to the relation of exercise price to
market price) may be utilized in the same market environments
that such call options are used in equivalent transactions.
So long as the Fund's obligation as the writer of an option
continues, the Fund may be assigned an exercise notice by the
broker-dealer through which the option was sold, requiring the
Fund to deliver, in the case of a call, or take delivery of, in
the case of a put, the underlying security against payment of the
exercise price. This obligation terminates when the
option expires or the Fund effects a closing purchase
transaction. The Fund
can no longer effect a closing purchase transaction with respect
to an option once it has been assigned an exercise notice.
An option position may be closed out only if a secondary
market for an option of the same series exists on a recognized
national securities exchange
or in the over-the-counter market. Because of this fact and
current trading conditions, the Fund expects to purchase only
call or put options issued by
the Options Clearing Corporation. The Fund expects to write
options on national securities exchanges and in the
over-the-counter market.
While it may choose to do otherwise, the Fund generally will
purchase or write only those options for which the Manager
believes there is an active
secondary market so as to facilitate closing transactions. There
is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for
any particular option or at any particular time, and for some
options no such secondary market may exist.
A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than
anticipated trading activity or order flow, or other unforeseen
events, at times have rendered certain
clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on
certain types of orders or trading halts or suspensions in one or
more options. There can be no assurance that similar events, or
events that may otherwise interfere with the timely execution of
customers' orders, will not recur. In such event, it
might not be possible to effect closing transactions in
particular options.
If as a covered call option writer the Fund is unable to effect a
closing purchase transaction in a secondary market, it will not
be able to sell the
underlying security until the option expires or it delivers the
underlying
security upon exercise or it otherwise covers its position.
Stock Index Options The Fund may purchase and write put and
call options on stock indexes listed on national securities
exchanges or traded in the over-the-counter market as an
investment vehicle for the purpose of
realizing its investment objective of capital appreciation or for
the purpose
of hedging its portfolio. A stock index fluctuates with changes
in the market values of the stocks included in the index.
Options on stock indexes are similar to options on stock
except that (a) the expiration cycles of stock index options are
monthly, while those of
stock options are currently quarterly, and (b) the delivery
requirements are different. Instead of giving the right to take
or make delivery of a stock at a specified price, an option on a
stock index gives the holder the right
to receive a cash "exercise settlement amount" equal to (i) the
amount, if
any, by which the fixed exercise price of the option exceeds (in
the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of exercise,
multiplied by (ii) a fixed "index multiplier." Receipt of this
cash amount will depend upon the closing level
of the stock index upon which the option is based being greater
than, in the case of a call, or less than, in the case of a put,
the exercise price of the option. The amount of cash received
will be equal to such difference between
the closing price of the index and the exercise price of the
option expressed
in dollars times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make
delivery of this amount. The writer may offset its position in
stock index options prior to
expiration by entering into a closing transaction on an exchange
or it may let the option expire unexercised.
Futures Contracts and Options on Futures Contracts. Upon
exercise of an option, the writer of the option delivers to the
holder of the option the futures position and the accumulated
balance in the writer's futures margin account, which represents
the amount by which the market price of the futures
contract exceeds, in the case of a call, or is less than, in the
case of a put, the exercise price of the option on the futures
contract. The potential
loss related to the purchase of options on futures contracts is
limited to the premium paid for the option (plus transaction
costs). Because the value of the option is fixed at the time of
sale, there are no daily cash payments
to reflect changes in the value of the underlying contract;
however, the value of the option does change daily and that
change would be reflected in the net asset value of the Fund.
Interest Rate Futures Contracts and Options on Interest Rate
Futures Contracts. Upon exercise of an option, the delivery of
the futures position by the writer of the option to the holder of
the option will be accompanied by delivery of the accumulated
balance in the writer's futures margin
account, which represents the amount by which the market price of
the futures contract exceeds, in the case of a call, or is less
than, in the case of a put, the exercise price of the option on
the futures contract. The potential loss related to the purchase
of an option on interest rate futures contracts
is limited to the premium paid for the option (plus transaction
costs).
Because the value of the option is fixed at the point of sale,
there are no daily cash payments to reflect changes in the value
of the underlying contract; however, the value of the option does
change daily and that change
would be reflected in the net asset value of the Fund.
Foreign Currency Transactions. The Fund may not hedge with
respect to a particular currency to an extent greater than the
aggregate market value (at the time of making such sale) of the
securities held in its portfolio denominated or quoted in or
currently convertible into that particular currency. If the Fund
enters into a hedging transaction, the Fund will
deposit with its custodian cash or readily marketable securities
in a segregated account of the Fund in an amount at least equal
to the value of the Fund's total assets committed to the
consummation of the forward
contract. If the value of the securities placed in the
segregated account declines, additional cash or securities will
be placed in the account so that the value of the account will
equal the amount of the Fund's commitment with
respect to the contract. Hedging transactions may be made from
any foreign
currency into U.S. dollars or into other appropriate currencies.
At or before the maturity of a forward contract, the Fund
either may sell a portfolio security and make delivery of the
currency, or retain the
security and offset its contractual obligation to deliver the
currency by
purchasing a second contract pursuant to which the Fund will
obtain, on the
same maturity date, the same amount of the currency which it is
obligated to
deliver. If the Fund retains the portfolio security and engages
in an offsetting transaction, the Fund, at the time of execution
of the offsetting transaction, will incur a gain or a loss to the
extent that movement has
occurred in forward contract prices. Should forward prices
decline during the period between the Fund's entering into a
forward contract for the sale
of a currency and the date it enters into an offsetting contract
for the purchase of the currency, the Fund will realize a gain to
the extent the
price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward prices
increase, the Fund will suffer a loss to the extent the price of
the currency it has agreed to purchase exceeds the price of the
currency it has agreed to sell.
The cost to the Fund of engaging in currency transactions
varies with factors such as the currency involved, the length of
the contract period and the market conditions then prevailing.
Because transactions in currency exchange usually are conducted
on a principal basis, no fees or commissions are involved. The
use of forward currency exchange contracts does not
eliminate fluctuations in the underlying prices of the
securities, but it
does establish a rate of exchange that can be achieved in the
future. If a devaluation generally is anticipated, the Fund may
not be able to contract to
sell the currency at a price above the devaluation level it
anticipates. The
requirements for qualification as a regulated investment company
under the Internal Revenue Code of 1986, as amended (the "Code"),
may cause
the Fund to restrict the degree to which it engages in currency
transactions.
See "Dividends, Distributions and Taxes."
Lending Portfolio Securities. To a limited extent, the Fund
may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all
times is
maintained in an amount equal to at least 100% of the current
market value of
the securities loaned. By lending its portfolio securities, the
Fund can
increase its income through the investment of the cash
collateral. For
purposes of this policy, the Fund considers collateral consisting
of U.S. Government securities or irrevocable letters of credit
issued by banks whose
securities meet the standards for investment by the Fund to be
the equivalent of cash. From time to time, the Fund may return
to the borrower or a third
party which is unaffiliated with the Fund, and which is acting as
a "placing broker," a part of the interest earned from the
investment of collateral received for securities loaned. Such
loans may not exceed 33/% of the value of the Fund's total
assets.
The Securities and Exchange Commission currently requires
that the following conditions must be met whenever portfolio
securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the
borrower;
(2) the borrower must increase such collateral whenever the
market value of the securities rises above the level of such
collateral; (3) the Fund must be able to terminate the loan at
any time; (4) the Fund must receive reasonable
interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase
in market
value; (5) the Fund may pay only reasonable custodian fees in
connection with
the loan; and (6) while voting rights on the loaned securities
may pass to the borrower, the Fund's Board of Trustees must
terminate the loan and regain the right to vote the securities if
a material event adversely affecting the
investment occurs. These conditions may be subject to future
modification.
Repurchase Agreements. The Fund's custodian or
sub-custodian will have custody of, and will hold in a segregated
account, securities acquired by the
Fund under a repurchase agreement. Repurchase agreements are
considered by
the staff of the Securities and Exchange Commission to be loans
by the Fund.
In an attempt to reduce the risk of incurring a loss on a
repurchase agreement, the Fund will enter into repurchase
agreements only with domestic
banks with total assets in excess of one billion dollars, or
primary government securities dealers reporting to the Federal
Reserve Bank of New York, with respect to securities of the type
in which the Fund may invest,
and will require that additional securities be deposited with it
if the value
of the securities purchased should decrease below the resale
price. The Advisers will monitor on an ongoing basis the value
of the collateral to
assure that it always equals or exceeds the repurchase price.
The Fund will
consider on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.
Illiquid Securities
If a substantial market of qualified institutional buyers
develops
pursuant to Rule 144A under the Securities Act of 1933, as
amended, for
certain restricted securities held by the Fund, the Fund intends
to treat
such securities as liquid securities in accordance with
procedures approved
by the Fund's Board of Directors. Because it is not possible to
predict with
assurance how the market for restricted securities pursuant to
Rule 144A will
develop, the Fund's Board of Directors has directed the addresses
to monitor
carefully the Fund's investments in such securities with
particular regard to
trading activity, availability of reliable price information and
other
relevant information. To the extent that for a period of time,
qualified
institutional buyers cease purchasing restricted securities
pursuant to Rule
144A, the Fund's investing in such securities may have the effect
of increasing the level of illiquidity in the Fund's portfolio
during such period.
Portfolio Securities. The Fund invests principally in
common stocks of domestic issuers, as well as securities of
foreign companies and foreign governments. Investments also may
be made in convertible securities,
preferred stocks and debt securities without limitation when
management believes that such securities offer opportunities for
capital growth.
Investment considerations with respect to lower rated debt
securities are set forth below.
Risk Factors
Lower Rated Securities. The Fund is permitted to invest in
securities rated below Baa by Moody's Investors Service, Inc.
("Moody's") and below BBB by Standard & Poor's Corporation
("S&P") and as low as Caa by Moody's or CCC by S&P. See
"Description of the Fund--Risk Factors--Lower Rated Securities"
in the Prospectus for a discussion of certain risks and
"Appendix" for a
general description of Moody's and S&P ratings. Although ratings
may be useful in evaluating the safety of interest and principal
payments, they do not evaluate the market value risk of these
securities. The Fund will rely on the Manager's judgment,
analysis and experience in evaluating the
creditworthiness of an issuer. In this evaluation, the Manager
will take into consideration, among other things, the issuer's
financial resources, its sensitivity to economic conditions and
trends, its operating history, the quality of the issuer's
management and regulatory matters. It also is
possible that a rating agency might not timely change the rating
on a particular issue to reflect subsequent events. Once the
rating of a security
in the Fund's portfolio has been changed, the Manager will
consider all
circumstances deemed relevant in determining whether the Fund
should continue to hold the security.
Investors should be aware that the market values of many of
these securities tend to be more sensitive to economic conditions
than are higher
rated securities and will fluctuate over time. These securities
are considered by S&P and Moody's, on balance, as predominantly
speculative with respect to capacity to pay
interest and repay principal in accordance with
the terms of the obligation and generally will involve more
credit risk than securities in the higher rating categories.
Companies that issue certain of these securities often are
highly leveraged and may not have available to them more
traditional methods of financing. Therefore, the risk associated
with acquiring the securities of such issuers generally is
greater than is the case with the higher rated
securities. For example, during an economic downturn or a
sustained period of rising interest rates, highly leveraged
issuers of these securities may experience financial stress and
may not have sufficient revenues to meet
their interest payment obligations. The issuer's ability to
service its debt
obligations also may be affected adversely by specific corporate
developments
or the issuer's inability to meet specific projected business
forecasts, or
the unavailability of additional financing. The risk of loss
because of
default by the issuer is significantly greater for the holders of
these securities because such securities generally are unsecured
and often are subordinated to other creditors of the issuer.
Because there is no established retail secondary market for
many of these securities, the Manager anticipates that such
securities could be sold only to a limited number of dealers or
institutional investors. To the extent a secondary trading
market for these bonds does exist, it generally is
not as liquid as the secondary market for higher rated
securities. The lack of a liquid secondary market may have an
adverse impact on market price and yield and the Fund's ability
to dispose of particular issues when necessary
to meet the Fund's liquidity needs or in response to a specific
economic event such as a deterioration in the creditworthiness of
the issuer. The lack of a liquid secondary market for certain
securities also may make it more difficult for the Fund to obtain
accurate market quotations for purposes of valuing the Fund's
portfolio and calculating its net asset value. Adverse
publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of
these securities. In such cases, judgment may play a greater
role in valuation because less reliable, objective data may be
available.
The Fund may acquire these securities during an initial
offering. Such securities may involve special risks because they
are new issues. The Fund has no arrangement with the Distributor
or any other persons concerning the acquisition of such
securities, and the Manager will review carefully the
credit and other characteristics pertinent to such new issues.
Zero Coupon Securities. Lower rated zero coupon securities
and pay-in-kind bonds in which the Fund may invest up to 5% of
its net assets, involve special considerations. Zero coupon
securities are debt obligations which do not entitle the holder
to any periodic payments of interest prior to maturity or a
specified cash payment date when the securities begin paying
current interest (the "cash payment date") and therefore are
issued and traded at a discount from their face amount or par
value. The discount varies depending on the time remaining until
maturity or cash payment date, prevailing interest rates,
liquidity of the security and perceived credit
quality of the issuer. The discount, in the absence of financial
difficulties of the issuer, decreases as the final maturity or
cash payment date of the security approaches.
The market prices of zero coupon securities generally are
more volatile than the market prices of securities that pay
interest periodically and are likely to respond to changes in
interest rates to a greater degree than do
non-zero coupon securities having similar maturities and credit
quality. The credit risk factors pertaining to lower rated
securities also apply to lower rated zero coupon securities and
pay-in-kind bonds. Such zero coupon
securities, pay-in-kind or delayed interest bonds carry an
additional risk in that, unlike bonds which pay interest
throughout the period to maturity, the Fund will realize no cash
until the cash payment date unless a portion of
such securities are sold and, if the issuer defaults, the Fund
may obtain no return at all on its investment. See "Dividends,
Distributions and Taxes."
Investment Restrictions
The Fund has adopted investment restrictions numbered 1
through 13 as fundamental policies. These restrictions cannot be
changed without approval by the holders of a majority (as defined
in the Investment Company Act of 1940 (the "Act")) of the Fund's
outstanding voting shares. Investment restriction number 14 is
not a fundamental policy and may be changed by a
vote of a majority of the Trustees at any time. The Fund may
not:
1. Purchase securities of any company having less than
three years' continuous operations (including operations of any
predecessors) if such purchase would cause the value of the
Fund's investments in all such companies to exceed 5% of the
value of its total assets.
2. Purchase securities of closed-end investment companies
except (a) in the open market where no commission except the
ordinary broker's commission is paid, which purchases are limited
to a maximum of (i) 3% of the total voting stock of any one
closed-end investment company, (ii) 5% of its
net assets with respect to any one closed-end investment company
and (iii) 10% of its net assets in the aggregate, or (b) those
received as part of a merger or consolidation. The Fund may not
purchase the securities of open-end investment companies other
than itself.
3. Purchase or retain the securities of any issuer if the
officers,
Trustees or Directors of the Fund or the Manager individually own
beneficially more than 1/2 of 1% of the securities of such issuer
or together own beneficially more than 5% of the securities of
such issuer.
4. Invest in commodities, except that the Fund may
purchase and sell futures contracts, including those relating to
indexes, and options on futures contracts or indexes.
5. Purchase, hold or deal in real estate, or oil and gas
interests,
but the Fund may purchase and sell securities that are secured by
real estate and may purchase and sell securities issued by
companies that invest or deal in real estate.
6. Borrow money, except to the extent permitted under the
Act. For purposes of this investment restriction, the entry into
options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or indexes
shall not constitute borrowing.
7. Pledge, mortgage or hypothecate its assets, except to
the extent necessary to secure permitted borrowings and to the
extent related to the
deposit of assets in escrow in connection with writing covered
put and call options and the purchase of securities on a
when-issued or delayed-delivery basis and collateral and initial
or variation margin arrangements with
respect to options, futures contracts, including those relating
to indexes, and options on futures contracts or indexes.
8. Make loans to others, except through the purchase of
debt obligations. However, the Fund may lend its portfolio
securities in an amount not to exceed 33/% of the value of its
total assets. Any loans of portfolio securities will be made
according to guidelines established by the
Securities and Exchange Commission and the Fund's Trustees.
9. Act as an underwriter of securities of other issuers,
except to the extent the Fund may be deemed an underwriter under
the Securities Act of 1933, as amended, by virtue of disposing of
portfolio securities.
10. Invest in the securities of a company for the purpose
of exercising management or control, but the Fund will vote the
securities it owns in its portfolio as a shareholder in
accordance with its views.
11. Purchase, sell or write puts, calls or combinations
thereof, except
as described in the Fund's Prospectus and Statement of Additional
Information.
12. Invest more than 25% of its assets in investments in
any particular industry or industries (including banking),
provided that, when the Fund has adopted a temporary defensive
posture, there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
13. Purchase warrants in excess of 2% of net assets. For
purposes of this restriction, such warrants shall be valued at
the lower of cost or market, except that warrants acquired by the
Fund in units or attached to securities shall not be included
within this 2% restriction.
14. Enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
15% of the value of the Fund's net assets would be so invested.
If a percentage restriction is adhered to at the time an
investment is made, a later increase in percentage resulting from
a change in values or assets will not constitute a violation of
such restriction.
The Fund may make commitments more restrictive than the
restrictions listed above so as to permit the sale of Fund shares
in certain states.
Should the Fund determine that a commitment is no longer in the
best interests of the Fund and its shareholders, the Fund
reserves the right to revoke the commitment by terminating the
sale of Fund shares in the state involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information
as to their
principal business occupations during at least the last five
years, are shown
below. Each Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees of the Fund
*DAVID W. BURKE, Trustee. Vice President and Chief Administrative
Officer of Dreyfus since October 1990 and an officer, director or
trustee of other investment companies advised or administered by
Dreyfus. From 1977 to 1990, Mr. Burke was involved in the
management of national television news, as Vice President and
Executive Vice President of ABC News, and subsequently as
President of CBS News.
DIANE DUNST, Trustee. Since January 1992, President of Diane
Dunst Promotion, Inc., a full service promotion agency. From
January 1989 to January 1992, Director of Promotion Services,
Lear's Magazine. From 1985 to January 1989, she was Sales
Promotion Manager of ELLE Magazine.
Her address is 1070 Park Avenue, New York, New York 10021.
*DAVID P. FELDMAN, Trustee. Chairman and Chief Executive Officer
at AT&T Investment Management Corporation. He is also a trustee
of Corporate Property Investors, a real estate investment
company. His address is One Oak Way, Berkeley Heights, New
Jersey 07922.
ROSALIND GERSTEN JACOBS, Trustee. Director of Merchandise and
Marketing for
Corporate Property Investors, a real estate investment
company. From 1974 to 1976, she was owner and manager of a
merchandise and marketing consulting firm. Prior to 1974, she
was Vice President of Macy's, New York. Her address is c/o
Corporate Property Investors, 305 East 47th Street, New York, New
York 10017.
JAY I. MELTZER, Trustee. Physician engaged in private practice
specializing in internal medicine. He is also a member of the
Advisory Board of the Section of Society and Medicine, College of
Physicians and Surgeons, Columbia University and Clinical
Professor of Medicine, Department of Medicine, Columbia
University College of Physicians and Surgeons. His
address is 903 Park Avenue, New York, New York 10021.
DANIEL ROSE, Trustee. President and Chief Executive Officer of
Rose Associates, Inc., a New York based real estate development
and management firm. He is also Chairman of the Housing
Committee of The Real Estate Board of New York, Inc., and a
Trustee of Corporate Property Investors, a real estate investment
company. His address is c/o Rose Associates, Inc., 380 Madison
Avenue, New York, New York 10017.
WARREN B. RUDMAN, Trustee. Since January 1993, Partner in the
law firm Paul, Weiss, Rifkind, Wharton & Garrison. From January
1981 to January 1993, Mr. Rudman served as a United States
Senator from the state of New Hampshire. Also, since January
1993, Mr. Rudman has served as Vice Chairman of the Federal
Reserve Bank of Boston and as a director of Chubb Corporation.
Since 1988, Mr. Rudman has served as a trustee of
Boston College and since 1986 as a member of the Senior
Advisory Board of the Institute of Politics of the Kennedy School
of Government at Harvard University. His address is c/o Paul,
Weiss, Rifkind, Wharton & Garrison, 1615 L. Street, N.W.,
Washington, D.C. 20036.
SANDER VANOCUR, Trustee. Since January 1992, President of Old
Owl Communications, a full-service communications firm. Since
November 1989, Mr. Vanocur has served as a Director of the Damon
Runyon-Walter Winchell Cancer Research Fund. From June 1986 to
December 1991, he was a Senior Correspondent of ABC News and,
from October 1986 to December 31, 1991, he was Anchor of the ABC
News program "Business World," a weekly business program on the
ABC television network. His address is 2928 P Street, N.W.,
Washington, D.C. 20007.
The Trustees are also trustees of Dreyfus BASIC U.S.
Government Money Market Fund, Dreyfus California Intermediate
Municipal Bond Fund, Dreyfus
Connecticut Intermediate Municipal Bond Fund, Dreyfus
Massachusetts Intermediate Municipal Bond Fund and Dreyfus
Strategic Income, and directors of Dreyfus BASIC Money Market
Fund, Inc., Dreyfus Strategic Governments
Income, Inc. and FN Network Tax Free Money Market Fund, Inc.
Messrs. Feldman, Rose and Vanocur are also directors of Dreyfus
New Jersey Municipal
Bond Fund, Inc., managing general partners of Dreyfus Strategic
Growth, L.P. and Dreyfus Strategic World Investing, L.P., and
trustees of Dreyfus Florida Intermediate Municipal Bond Fund,
Dreyfus Index Fund, Dreyfus New York Insured Tax Exempt Bond Fund
and Dreyfus Investors GNMA Fund, Dreyfus 100%
U.S. Treasury Intermediate Term Fund, Dreyfus 100% U.S. Treasury
Long Term Fund, Dreyfus 100% U.S. Treasury Money Market Fund,
Dreyfus 100% U.S.
Treasury Short Term Fund. Mr. Feldman is also a trustee of
Dreyfus Index Fund and a director of Dreyfus Edison Electric
Index Fund, Inc., Dreyfus Life and Annuity Index Fund, Inc.,
Peoples Index Fund, Inc. and Peoples S&P MidCap
Index Fund, Inc and Premier Global Investing. Mr. Rudman is also
a trustee of Dreyfus Cash Management, Dreyfus Government Cash
Management, Dreyfus Municipal Cash Management, Dreyfus New York
Municipal Cash Management,
Dreyfus Tax Exempt Cash Management, Dreyfus Treasury Cash
Management and Dreyfus Treasury Prime Cash Management, and a
director or Dreyfus Cash Management Plus, Inc. Mr. Burke is also
a director of _____________________.
Mr. Jacobs is also a director of _____________________.
There ordinarily will be no meetings of shareholders for the
purpose of electing Trustees unless and until such time as less
than a majority of the
Trustees holding office have been elected by shareholders, at
which time the Trustees then in office will call a shareholders'
meeting for the election of Trustees. Under the Act,
shareholders of record of not less than two-thirds
of the outstanding shares of the Fund may remove a Trustee
through a declaration in writing or by vote cast in person or by
proxy at a meeting called for that purpose. Under the Fund's
Agreement and Declaration of Trust, the Trustees are required to
call a meeting of shareholders for the
purpose of voting upon the question of removal of any such
Trustee when requested in writing to do so by the shareholders of
record of not less than 10% of the Fund's outstanding shares.
For so long as the Fund's plans described in the section
captioned "Distribution Plan and Shareholder Service Plan" remain
in effect, the Trustees of the Fund who are not "interested
persons" of the Fund, as defined
in the Act, will be selected and nominated by the Trustees who
are not "interested persons" of the Fund.
The Fund does not pay any remuneration to its officers and
Trustees other than fees and expenses to Trustees who are not
officers, directors, or employees or holders of 5% or more of the
outstanding voting securities of the Manager, which totalled
$27,708 for the fiscal year ended October 31, 1994 for such
Trustees as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief
Operating Officer of the Distributor and an officer of other
investment companies advised or administered by the Manager.
From December 1991 to July 1994, she was President and Chief
Compliance Officer of Funds Distributor, Inc., a wholly-owned
subsidiary of The Boston Company, Inc. Prior to December 1991,
she served as Vice President and Controller, and
later as Senior Vice President, of The Boston Company
Advisors, Inc.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice
President and General Counsel of the Distributor and an officer
of other investment companies advised or administered by the
Manager. From February 1992 to July 1994, he served as Counsel
for The Boston Company Advisors, Inc. From August 1990 to
February 1992, he was employed as an Associate at
Ropes & Gray, and prior to August 1990, he was employed as
an Associate at Sidley & Austin.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior
Vice President of the Distributor and an officer of other
investment companies advised or administered by the Manager.
From 1988 to August 1994, he was Manager of the High Performance
Fabric Division of Springs Industries Inc.
ERIC B. FISCHMAN, Vice President and Assistant Secretary.
Associate General Counsel of the Distributor and an officer of
other investment companies advised or administered by the
Manager. From September 1992 to August 1994, he was an attorney
with the Board of Governors of the Federal Reserve System.
JOSEPH F. TOWER,III, Assistant Treasurer. Senior Vice President,
Treasurer and Chief Financial Officer of the Distributor and an
officer of other investment companies advised or administered by
the Manager. From July 1988 to August 1994, he was employed by
The Boston Company, Inc. where he held various management
positions in the Corporate Finance and Treasury areas.
JOHN J. PYBURN, Assistant Treasurer, Vice President of the
Distributor and an officer of other investment companies advised
or administered by the Manager. From 1984 to July 1994, he was
Assistant Vice President in the Mutual Fund Accounting Department
of the Administrator.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President
of the Distributor and an officer of other investment companies
advised or administered by the Manager. From March 1992 to July
1994, she was a Compliance Officer for The Managers Funds, a
registered investment company. From March 1990 until September
1991, she was Development Director of The Rockland Center for the
Arts and, prior thereto, was employed as a Research Assistant for
the Bureau of National Affairs.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of
the Distributor and an officer of other investment companies
advised or administered by the Manager. From January 1992 to
July 1994, he was a Senior Legal Product Manager for The Boston
Company Advisors, Inc., and, from January 1990 to January 1992,
he was a mutual fund accountant for The Boston Company Advisors,
Inc.
The address of each officer of the Fund is 200 Park Avenue,
New York, New York 10166.
Trustees and officers of the Fund, as a group, owned less
than 1% of the Fund's shares of beneficial interest outstanding
on December 22, 1994.
The following persons are also officers and/or Directors of the
Manager:
MANAGEMENT AGREEMENT
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"MANAGEMENT OF THE FUND."
The Manager provides management services pursuant to the
Management Agreement (the "Agreement") dated August 24, 1994, as
amended, with the Fund which is subject to annual approval by (i)
the Fund's Board of Trustees or (ii) vote of a majority (as
defined in the Act) of the outstanding voting
securities of the Fund, provided that in either event the
continuance also is
approved by a majority of the Trustees who are not "interested
persons" (as defined in the Act) of the Fund or the Manager, by
vote cast in person at a meeting called for the purpose of voting
such approval. The Agreement was
last approved by shareholders at a meeting held on August 3,
1994, and was last approved by the Board of Trustees, including a
majority of the Trustees who are not "interested persons" of any
party to the Agreement, at a meeting
held on May 12, 1994. The Agreement is terminable without
penalty, on 60
days' notice, by the Fund's Board of Trustees or by vote of the
holders of a majority of the Fund's shares or, upon not less than
90 days' notice, by the
Manager. The Agreement will terminate automatically in the event
of its assignment (as defined in the Act).
The following persons are officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive
Officer; Julian M. Smerling, Vice Chairman of the Board of
Directors; W. Keith Smith, Chief Operating Officer and a
Director; Paul H. Snyder, Vice President and Chief
Financial Officer; Daniel C. Maclean, Vice President and General
Counsel; Elie M. Genadry, Vice President-Institutional Sales;
Henry D. Gottmann, Vice President-Retail Sales and Service;
Jeffrey N. Nachman, Vice President-Mutual
Fund Accounting; Diane M. Coffey, Vice President-Corporate
Communications;
Jay R. DeMartine, Vice President-Retail Marketing; Barbara E.
Casey, Vice President-Retirement Services; Lawrence S. Kash, Vice
Chairman-Distribution;
Philip L. Toia, Vice Chairman-Operations and Administration;
Katherine C. Wickham, Vice President-Human Resources; Mark N.
Jacobs, Vice President-Fund Legal and Compliance, and Secretary;
Maurice Bendrihem, Controller; and Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene
and David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in
accordance with the stated policies of the Fund, subject to the
approval of the Fund's Board of Trustees. The Manager is
responsible for investment decisions, and
provides the Fund with portfolio managers who are authorized by
the Board of Trustees to execute purchases and sales of
securities. The Fund's portfolio managers are Richard C.
Shields, Howard Stein and Wolodymyr Wronskyj. The
Manager also maintains a research department with a professional
staff of portfolio managers and securities analysts who provide
research services for the Fund as well as for other funds advised
by the Manager. All purchases and sales are reported for the
Trustees' review at the meeting subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by the
Manager. The expenses borne by the Fund include: taxes,
interest, loan commitment fees, dividends
and interest paid on securities sold short, brokerage fees and
commissions, if any, fees of certain Board members who are not
officers, directors, employees or holders of 5% or more of the
outstanding voting securities of the Manager, Securities and
Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses,
costs of maintaining the Fund's existence, costs of independent
pricing services, costs attributable to investor services
(including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and
meetings and any extraordinary expenses. Class A and Class B
shares are subject to an annual
service fee for ongoing personal services relating to shareholder
accounts and services related to the maintenance of shareholder
accounts. In addition, Class B shares are subject to an annual
distribution fee for advertising, marketing and distributing
Class B shares pursuant to
distribution plan adopted in accordance with Rule 12b-1 under the
Act. See "Distribution Plan and Shareholder Service Plan."
As compensation for its services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .75 of
1% of the value of the Fund's average daily net assets. The
management fees for the fiscal years ended October 31, 1992, 1993
and 1994 amounted to $1,547,781, $2,022,123 and
$2,259,762 respectively.
The Manager pays the salaries of all officers and employees
employed by
both it and the Fund, maintains office facilities, and furnishes
statistical
and research data, clerical help, accounting, data processing,
bookkeeping
and internal auditing and certain other required services. The
Manager also
may make such advertising and promotional expenditures, using its
own resources, as it from time to time deems appropriate.
The Manager has agreed that if, in any fiscal year, the
aggregate expenses of the Fund, exclusive of taxes, brokerage,
interest on borrowings and (with the prior written consent of the
necessary state securities commissions) extraordinary expenses,
but including the management fee, exceed
the expense limitation of any state having jurisdiction over the
Fund, the Fund may deduct from the payment to be made to the
Manager under the
Agreement, or the Manager will bear, such excess expense to the
extent required by state law. Such deduction or payment, if any,
will be estimated
daily, and reconciled and effected or paid, as the case may be,
on a monthly basis.
The aggregate of the fees payable to the Manager is not
subject to reduction as the value of the Fund's net assets
increases.
PURCHASE OF FUND SHARES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"HOW TO BUY FUND SHARES."
The Distributor. The Distributor serves as the Fund's
distributor
pursuant to an agreement which is renewable annually. The
Distributor also
acts as distributor for the other funds in the Dreyfus Family of
Funds and for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer
purchase orders
may be made between the hours of 8:00 A.M. and 4:00 P.M., New
York time, on
any business day that The Shareholder Services Group, Inc., the
Fund's transfer and dividend disbursing agent (the "Transfer
Agent"), and the New York Stock Exchange are open. Such
purchases will be credited to the
investor's Fund account on the next bank business day. To
qualify to use
Dreyfus TeleTransfer, payments for purchase of Fund shares must
be drawn on,
and redemption proceeds paid to, the same bank and account as is
designated
on the Account Application or Shareholder Services Form on file.
If the
proceeds of a particular redemption are to be wired to an account
at any other bank, the request must be in writing and
signature-guaranteed. See
also "Redemption of Fund Shares--Dreyfus TeleTransfer
Privilege."
Sales Loads -- Class A. The schedule of sales loads applies
to purchases of Class A shares made by any "purchaser," which
term includes an individual and/or spouse purchasing securities
for his, her or their own
account or for the account of any minor children, or a trustee or
other fiduciary purchasing securities for a single trust estate
or a single fiduciary account trust estate or a single fiduciary
account (including a
pension, profit-sharing or other employee benefit trust created
pursuant to a
plan qualified under Section 401 of the Code) although more than
one beneficiary is involved; or a group of accounts established
by or on behalf
of the employees of an employer or affiliated employers pursuant
to an
employee benefit plan or other program (including accounts
established
pursuant to Sections 403(b), 408(k), and 457 of the Code); or an
organized
group which has been in existence for more than six months,
provided that it
is not organized for the purpose of buying redeemable securities
of a
registered investment company and provided that the purchases are
made through a central administration or a single dealer, or by
other means which result in economy of sales effort or expense.
Offering Prices
Based upon the Fund's net asset value at the close of business on
October 31, 1994 the maximum offering price of the Fund's shares
would have been as follows:
Class A shares:
NET ASSET VALUE per share . . . . . . . . . . $19.83
Sales load for individual sales of shares
aggregating less than $50,000 - 4.5 percent
of offering price (approximately 4.7 percent
of net asset value per share) . . . . . . . .93
Offering price to public. . . . . . . . . . . $20.76
Class B shares:
NET ASSET VALUE, redemption price and offering
price to public*. . . . . . . . . . . . . $19.58
_________
* Class B shares are subject to a contingent deferred sales
charge on certain redemptions. She "How to Redeem Fund Shares"
in the Fund's Prospectus.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN."
The Class A and Class B shares are subject to a Shareholder
Services Plan and the Class B shares only are subject to a
Distribution Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by
the Securities and Exchange Commission under the Act, provides,
among other
things, that an investment company may bear expenses of
distributing its
shares only pursuant to a plan adopted in accordance with the
Rule. The Fund's Board of Trustees has adopted such a plan (the
"Distribution Plan")
with respect to the Class B shares, pursuant to which the Fund
pays the
Distributor for advertising, marketing and distributing Class B
shares.
Under the Distribution Plan, the Distributor may make payments to
certain
financial institutions, securities dealers, and other financial
industry
professionals (collectively, "Service Agents") in respect of
these services.
The Fund's Board of Trustees believes that there is a reasonable
likelihood
that the Distribution Plan will benefit the Fund and holders of
its Class B
shares. In some states, certain financial institutions effecting
transactions in Fund shares may be required to register as
dealers pursuant to state law.
A quarterly report of the amounts expended under the
Distribution Plan,
and the purposes for which such expenditures were incurred, must
be made to
the Trustees for their review. In addition, the Distribution
Plan provides
that it may not be amended to increase materially the costs which
holders of
Class B shares may bear for distribution pursuant to the
Distribution Plan
without such shareholder approval and that other material
amendments of the
Distribution Plan must be approved by the Board of Trustees, and
by the
Trustees who are not "interested persons" (as defined in the Act)
of the Fund
and have no direct or indirect financial interest in the
operation of the
Distribution Plan or in any agreements entered into in connection
with the
Distribution Plan, by vote cast in person at a meeting called for
the purpose
of considering such amendments. The Distribution Plan is subject
to annual
approval by such vote cast in person at a meeting called for the
purpose of
voting on the Distribution Plan. The Distribution Plan was last
approved by
the Board of Trustees at a meeting held on May 12, 1994. The
Distribution
Plan may be terminated at any time by vote of a majority of the
Trustees who
are not "interested persons" and have no direct or indirect
financial
interest in the operation of the Distribution Plan or in any
related agreements entered into in connection with the
Distribution Plan or by vote of the holders of a majority of the
Class B shares.
For the period from August 24, 1994 through October 31,
1994, $58,353 was charged to the Fund, with respect to Class B
shares, under the Distribution Plan.
Shareholder Services Plan. The Fund has adopted a
Shareholder Services Plan, pursuant to which the Fund pays the
Distributor for the provision of certain services to the holders
of Class A and Class B shares.
A quarterly report of the amounts expended under the
Shareholder
Services Plan, and the purposes for which such expenditures were
incurred,
must be made to the Trustees for their review. In addition, the
Shareholder
Services Plan provides that it may not be amended without
approval of the
Board of Trustees, and by the Trustees who are not "interested
persons" (as
defined in the Act) of the Fund and have no direct or indirect
financial
interest in the operation of the Shareholder Services Plan or in
any
agreements, entered into in connection with the Shareholder
Services Plan, by
vote cast in person at a meeting called for the purpose of
considering such
amendments. The Shareholder Services Plan is subject to annual
approval by
such vote cast in person at a meeting called for the purpose of
voting on the
Shareholder Services Plan. The Shareholder Services Plan was so
approved on
August 11, 1993. The Shareholder Services Plan is terminable at
any time by
vote of a majority of the Trustees who are not "interested
persons" and who
have no direct or indirect financial interest in the operation of
the
Shareholder Services Plan or in any agreements entered into in
connection with the Shareholder Services Plan.
For the period from August 24, 1994 through October 31,
1994, $118,010 was charged to the Fund, with respect to Class A,
and $19,451 was charged to the Fund, with respect to Class B
shares, under the Shareholder Services Plan.
Prior Distribution Plan and Shareholder Services Plan. As of
August 24, 1994, the Fund terminated its then existing Class B
Distribution Plan, which provided for payments to be made to
Dreyfus Service Corporation for advertising, marketing and
distributing Fund shares at an annual rate of .75%. For the
period from November 1, 1993 through August 23, 1994, the
total amount charged to and paid by the Fund under such plan was
$221,693. As of August 24, 1994, the Fund also terminated its
then existing Shareholder Services Plan, which provided for
payments to be made to Dreyfus Service
Corporation for expenses related to providing for shareholder
services. For the period from November 1, 1993 through August
23, 1994, $541,895 was charged to the Fund with respect to Class
A, and $73,898 was charged to the Fund, with respect to Class B,
under such plan.
REDEMPTION OF FUND SHARES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"HOW TO REDEEM FUND SHARES."
Share Certificates; Signatures. Any certificates
representing Fund shares to be redeemed must be submitted with
the redemption request. Written
redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be
guaranteed. Signatures on
endorsed certificates submitted for redemption also must be
guaranteed. The
Transfer Agent has adopted standards and procedures pursuant to
which
signature-guarantees in proper form generally will be accepted
from domestic
banks, brokers, dealers, credit unions, national securities
exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock
Exchange
Medallion Signature Program, the Securities Transfer Agents
Medallion Program
("STAMP"), and the Stock Exchanges Medallion Program. Guarantees
must be
signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request
additional documentation from corporations, executors,
administrators,
trustees or guardians, and may accept other suitable verification
arrangements from foreign investors, such as consular
verification. For more
information with respect to signature-guarantees, please call one
of the telephone numbers listed on the cover.
Dreyfus TeleTransfer Privilege. Investors should be aware
that if they
have selected the Dreyfus TeleTransfer Privilege, any request for
a wire
redemption will be effected as a Dreyfus TeleTransfer transaction
through the
Automated Clearing House ("ACH") system. Redemption proceeds
will be on
deposit in the investor's account at an ACH member bank
ordinarily two
business days after receipt of the redemption request. See
"Purchase of Fund Shares--Dreyfus TeleTransfer Privilege."
Redemption Commitment. The Fund has committed itself to
pay in cash
all redemption requests by any shareholder of record, limited in
amount
during any 90-day period to the lesser of $250,000 or 1% of the
value of the
Fund's net assets at the beginning of such period. Such
commitment is
irrevocable without the prior approval of the Securities and
Exchange
Commission. In the case of requests for redemption in excess of
such amount,
the Board of Trustees reserves the right to make payments in
whole or part in
securities or other assets of the Fund in case of an emergency or
any time a
cash distribution would impair the liquidity of the Fund to the
detriment of
the existing shareholders. In such event, the securities would
be valued in
the same manner as the Fund's portfolio is valued. If the
recipient sold
such securities, brokerage charges would be incurred. In
connection with a
redemption request where the Fund delivers in-kind securities
instead of cash
on settlement date to an Texas investor, the in-kind securities
delivered
will be readily marketable securities to the extent available.
Suspension of Redemption. The right of redemption may be
suspended or
the date of payment postponed (a) during any period when the New
York Stock
Exchange is closed (other than customary weekend and holiday
closings), (b)
when trading in the markets the Fund ordinarily utilizes is
restricted, or
when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its
net asset value is not reasonably practicable, or (c) for such
other periods
as the Securities and Exchange Commission by order may permit to
protect the Fund's shareholders.
SHAREHOLDER SERVICES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"SHAREHOLDER SERVICES."
Fund Exchanges. Class A and Class B shares of the Fund may
be
exchanged for shares of the respective Class of certain other
funds advised
or administered by the Manager. Shares of the same Class of such
other funds
purchased by exchange will be purchased on the basis of relative
net asset value per share as follows:
A. Class A shares of funds purchased without a sales load
may be exchanged for Class A shares of other funds sold with a
sales load, and the applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a
sales load may be exchanged without a sales load for Class A
shares of other funds sold without a sales load.
C. Class A shares of funds purchased with a sales load,
Class A shares of funds acquired by a previous exchange from
Class A shares purchased with a sales load, and additional Class
A shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein
as "Purchased Shares") may be exchanged for Class A shares of
other funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load applicable to
the Offered Shares exceeds the maximum sales load that could have
been imposed in connection with the Purchased Shares (at the time
the Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
D. Class B shares of any fund may be exchanged for Class
B shares of other funds without a sales load. Class B shares of
any fund exchanged for Class shares of another fund will be
subject to the higher applicable contingent deferred sales charge
("CDSC") of the two funds and, for purposes of calculating CDSC
rates and conversion periods, will be deemed to have been held
since the date the Class B shares being exchanged were initially
purchased.
To accomplish an exchange under item C above, shareholders
must notify
the Transfer Agent of their prior ownership of such Class A
shares and their account number.
To request an exchange, an investor or the investor's
Service Agent acting on his behalf must give exchange
instructions to the Transfer Agent in
writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund Shareholders
automatically, unless the
investor checks the relevant "NO" box on the Account Application,
indicated that the investor specifically refuses this privilege.
By using the
Telephone Exchange Privilege, the investor authorizes the
Transfer Agent to
act on telephonic or written exchange instructions from any
person representing himself or herself to be the investor or a
representative of the
investor's Service Agent, and reasonably believed by the Transfer
Agent to be
genuine. Telephone exchanges may be subject to limitations as to
the amount
involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone
exchange.
To establish a Personal Retirement Plan by exchange, shares
of the fund
being exchanged must have a value of at least the minimum initial
investment
required for shares of the same class of the fund into which the
exchange is
being made. For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set
up under a
Simplified Employee Pension Plan ("SEP-IRAs") with only one
participant, the
minimum initial investment is $750. To exchange shares held in
Corporate
Plans, 403(b)(7) Plans and SEP-IRAs with more than one
participant, the
minimum initial investment is $100 if the plan has at least
$2,500 invested
among shares of the same Class of the funds in the Dreyfus Family
of Funds. To exchange shares held in Personal Retirement Plans,
the shares exchanged must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange
Privilege
permits an investor to purchase, in exchange for Class A or Class
B shares of the Fund, shares of the same Class of another fund in
the Dreyfus Family of
Funds. This Privilege is available only for existing accounts.
Shares will
be exchanged on the basis of relative net asset value as
described above
under "Exchange Privilege." Enrollment in or modification or
cancellation of
this Privilege is effective three business days following such
notification
by the investor. An investor will be notified if his account
falls below the
amount designated under this Privilege. In this case, an
investor's account
will fall to zero unless additional investments are made in
excess of the
designated amount prior to the next Auto-Exchange transaction.
Shares held
under IRA and other retirement plans are eligible for this
Privilege.
Exchanges of IRA shares may be made between IRA accounts and from
regular
accounts to IRA accounts, but not from IRA accounts to regular
accounts.
With respect to all other retirement accounts, exchanges may be
made among those accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege
are
available to shareholders resident in any state in which shares
of the fund
being acquired may legally be sold. Shares may be exchanged only
between accounts having identical names and other identifying
designations.
Shareholder Services Forms and prospectuses of the other
funds may be obtained from the Distributor, 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144. The Fund reserves
the right to reject any exchange request in whole or in part.
The Exchange Privilege or Dreyfus Auto-Exchange
Privilege may be modified or terminated at any time upon notice
to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan
permits an investor with a $5,000 minimum account to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed
reinvested dividends and distributions, the investor's shares
will be reduced and eventually may be depleted. An Automatic
Withdrawal Plan may be established by completing the
appropriate application available from the Distributor. There is
a service charge of $.50 for each withdrawal check. Automatic
Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent.
Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan. Class B shares
withdrawn pursuant to the Automatic Withdrawal Plan will be
subject to any applicable CDSC.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows
investors to invest on the payment date their dividends or
dividends and capital gains distributions, if any, from the Fund
in shares of the same Class of another fund in the Dreyfus Family
of Funds of which the investor is a shareholder.
Shares of the same Class of other funds purchased pursuant to
this Privilege
will be purchased on the basis of relative net asset value per
share as follows:
A. Dividends and distributions paid with respect to Class
A shares by a fund may be invested without imposition of a sales
load in Class A shares of other funds that are offered without a
sales load.
B. Dividends and distributions paid with respect to Class
A shares by a fund which does not charge a sales load may be
invested in Class A shares of other funds sold with a sales load,
and the applicable sales load will be deducted.
C. Dividends and distributions paid with respect to Class
A shares by a fund which charges a sales load may be invested in
Class A shares of other funds sold with a sales load (referred to
herein as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load
charged by the fund from which dividends or distributions are
being swept, without giving effect to any reduced loads, the
difference will be deducted.
D. Dividends and distributions paid with respect to Class
B shares by a fund may be invested without imposition of a sales
load in Class B shares of other funds and the applicable CDSC, if
any, will be imposed upon redemption of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement
Plans. The Fund makes available to corporations a variety of
prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan.
In addition,
the Fund makes available Keogh Plans, IRAs, including SEP-IRAs
and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support services
are also
available. For details contact Dreyfus Group Retirement Plans, a
division of the Distributor, by calling toll free 1-800-358-5566.
Investors who wish to purchase Fund shares in conjunction
with a Keogh Plan, a 403(b)(7) Plan or an IRA, including a
SEP-IRA, may request from the Distributor forms for adoption of
such plans.
The entity which acts as custodian may charge a fee for
Keogh Plans,
403(b)(7) Plans or IRAs, payment of which could require the
liquidation of shares. All fees charged are described in the
appropriate form.
SHARES MAY BE PURCHASED IN CONNECTION WITH THESE PLANS ONLY
BY DIRECT REMITTANCE TO THE ENTITY WHICH ACTS AS CUSTODIAN.
PURCHASES FOR THESE PLANS MAY NOT BE MADE IN ADVANCE OF RECEIPT
OF FUNDS.
The minimum initial investment for corporate plans, Salary
Reduction Plans, 403(b)(7) Plans, and SEP-IRAs, with more than
one participant, is $2,500, with no minimum on subsequent
purchases. The minimum initial investment for Dreyfus-sponsored
Keogh Plans, IRAs, SEP-IRAs, and 403(b)(7)
Plans with only one participant is normally $750, with no minimum
on subsequent purchases. Individuals who open an IRA also may
open a non-working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and
the appropriate form of Custodial Agreement for further details
as to eligibility, service fees and tax implications, and should
consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"HOW TO BUY FUND SHARES."
Valuation of Portfolio Securities. Portfolio securities,
including covered call options written by the Fund, are valued at
the last sale price on the securities exchange or national
securities market on which such securities primarily are traded.
Securities not listed on an exchange or national securities
market, or securities in which there were no
transactions, are valued at the average of the most recent bid
and asked prices, except in the case of open short positions
where the asked price is used for valuation purposes. Bid price
is used when no asked price is available. Market quotations for
foreign securities in foreign currencies are translated into U.S.
dollars at the prevailing rates of exchange. Any securities or
other assets for which recent market quotations are not readily
available are valued at fair value as determined in good faith by
the Board of Trustees. Expenses and fees, including the
management fee and fees
pursuant to the Shareholder Service Plan, with respect to the
Class A and Class B shares, and fees pursuant to the Distribution
Plan, with respect to the Class B shares only, are accrued daily
and taken into account for the
purpose of determining the net asset value of the relevant Class
of shares.
Because of the difference in operating expenses incurred by each
Class, the per share net asset value of each Class will differ.
New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"DIVIDENDS, DISTRIBUTIONS AND TAXES."
Management believes that the Fund qualified as a "regulated
investment
company" under the Code for fiscal year ended October 31, 1994
and the Fund
intends to continue to so qualify if such qualification is in the
best
interests of its shareholders. As a regulated investment
company, the Fund
will pay no Federal income tax on net investment income and net
realized
capital gains to the extent that such income and gains are
distributed to
shareholders in accordance with the applicable provisions of the
Code. To
qualify as a regulated investment company, the Fund distribute at
least 90%
of its net income (consisting of net investment income and net
short-term
capital gain) to its shareholders, must derive less than 30% of
its annual
gross income from gain on the sale of securities held for less
than three
months, and must meet certain asset diversification and other
requirements.
Accordingly, the Fund may be restricted in the selling of
securities held for
less than three months, and in the utilization of certain of the
investment
techniques described in the Prospectus under "Description of the
Fund -- Investment Techniques." The Code, however, allows the
Fund to net certain offsetting positions making it easier for the
Fund to satisfy the 30% test.
The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by
any government agency.
Any dividend or distribution paid shortly after an
investor's purchase may have the effect of reducing the aggregate
net asset value of his shares below the cost of his investment.
Such a dividend would be a return on investment in an economic
sense, although taxable as stated above. In addition, the Code
provides that if a shareholder holds shares of the Fund
for six months or less and has received a capital gain
distribution with respect to such shares, any loss incurred on
the sale of such shares will be treated as long-term capital loss
to the extent of the capital gain distribution received.
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gains or losses.
However, a portion of the gain or loss realized from the
disposition of non-U.S. dollar denominated securities
(including debt instruments, certain financial forwards, futures
and options,
and certain preferred stock) may be treated as ordinary income or
loss under
Section 988 of the Code. In addition, all or a portion of the
gain realized
from the disposition of certain market discount bonds will be
treated as
ordinary income under section 1276. Finally, all or a portion of
the gain
realized from engaging in "conversion transactions" may be
treated as ordinary income under Section 1258. "Conversion
transactions" are defined to include certain forward, futures,
option and straddle transactions, transactions marketed or sold
to produce capital gains, or transactions
described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss realized by
the Fund from
certain financial futures or forward contracts and certain
options
transactions (other than those taxed under Section 988 of the
Code) will be
treated as 60% long-term capital gain or loss and 40% short-term
capital gain
or loss. Gain or loss will arise upon exercise or lapse of such
futures,
forwards and options as well as from closing transactions. In
addition, any
such futures, forwards or options remaining unexercised at the
end of the
Fund's taxable year will be treated as sold for their then fair
market value,
resulting in additional gain or loss to the Fund characterized in
the manner described above.
Offsetting positions held by the Fund involving certain
financial forwards or futures contracts or options transactions
may be considered, for tax purposes, to constitute "straddles."
"Straddles" are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of
"straddles" is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, overrides or modifies the
provisions of Sections 988 and 1256. As such, all or a portion
of any short- or long-term capital gain from certain "straddle"
transactions may be recharacterized to ordinary income.
If the Fund were treated as entering into "straddles" by
reason of its
engaging in financial forward or futures contracts or options
transactions,
such "straddles" would be characterized as "mixed straddles" if
the futures,
forwards or options comprising a part of such "straddles" were
governed by
Section 1256 of the Code. The Fund may make one or more
elections with
respect to "mixed straddles." If no election is made, to the
extent the
straddle rules apply to positions established by the Fund, losses
realized by
the Fund will be deferred to the extent of unrealized gain in any
offsetting
positions. Moreover, as a result of the straddle and conversion
transaction
rules, short-term capital loss on straddle positions may be
recharacterized
as long-term capital loss, and long-term capital gain may be
recharacterized as short-term capital gain or ordinary income.
Investment by the Fund in securities issued or acquired at
a discount or providing for deferred interest or for payment of
interest in the form of additional obligations could, under
special tax rules, affect the amount, timing and character of
distributions to shareholders. For example, the Fund
could be required to take into account annually a portion of the
discount (or deemed discount) at which such securities were
issued and to distribute such portion in order to maintain its
qualification as a regulated investment
company. In such case, the Fund may have to dispose of
securities which it
might otherwise have continued to hold in order to generate cash
to satisfy these distribution requirements.
PORTFOLIO TRANSACTIONS
The Manager supervises the placement of orders on behalf of
the Fund for the purchase or sale of portfolio securities.
Allocation of brokerage transactions, including their frequency,
is made in the best judgment of the Manager and in a manner
deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most
favorable net price. Subject to this consideration, the brokers
selected include those that supplement the Manager's research
facilities with statistical data, investment information,
economic facts and opinions. Information so received
is in addition to and not in lieu of services required to be
performed by the Manager and the fee of the Manager is not
reduced as a consequence of the
receipt of such supplemental information. Such information may
be useful to
the Manager in serving both the Fund and other funds which it
manages and, conversely, supplemental information obtained by the
placement of business of
other clients may be useful to the Manager in carrying out its
obligation to the Fund. Brokers also are selected because of
their ability to handle special executions such as are involved
in large block trades or broad
distributions, provided the primary consideration is met. Large
block trades
may, in certain cases, result from two or more funds managed by
the Manager
being engaged simultaneously in the purchase or sale of the same
security.
Certain of the Fund's transactions in securities of foreign
issuers may not
benefit from the negotiated commission rates available to the
Fund for transactions in securities of domestic issuers.
Portfolio turnover may vary from year to year, as well as within
a year. High turnover rates are likely to result in
comparatively greater brokerage expenses. The overall
reasonableness of brokerage commissions paid is evaluated by the
Manager based upon its knowledge of available information as to
the general level of commissions paid by other institutional
investors for comparable services.
For the fiscal years ended October 31, 1992, 1993 and 1994
the Fund
paid total brokerage commissions of $1,544,568, $2,720,136 and
$2,132,968,
respectively, none of which was paid to the Distributor. The
above figures
for brokerage commissions paid do not include gross spreads and
concessions
on principal transactions which, where determinable, amounted to
$1,293,013,
$1,603,133 and $1,381,585 in fiscal 1992, 1993 and 1994,
respectively, none of which was paid to the Distributor.
PERFORMANCE INFORMATION
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"PERFORMANCE INFORMATION."
The offering of Class B shares commenced on January 15,
1993 and, accordingly, only limited performance data are
available for Class B at this time.
The average annual total return for Class A for the 1, 5
and 8.044 year periods ended October 31, 1994 was -11.07%, 7.25%
and 11.37%, respectively.
The average annual total return for Class B for the 1 and 1.795
year period ended October 31, 1994 was 10.89% and 0.87%,
respectively. Average annual total return is calculated by
determining the ending redeemable value of an
investment purchased with a hypothetical $1,000 payment made at
the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the
initial investment, taking the "n"th root of
the quotient (where "n" is the number of years in the period) and
subtracting one from the result. A Class's average annual total
return figures calculated in accordance with such formula assume
that in the case of Class A
the maximum sales load has been deducted from the hypothetical
initial investment at the time of purchase or in the case of
Class B the maximum applicable CDSC has been paid upon redemption
at the end of the period.
Total return is calculated by subtracting the amount of the
maximum offering price per share at the beginning of a stated
period from the net asset value per share at the end of the
period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing
the result by the maximum offering price per share at the
beginning of the period. Total return also may be calculated
based on the net asset value per share at the beginning of the
period for Class A shares or without giving
effect to any applicable CDSC at the end of the period for Class
B shares. In such cases, the calculation would not reflect the
deduction of the sales load with respect to Class A shares or any
applicable CDSC with respect to Class B shares, which, if
reflected, would reduce the performance quoted.
The total return for Class A for the period October 16, 1986 to
October 31, 1994, based on the maximum offering price per share,
was 137.72%. Based on net asset value per share, the total
return for Class A was 148.91% for this
period. The total return for the period January 15, 1993 through
October 31, 1994 for Class B, after giving effect to the maximum
applicable CDSC, was 1.56%. Without giving effect to the maximum
applicable CDSC, the total return for Class B was 2.11% for this
period.
Comparative performance may be used from time to time in
advertising
the Fund's shares, including data from Lipper Analytical
Services, Inc.,
Standard & Poor's 500 Composite Stock Price Index, the Dow Jones
Industrial Average, Money Magazine, Morningstar, Inc. and other
industry publications.
From time to time, the Fund may compare its performance against
inflation with the performance of other instruments against
inflation, such as short-term Treasury Bills (which are direct
obligations of the U.S. Government) and
FDIC-insured bank money market accounts. In addition,
advertising for the
Fund may indicate that investors may consider diversifying their
investment
portfolios in order to seek protection of the value of their
assets against inflation.
Advertising materials for the Fund may include reference to
the role played by the Manager or Jack J. Dreyfus, Jr. in
popularizing the concept of
mutual funds as an investment vehicle and may refer to the role
The Dreyfus Corporation and the Dreyfus Family of Funds play or
have played in the mutual
fund industry, and the fact that the mutual fund industry, which
includes Dreyfus and the Dreyfus funds, has, through the wide
variety of innovative
and democratic mutual fund products it has made available,
brought to the
public investment opportunities once reserved for the few.
Advertising
materials may also refer to various Dreyfus investor services,
including, for
example, asset allocation and IRA rollover services. From time
to time
advertising materials for the Fund also may refer to Morningstar
ratings and related analyses supporting the rating.
INFORMATION ABOUT THE FUND
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"GENERAL INFORMATION."
Each Fund share has one vote and, when issued and paid for
in accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares have no preemptive or subscription
rights and are freely transferable.
The Fund sends annual and semi-annual financial statements
to all its shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New
York 10286, acts as custodian of the Fund's assets. The
Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence,
Rhode Island 02904-9671, is the Fund's transfer and dividend
disbursing agent. Neither The Bank of New York nor The
Shareholder Services Group, Inc.
has any part in determining the investment policies of the Fund
or which portfolio securities are to be purchased or sold by the
Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2696, as counsel for the Fund, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of beneficial
interest being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Fund.
APPENDIX
Descriptions of Standard & Poor's Corporation ("S&P") and
Moody's Investors Service, Inc. ("Moody's") ratings.
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest
and repay principal and differ from the highest rated issues only
in a small degree.
A
Bonds rated A have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity
to pay interest and repay principal. Whereas they normally
exhibit adequate protection parameters, adverse economic
conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest
and repay
principal for bonds in this category than for bonds in higher
rated categories.
BB, B, CCC, CC, C
Bonds rated BB, B, CCC, CC and C are regarded as having
predominantly speculative characteristics with respect to
capacity to pay interest and repay principal in accordance with
the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of
speculation.
While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.
BB
Bonds rated BB have less near-term vulnerability to default
than other speculative grade debt. However, they face major
ongoing uncertainties or exposure to adverse business, financial
or economic conditions which could
lead to inadequate capacity to meet timely interest and principal
payments.
B
Bonds rated B have a greater vulnerability to default but
presently have the capacity to meet interest payments and
principal repayments.
Adverse business, financial or economic conditions would likely
impair capacity or willingness to pay interest and repay
principal.
CCC
Bonds rated CCC have a current identifiable vulnerability
to default,
and are dependent upon favorable business, financial and economic
conditions
to meet timely payments of interest and repayment of principal.
In the event
of adverse business, financial or economic conditions, they are
not likely to have the capacity to pay interest and repay
principal.
CC
The rating CC is typically applied to debt subordinated to
senior debt which is assigned an actual or implied CCC- rating.
C
The rating C is typically applied to income bonds on which
no interest is being paid.
Plus (+) or minus (-): The ratings from AA to CCC may be
modified by
the addition of a plus or minus sign to show relative standing
within the major ratings categories.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of
the likelihood of timely payment of debt having an original
maturity of no more than 365 days. Issues assigned an A rating
are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated
with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
A-1
This designation indicates the degree of safety regarding
timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics
are denoted with a plus sign (+) designation.
A-2
Capacity for timely payment on issues with this designation
is strong.
However, the relative degree of safety is not as high as for
issues designated "A-l."
A-3
Issues carrying this designation have a satisfactory
capacity for timely payment. They are, however, somewhat more
vulnerable to the adverse effects of changes in circumstances
than obligations carrying the higher designations.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the
various
protective elements are likely to change, such changes as can be
visualized
are most unlikely to impair the fundamentally strong position of
such issues.
Aa
Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise what
generally are known as high-grade bonds. They are rated lower
than the best bonds because margins of protection may not be as
large in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be
other
elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment
attributes
and are to be considered as upper medium-grade obligations.
Factors giving
security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to
impairment sometime in the future.
Baa
Bonds which are rated Baa are considered as medium-grade
obligations,
i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security may appear adequate for
the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative
elements; their
future cannot be considered as well assured. Often the
protection of
interest and principal payments may be very moderate, and
therefore not well
safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such
issues may be in
default or there may be present elements of danger with respect
to principal or interest.
Ca
Bonds which are rated Ca present obligations which are
speculative in a
high degree. Such issues are often in default or have other
marked shortcomings.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative
standing within the major rating categories, except in the Aaa
category and
in the categories below B. The modifier 1 indicates a ranking
for the
security in the higher end of a rating category; the modifier 2
indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of a rating category.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper
rating
assigned by Moody's. Issuers of P-1 paper must have a superior
capacity for
repayment of short-term promissory obligations, and ordinarily
will be
evidenced by leading market positions in well established
industries, high
rates of return on funds employed, conservative capitalization
structures
with moderate reliance on debt and ample asset protection, broad
margins in
earnings coverage of fixed financial charges and high internal
cash
generation, and well established access to a range of financial
markets and assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2
(P-2) have a
strong capacity for repayment of short-term promissory
obligations. This
ordinarily will be evidenced by many of the characteristics cited
above but
to a lesser degree. Earnings trends and coverage ratios, while
sound, will
be more subject to variation. Capitalization characteristics,
while still
appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3
(P-3) have an acceptable capacity for repayment of short-term
promissory obligations.
The effect of industry characteristics and market composition may
be more pronounced. Variability in earnings and profitability
may result in changes in the level of debt protection
measurements and the requirements for relatively high financial
leverage. Adequate alternate liquidity is maintained.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF INVESTMENTS OCTOBER 31, 1994
COMMON STOCKS--68.1% SHARES VALUE
--------------- -----------
<S> <C> <C>
BASIC INDUSTRIES--18.9% ASARCO 25,000 $ 784,375
Agnico Eagle Mines............... 100,000 1,287,500
Alcan Aluminium.................. 120,000 3,210,000
Aluminum Co. of America.......... 20,000 1,705,000
Boise Cascade.................... 50,000 1,325,000
Cyprus Amax Minerals............. 60,000 1,597,500
Dow Chemical..................... 40,000 2,940,000
Eastman Chemical................. 65,000 3,510,000
Echo Bay Mines................... 100,000 1,225,000
FMC.............................. 75,000 (a) 4,575,000
Freeport McMoRan Copper & Gold, Cl. A. 50,000 1,137,500
Georgia Gulf..................... 75,000 (a) 2,906,250
Georgia-Pacific.................. 90,000 6,648,750
Huntco, Cl. A.................... 110,000 2,475,000
Imperial Chemical A.D.R.......... 75,000 3,900,000
Inco............................. 100,000 3,012,500
National Gypsum.................. 20,000 (a) 670,000
OM Group......................... 100,000 2,000,000
Placer Dome...................... 100,000 2,162,500
Reliance Steel & Aluminum........ 50,000 731,250
Rohm & Haas...................... 35,000 2,113,125
Union Carbide.................... 95,000 3,146,875
-----------
53,063,125
-----------
CAPITAL GOODS--7.4% Bethlehem Steel 75,000 (a) 1,425,000
Danaher.......................... 35,000 1,719,375
Deere & Co....................... 55,000 3,946,250
Duriron.......................... 55,000 990,000
Foster Wheeler................... 85,000 3,060,000
Parker-Hannifin.................. 75,000 3,506,250
Rohr Industries.................. 150,000 (a) 1,368,750
TRINOVA.......................... 95,000 3,325,000
United Engineers................. 245,000 1,322,511
-----------
20,663,136
-----------
CONGLOMERATES--.7% Hutchinson Whampoa 400,000 1,847,970
Parkway Holdings................. 50,000 123,978
-----------
1,971,948
-----------
CONSUMER CYCLICAL--1.1% Hospitality Franchise System 40,000 (a) 1,090,000
Nordstrom........................ 25,000 1,231,250
Spiegel, Cl. A................... 50,000 743,750
-----------
3,065,000
-----------
CONSUMER GROWTH STAPLES--.3% Immunex 65,000 (a) 877,500
-----------
CONSUMER SERVICES--5.3% Acuson 50,000 (a) 918,750
Caremark International........... 75,000 1,631,250
Columbia/HCA Healthcare.......... 75,000 3,121,875
Coram Healthcare................. 40,000 (a) 660,000
Mattel........................... 135,000 3,948,750
DREYFUS STRATEGIC INVESTING
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- -----------
CONSUMER SERVICES (CONTINUED) Resorts World Berhad 275,000 $ 1,742,617
Sun Healthcare Group............. 125,000 (a) 2,875,000
-----------
14,898,242
-----------
CONSUMER STAPLES--11.7% Archer-Daniels-Midland 115,000 3,291,875
Avon Products.................... 50,000 3,162,500
Biogen........................... 35,000 (a) 1,715,000
Bristol-Myers Squibb............. 75,000 4,378,125
Canandaigua Wine, Cl. A.......... 55,000 (a) 1,808,125
Coca-Cola........................ 50,000 2,512,500
ConAgra.......................... 90,000 2,801,250
Genting Berhad................... 170,500 1,567,279
Glaxo Holdings PLC A.D.R......... 75,000 1,443,750
Pfizer........................... 50,000 3,706,250
Philip Morris Cos................ 50,000 3,062,500
St. Jude Medical................. 44,400 1,653,900
Upjohn........................... 50,000 1,650,000
-----------
32,753,054
-----------
EMERGING GROWTH--.4% Aramed Callable 76,000 (a) 864,500
Genelabs Technologies............ 111,111 (a,d) 212,500
Genesia (Warrants) 30,000 (a) 18,750
-----------
1,095,750
-----------
ENERGY--3.3% Amoco 45,000 2,851,875
Apache........................... 20,000 562,500
Lyondell Petrochem............... 125,000 3,421,875
NL Industries.................... 25,000 (a) 318,750
Occidental Petroleum............. 50,000 1,093,750
Seagull Energy................... 35,000 (a) 910,000
-----------
9,158,750
-----------
FINANCE--6.6% Chase Manhattan 60,000 2,160,000
Equitable of Iowa................ 75,000 2,653,125
First Chicago.................... 60,000 2,940,000
FirstFed Michigan................ 65,000 1,348,750
First Security................... 75,000 1,968,750
Household International.......... 50,000 1,756,250
Malayan Banking Berhad........... 525,000 3,573,245
Overseas Union Bank.............. 360,000 2,059,945
-----------
18,460,065
-----------
OIL-CRUDE PRODUCERS--.4% Amerada Hess 25,000 1,243,750
-----------
OIL WELL EQUIPMENT & SERVICES--.6% Dresser Industries 75,000 1,584,375
-----------
TECHNOLOGY--10.2% Adobe Systems 25,000 900,000
American Superconductor.......... 20,000 675,000
BMC Software..................... 65,000 (a) 2,941,250
Boeing........................... 50,000 2,193,750
Business Objects S.A. A.D.R...... 65,000 2,136,875
Compaq Computer.................. 100,000 (a) 4,012,500
DREYFUS STRATEGIC INVESTING
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- ------------
TECHNOLOGY (CONTINUED) Data General 50,000 (a) $ 487,500
Exar............................. 50,000 (a) 1,050,000
International Business Machines.. 70,000 5,215,000
Northern Telecom................. 50,000 1,806,250
Oracle Systems................... 40,000 (a) 1,840,000
PLATINUM Technology.............. 70,000 (a) 1,548,750
Tandem Computers................. 50,000 (a) 881,250
3Com............................. 75,000 (a) 3,018,750
-----------
28,706,875
-----------
TRANSPORTATION--1.2% Landstar System 100,000 3,325,000
-----------
TOTAL COMMON STOC3S
(cost $179,068,216)............ $190,866,570
============
PRINCIPAL
SHORT-TERM INVESTMENTS--29.0% AMOUNT
--------------
U.S. TREASURY BILLS: 4.81%, 11/10/1994 $ 21,932,000 (c) $ 21,904,828
3.20%, 11/17/1994................ 27,150,000 27,093,205
4.595%, 11/25/1994............... 6,351,000 (b) 6,332,079
4%, 12/1/1994.................... 10,064,000 (c) 10,026,649
4.65%, 12/8/1994................. 12,980,000 (c) 12,918,619
4.545%, 12/22/1994............... 2,920,000 2,900,008
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $81,175,388)............. $ 81,175,388
==============
TOTAL INVESTMENTS (cost $260,243,604)....................................... 97.1% $272,041,958
====== ==============
CASH AND RECEIVABLES (NET).................................................. 2.9% $ 8,229,105
====== ==============
NET ASSETS.................................................................. 100.0% $280,271,063
====== ==============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Partially held by custodian in a segregated account as
collateral for open futures positions.
(c) Partially held by brokers as collateral for open short
positions.
(d) Security restricted as to public resale;
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION<F1>
- ------ ------------ ---------- --------------- --------------------
<S> <C> <C> <C> <C>
Genelabs Technologies.................... 3/1/91 $9.00 .08% $1.9125 per share
</TABLE>
[FN] The valuation of this security has been determined in good
faith under the direction of the Board of Trustees.
See notes to financial statements.
<TABLE>
DREYFUS STRATEGIC INVESTING
STATEMENT OF FINANCIAL FUTURES
OCTOBER 31, 1994
<CAPTION>
MARKET VALUE UNREALIZED
NUMBER OF COVERED (DEPRECIATION)
FINANCIAL FUTURES SOLD SHORT; CONTRACTS BY CONTRACTS EXPIRATION AT 10/31/94
------------ -------------- ------------- --------------
<S> <C> <C> <C> <C>
Standard & Poor's 500........................ 90 ($21,260,250) December '94 ($711,625)
==============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF SECURITIES SOLD SHORT OCTOBER 31, 1994
COMMON STOCKS SHARES VALUE
- ----------------- ------- -------------
<S> <C> <C>
America Online.............................................................. 20,000 $ 1,415,000
AnnTaylor Stores............................................................ 22,500 933,750
Aura Systems................................................................ 25,000 117,187
Bankers Trust NY............................................................ 35,000 2,336,250
Bell Sports................................................................. 15,000 311,250
Best Buy.................................................................... 25,000 943,750
cisco Systems............................................................... 25,000 753,125
Compression Labs............................................................ 50,000 425,000
Compuware................................................................... 40,000 1,565,000
CrossComm................................................................... 65,000 682,500
Gap......................................................................... 50,000 1,687,500
General Mills............................................................... 15,000 840,000
Health Images............................................................... 40,064 245,392
Hillenbrand Industries...................................................... 45,000 1,361,250
Intel....................................................................... 45,000 2,795,625
International Game Technology............................................... 40,000 740,000
Magna International, Cl. A.................................................. 35,000 1,242,500
McDonald's.................................................................. 50,000 1,437,500
Medco Research.............................................................. 40,000 480,000
Newbridge Networks.......................................................... 65,000 1,795,625
Novell...................................................................... 35,000 647,500
Oxford Health Plans......................................................... 5,000 410,000
PictureTel.................................................................. 50,000 987,500
Policy Management Systems................................................... 35,000 1,645,000
President Riverboat Casinos................................................. 55,000 450,313
Schwab(Chas)................................................................ 50,000 1,775,000
Seitel...................................................................... 16,000 448,000
Southwest Airlines.......................................................... 25,000 590,625
Starbucks................................................................... 5,000 135,625
Storage Technology.......................................................... 46,100 1,279,275
Texas Instruments........................................................... 15,000 1,123,125
TransTexas Gas.............................................................. 70,000 927,500
UAL......................................................................... 25,000 2,362,500
Wall Data................................................................... 45,000 1,631,250
------------
TOTAL SECURITIES SOLD SHORT (proceeds $35,919,205).......................... $36,521,417
============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $260,243,604)_see statement..................................... $272,041,958
Cash.................................................................... 448,993
Receivable from brokers for proceeds on securities sold short........... 35,919,205
Receivable for investment securities sold............................... 17,698,936
Receivable for futures variation margin_Note 4(a)....................... 168,750
Receivable for shares of Beneficial Interest subscribed................. 148,246
Dividends and interest receivable....................................... 434,326
Prepaid expenses........................................................ 46,272
--------------
326,906,686
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 181,948
Securities sold short, at value
(proceeds $35,919,205)_see statement.................................. 36,521,417
Payable for investment securities purchased............................. 9,418,987
Payable for shares of Beneficial Interest redeemed...................... 189,359
Loan commitment fees and interest payable............................... 6,458
Accrued expenses and other liabilities.................................. 317,454 46,635,623
------------- --------------
NET ASSETS ................................................................ $280,271,063
==============
REPRESENTED BY:
Paid-in capital......................................................... $262,137,778
Accumulated investment (loss) and distributions in excess of
investment income_net_Note 1(c)....................................... (1,374,615)
Accumulated undistributed net realized gain on investments.............. 9,023,383
Accumulated net unrealized appreciation on investments [including
($711,625) net unrealized (depreciation) on financial futures]_Note 4(b) 10,484,517
--------------
NET ASSETS at value......................................................... $280,271,063
==============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value authorized)...................... 12,070,726
==============
Class B Shares
(unlimited number of $.001 par value authorized)...................... 2,087,518
==============
NET ASSET VALUE per share:
Class A Shares ($239,406,967 / 12,070,726 shares)....................... $19.83
=======
Class B Shares ($40,864,096 / 2,087,518 shares)......................... $19.58
=======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1994
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Cash dividends (net of $166,124 foreign taxes withheld at source)..... $2,697,538
Interest.............................................................. 2,022,200
------------
TOTAL INCOME...................................................... $ 4,719,738
EXPENSES:
Management fee_Note 3(a).............................................. 2,259,762
Shareholder servicing costs_Note 3(c)................................. 1,142,247
Interest_Note 2....................................................... 487,446
Distribution fees (Class B shares)_Note 3(b).......................... 280,046
Dividends on securities sold short.................................... 175,857
Custodian fees........................................................ 155,110
Prospectus and shareholders' reports.................................. 82,785
Registration fees..................................................... 80,138
Loan commitment fees_Note 2........................................... 76,042
Professional fees..................................................... 58,980
Trustees' fees and expenses_Note 3(d)................................. 27,708
Miscellaneous......................................................... 8,967
------------
TOTAL EXPENSES.................................................... 4,835,088
--------------
INVESTMENT (LOSS)--NET............................................ (115,350)
--------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments_Note 4(a):
Long transactions (including options transactions).................... $7,851,818
Short sale transactions............................................... 1,439,127
Net realized (loss) on financial futures_Note 4(a)...................... (324,547)
------------
NET REALIZED GAIN..................................................... 8,966,398
Net unrealized (depreciation) on investments and securities sold short
[including ($711,625) net unrealized (depreciation) on financial futures] (30,980,097)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (22,013,699)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (22,129,049)
==============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED OCTOBER 31,
--------------------------------
1993 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income (loss)_net............................................ $ 344,576 $ (115,350)
Net realized gain on investments........................................ 31,818,915 8,966,398
Net unrealized appreciation (depreciation) on investments for the year.. 15,782,474 (30,980,097)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... 47,945,965 (22,129,049)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income_net:
Class A shares........................................................ (549,763) ___
Class B shares........................................................ ___ ___
In excess of investment income_net:
Class A shares........................................................ ___ (1,425,741)
Class B shares........................................................ ___ (116,253)
From net realized gain on investments:
Class A shares........................................................ ___ (26,597,901)
Class B shares........................................................ ___ (2,951,918)
-------------- --------------
TOTAL DIVIDENDS................................................... (549,763) (31,091,813)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 52,366,131 49,925,537
Class B shares........................................................ 25,107,551 21,282,593
Dividends reinvested:
Class A shares........................................................ 494,336 25,815,338
Class B shares........................................................ ___ 2,988,881
Cost of shares redeemed:
Class A shares........................................................ (66,014,198) (65,443,064)
Class B shares........................................................ (642,448) (2,932,744)
-------------- --------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 11,311,372 31,636,541
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 58,707,574 (21,584,321)
NET ASSETS:
Beginning of year....................................................... 243,147,810 301,855,384
-------------- --------------
End of year [including investment (loss) and
distributions in excess of investment income_net of: ($140,172)
in 1993 and ($1,374,615) in 1994]..................................... $301,855,384 $280,271,063
============== ==============
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------------------------------------------------------------------
CLASS A CLASS B
-------------------------------- --------------------------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
-------------------------------- --------------------------------
1993 1994 1993<F1> 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 2,402,790 2,345,076 1,122,136 993,936
Shares issued for dividends reinvested. 24,079 1,240,296 ___ 144,600
Shares redeemed........................ (3,034,139) (3,127,724) (28,591) (144,563)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING.................... (607,270) 457,648 1,093,545 993,973
============== ============== ============= =============
</TABLE>
- ------------------
[FN] From January 15, 1993 (commencement of initial offering) to
October 31, 1993.
See notes to financial statements.
DREYFUS STRATEGIC INVESTING
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated
March 1, 1995.
DREYFUS STRATEGIC INVESTING
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of
1940 ("Act") as a non-diversified open-end management investment
company. Dreyfus Service Corporation, until August 24, 1994,
acted as the distributor of the Fund's shares. Dreyfus Service
Corporation is a wholly-owned subsidiary of The Dreyfus
Corporation ("Manager"). Effective August 24, 1994, the Manager
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 Trustees. 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 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. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it
is the policy of the Fund not to distribute such gain.
Dividends in excess of investment income--net for financial
statement purposes result primarily from transactions where tax
treatment differs from book treatment. During the year ended
October 31, 1994, the Fund reclassed $422,901 from undistributed
investment income-net to paid-in capital. This amount represents
amortization of organization expenses, certain passive foreign
investment company transactions and certain foreign currency
transactions where book treatment differs from tax treatment.
(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 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.
DREYFUS STRATEGIC INVESTING
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--BANK LINE OF CREDIT:
In accordance with an agreement with a bank, the Fund may
borrow up to $60 million under a short-term unsecured line of
credit. In connection therewith, the Fund has agreed to pay
commitment fees at an annual rate of .125 of 1% on the total line
of credit. Interest on borrowings is charged at rates which are
related to the Federal Funds rate in effect from time to time.
At October 31, 1994 there were no outstanding borrowings
under the line of credit.
The average daily amount of short-term debt outstanding
during the year ended October 31, 1994 was approximately $11.1
million, with a related weighted average annualized interest rate
of 4.39% (based upon actual interest expense, not including
commitment fees, for the year). The maximum amount of such debt
outstanding at any time during the year ended October 31,
1994, was $40.5 million.
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .75
of 1% of the average daily value of the Fund's net assets and is
payable monthly. The Agreement provides for an expense
reimbursement from the Manager should the Fund's aggregate
expenses, exclusive of taxes, interest on borrowings (which, in
the view of Stroock & Stroock & Lavan, counsel to the Fund, also
contemplates loan commitment fees and dividends on securities
sold short), brokerage and extraordinary expenses, exceed the
expense limitation of any state having jurisdiction over the
Fund. The most stringent state expense limitation applicable to
the Fund presently requires reimbursement of expenses 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. There was no expense reimbursement for the year
ended October 31, 1994.
Dreyfus Service Corporation retained $297,139 during the year
ended October 31, 1994 from commissions earned on sales of the
Fund's Class A shares.
Prior to August 24, 1994, Dreyfus Service Corporation
retained $58,543 from contingent deferred sales charges imposed
upon redemptions of the Fund's Class B shares.
(B) On August 3, 1994, Fund's shareholders approved a revised
Distribution Plan with respect to Class B shares only (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 shares.
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 October 31, 1994, $58,353 was charged
to the Fund pursuant to the Class B Distribution Plan and
$221,693 was charged to the Fund pursuant to the prior Class B
Distribution Plan.
DREYFUS STRATEGIC INVESTING
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 amounts to be paid to Service Agents.
From November 1, 1993 through August 23, 1994, $541,895 and
$73,898 were charged to Class A and Class B shares, respectively,
by Dreyfus Service Corporation. From August 24, 1994 through
October 31, 1994, $118,010 and $19,451 were charged to Class A
and Class B shares, respectively, by the Distributor pursuant to
the Shareholder Services Plan.
(D) Prior to August 24, 1994 certain officers and trustees of
the Fund were "affiliated persons," as defined in the Act, of the
Manager and/or Dreyfus Service Corporation. Each trustee who is
not an "affiliated person" receives an annual fee of $2,500 and
an attendance fee of $250 per meeting.
NOTE 4--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of
purchases and sales of investment securities and securities sold
short, excluding short-term securities and options transactions,
during the year ended October 31, 1994:
<TABLE>
<CAPTION>
PURCHASES SALES
--------------- ----------------
<S> <C> <C>
Long transactions.............................................. $520,301,502 $612,796,892
Short sale transactions........................................ 61,909,425 83,522,824
--------------- ----------------
TOTAL...................................................... $582,210,927 $696,319,716
============== ================
</TABLE>
The Fund is engaged in short-selling which obligates the Fund
to replace the security borrowed by purchasing the security at
current market value. The Fund would incur a loss if the price of
the security increases between the date of the short sale and the
date on which the Fund replaces the borrowed security. The Fund
would realize a gain if the price of the security declines
between those dates. Until the Fund replaces the borrowed
security, the Fund will maintain daily, a segregated account
with a broker and custodian, of cash and/or U.S. Government
securities sufficient to cover its short position. Securities
sold short at October 31, 1994 and their related market values
and proceeds are set forth in the Statement of Securities Sold
Short.
In addition, the following table summarizes the Fund's put
option transactions for the year ended October 31, 1994:
<TABLE>
<CAPTION>
OPTIONS TERMINATED
----------------------------
NET
NUMBER OF PREMIUMS REALIZED
CONTRACTS RECEIVED COST GAIN
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding October 31, 1993...... -- $ --
Contracts written........................... 200,000 193,993
----------- -------------
200,000 193,993
----------- -------------
Contracts Terminated;
Closed.................................... 200,000 193,993 $114,000 $79,993
----------- ------------- =========== ===========
Contracts outstanding October 31, 1994...... _ $ _
=========== =============
</TABLE>
DREYFUS STRATEGIC INVESTING
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As a writer of put options, the Fund receives a premium at
the outset and then bears the market risk of unfavorable changes
in the price of the financial instrument underlying the option.
Generally, the Fund would incur a gain, to the extent of the
premiums received, if the price of the underlying financial
instrument increases between the date the option is written and
the date on which the option is terminated. Generally, the Fund
would realize a loss if the price of the financial instrument
declines 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. Investments in
financial futures require the Fund to "mark to market" on a daily
basis, which reflects the change in the 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 October 31, 1994 and
their related market values and unrealized (depreciation) are set
forth in the Statement of Financial Futures.
(B) At October 31, 1994, accumulated net unrealized
appreciation on investments was $10,484,517, consisting of
$20,222,306 gross unrealized appreciation and $9,737,789 gross
unrealized depreciation.
At October 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 STRATEGIC INVESTING
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS STRATEGIC INVESTING
We have audited the accompanying statement of assets and
liabilities of Dreyfus Strategic Investing, including the
statements of investments, financial futures and securities sold
short, as of October 31, 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 October 31, 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 Strategic Investing
at October 31, 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 & Young LLP Signature Logo)
New York, New York
December 14, 1994
<PAGE>
DREYFUS STRATEGIC INVESTING
PART C. OTHER INFORMATION
_________________________
Item 24 Financial Statements and Exhibits. - List
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information- for the period from October 1,
1986 (commencement of operations) to October 31, 1986
and for each of the eight years in the period ended October
31, 1994.
Included in Part B of the Registration Statement:
Statement of Investments--October 31, 1994.
Statement of Financial Futures--October 31, 1994.
Statement of Securities Sold Short--October 31, 1994.
Statement of Assets and Liabilities--October 31, 1994.
Statement of Operations--Year ended October 31, 1994.
Statement of Changes in Net Assets--for each of the two years
ended October 31, 1994.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors, dated
December 14, 1994.
Schedule Nos. I through VII and other Financial Statement
information, for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission,
are either omitted because they are not required under the
related instructions, they are inapplicable, or the required
information is presented in the financial statements or
notes thereto which are included in Part B of the Registration
Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
(b) Exhibits:
(1) Registrant's Restated and Amended Agreement Declaration
of Trust, as amended, is incorporated by reference to Exhibit (1)
of Post-Effective Amendment No. 11 to the Registration Statement
on Form N-1A, filed on October 30, 1992.
(2) Registrant's By-Laws are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 1 to the Registration
Statement on Form N-1A, filed on February 26, 1987.
(4) The specimen copy of a share certificate is
incorporated by reference to Exhibit (4) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A, filed
on October 14, 1986.
(5) Management Agreement.
(6) Distribution Agreement.
(8) The Custody Agreement between the Fund and the Bank of
New York dated February 8, 1990 is incorporated by reference to
Exhibit 8 of Post-Effective Amendment No. 8 to the Registration
Statement on Form N-1A, filed on March 1, 1991.
(9) Shareholder Services Plan, as revised.
(10) Opinion and consent of Registrant's counsel is
incorporated by reference to Exhibit (10) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A, filed
on October 14, 1986.
(11) Consent of Independent Auditors.
(14) Documents making up model plans in the establishment of
retirement plans in conjunction with which Registrant offers its
securities are incorporated by reference to Exhibit (14) of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on October 14, 1986.
(15) Distribution Plan relating to Class B shares.
(16) Schedules of Computation of Performance Data is
incorporated by reference to Exhibit (16) of Post-Effective
Amendment No. 13 to the Registration Statement on Form N1-A,
filed on January 20, 1994.
Other Exhibits
(a) Powers of Attorney are incorporated by
reference to "Other Exhibits (a)" of Post-Effective Amendments
Nos. 4, 8, 11 and 13. Additional Powers of Attorney are
enclosed herein.
(b) Certificate of Secretary is incorporated by
reference to "Other Exhibits (b)" of Post-Effective Amendment
Nos. 4 and 13. An additional Certificate of Secretary is
enclosed herein.
Item 25. Persons Controlled by or under Common Control with
Registrant.
Not Applicable
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record
Title of Class Holders as of December 23, 1994
Shares of Beneficial Interest
Par value $.001 Class A=15,868
Class B= 3,623
Item 27. Indemnification
The Statement as to the general effect of any contract,
arrangements or statute under which a director, officer,
underwriter or affiliated person of the Registrant is
indemnified, is incorporated by reference to Item 4 of Part II of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on October 14, 1986.
Item 28. Business and Other Connections of Investment Adviser.
The Dreyfus Corporation ("Dreyfus") and subsidiary
companies comprise a financial service organization whose
business consists primarily of providing investment management
services as the investment adviser, manager and distributor for
sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to institutional
and individual accounts. Dreyfus also serves as sub-investment
adviser to and/or administrator of other investment companies.
Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as broker-dealer of shares of
investment companies sponsored by Dreyfus and of other
investment companies for which Dreyfus acts as investment
adviser, sub-investment adviser or administrator. Dreyfus
Management, Inc., another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser
(continued)
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the Board and Dreyfus Acquisition Corporation*;
Chief Executive Officer The Dreyfus Consumer Credit
Corporation*;
Dreyfus Land Development Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++
The Dreyfus Fund International
Limited+++++
World Balanced Fund+++
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
The Dreyfus Trust Company++;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York;
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, and The Dreyfus Trust Company++;
Director Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
JOSEPH S. DiMARTINO Director:
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
Trustee:
Bucknell University
Lewisburg, Pennsylvania 17837;
Vice President and former Treasurer and
Director:
National Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
W. KEITH SMITH Chairman and Chief Executive Officer:
Chief Operating Officer The Boston Company
One Boston Place
Boston, Massachusetts 02108
Vice Chairman of the Board:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
PAUL H. SNYDER Director:
Vice President and Chief Pennsylvania Economy League
Financial Officer Philadelphia, Pennsylvania;
Children's Crisis Treatment Center
Philadelphia, Pennsylvania;
Director and Vice President:
Financial Executives Institute,
Philadelphia Chapter
Philadelphia, Pennsylvania;
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman, Distribution Executive Officer:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.
LAWRENCE S. KASH Executive Vice President
(cont'd) Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
JAY R. DEMARTINE Chairman of the Board and President:
Vice President, Marketing The Woodbury Society
16 Woodbury Lane
Ogunquit, ME 03907;
Former Managing Director:
Bankers Trust Company
280 Park Avenue
New York, NY 10017;
BARBARA E. CASEY President:
Vice President, Dreyfus Retirement Services;
Retirement Services Executive Vice President:
Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108;
DIANE M. COFFEY None
Vice President,
Corporate Communications
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Security Savings
Director Bank, F.S.B.+;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading
Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ELIE M. GENADRY President:
Vice President, Institutional Services Division of
Dreyfus
Wholesale Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Vice President:
The Dreyfus Trust Company++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Seven Six Seven Agency, Inc.*;
JEFFREY N. NACHMAN None
Vice President, Fund
Administration
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice Chairman, Operations Dreyfus Thrift & Commerce****;
and Administration Director:
The Dreyfus Security Savings Bank F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
President and Director:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Vice President, Department of Parks and Recreation of the
Human Resources City of New York
830 Fifth Avenue
New York, New York 10022
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Secretary:
Vice President, Fund The Dreyfus Consumer Credit Corporation*;
Legal and Compliance Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus Management,
Inc.*;
Dreyfus Service Corporation*;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park
Avenue, New York, New York 10166.
** The address of the business so indicated is 80 Cutter
Mill Road, Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway,
New York, New York 10006.
**** The address of the business so indicated is Five Triad
Center, Salt Lake City, Utah 84180.
+ The address of the business so indicated is Atrium
Building, 80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One
Rockefeller Plaza, New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard
Royal, Luxembourg.
+++++ The address of the business so indicated is Nassau,
Bahama Islands.
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ __________________________________
Howard Stein* Chairman of the Board Trustee and
Investment Officer
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director None
Lawrence M. Greene* Executive Vice President and Director None
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President None
Hank Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President None
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President None
and Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Secretary
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with
Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation
Registrant
__________________ ____________________ ______
Elie M. Genadry* President None
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
Edward Donley
Latham, NY Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Mary Rogers** Assistant Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _____________________ _____________
Elie M. Genadry* President None
Donald A. Nanfeldt* Executive Vice President None
Charles Cardona** Senior Vice President None
Stacy Alexander* Vice President None
Eric Almquist* Vice President None
James E. Baskin+++++++ Vice President None
Kenneth Bernstein
Boca Raton, FL Vice President-Institutional Sales None
Stephen Burke* Vice President None
Laurel A. Diedrick
Burrows*** Vice President None
Daniel L. Clawson++++ Vice President None
Michael Caraboolad
Gates Mills, OH Vice President-Institutional Sales None
Laura Caudillo++ Vice President-Institutional Sales None
Steven Faticone***** Vice-President-Institutional Sales None
William E. Findley**** Vice President None
Mary Genet***** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Institutional Sales None
Nancy Knee++++ Vice President-Institutional Sales None
Bradford Lange* Vice President-Institutional Sales None
Kathleen McIntyre
Lewis++ Vice President None
Eva Machek***** Vice President-Institutional Sales None
Mary McCabe*** Vice President-Institutional Sales None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President None
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President None
Lorianne Pinto* Vice President-Institutional Sales None
Douglas Rentschler
Grosse Point Park, MI Vice President-Institutional Sales None
Leah Ryan**** Vice President-Institutional Sales None
Emil Samman* Vice President-Institutional
Marketing None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President None
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Carolyn Warren++ Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ __________________ ____________
Elie M. Genadry* President None
Robert W. Stone* Executive Vice President None
Paul Allen* Executive Vice President-
National Sales None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
Wendy Holcomb++ Vice President-Sales None
William Gallagher* Vice President-Sales None
Brent Glading* Vice President-Sales None
Gerald Goz* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
___________________________________________________
* The address of the offices so indicated is 200 Park
Avenue, New York, New York 10166
** The address of the offices so indicated is 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580
California Street, San Francisco, California 94104.
**** The address of the offices so indicated is 3384
Peachtree Road, Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South
LaSalle Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box
1657, Duxbury, Massachusetts 02331.
++ The address of the offices so indicated is 800 West
Sixth Street, Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick
Lane, Edgewood, Rhode Island 02905.
++++The address of the offices so indicated is 1700 Lincoln
Street, Suite 3940, Denver, Colorado 80203.
+++++The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117
Diamond Street, San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box
757, Holliston, Massachusetts 01746.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's
principal
underwriter (exclusive distributor) acts as principal underwriter
or exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus Leverage Fund, Inc.
37) Dreyfus Life and Annuity Index Fund, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus Michigan Municipal Money Market Fund, Inc.
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus Ohio Municipal Money Market Fund, Inc.
57) Dreyfus 100% U.S. Treasury Intermediate Term Fund
58) Dreyfus 100% U.S. Treasury Long Term Fund
59) Dreyfus 100% U.S. Treasury Money Market Fund
60) Dreyfus 100% U.S. Treasury Short Term Fund
61) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
62) Dreyfus Pennsylvania Municipal Money Market Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) Dreyfus Short-Term Income Fund, Inc.
66) The Dreyfus Socially Responsible Growth Fund, Inc.
67) Dreyfus Strategic Growth, L.P.
68) Dreyfus Strategic Income
69) Dreyfus Strategic Investing
70) Dreyfus Tax Exempt Cash Management
71) Dreyfus Treasury Cash Management
72) Dreyfus Treasury Prime Cash Management
73) Dreyfus Variable Investment Fund
74) Dreyfus-Wilshire Target Funds, Inc.
75) Dreyfus Worldwide Dollar Money Market Fund, Inc.
76) First Prairie Cash Management
77) First Prairie Diversified Asset Fund
78) First Prairie Money Market Fund
79) First Prairie Municipal Money Market Fund
80) First Prairie Tax Exempt Bond Fund, Inc.
81) First Prairie U.S. Government Income Fund
82) First Prairie U.S. Treasury Securities Cash Management
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market Fund
91) Pacific American Fund
92) Peoples Index Fund, Inc.
93) Peoples S&P MidCap Index Fund, Inc.
94) Premier Insured Municipal Bond Fund
95) Premier California Municipal Bond Fund
96) Premier GNMA Fund
97) Premier Growth Fund, Inc.
98) Premier Municipal Bond Fund
99) Premier New York Municipal Bond Fund
100) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ _______________ _____________
Marie E. Connolly Director, President and Chief President and
Operating Officer Treasurer
Joseph F. Tower, III Senior Vice President and Chief Assistant
Financial Officer Treasurer
John E. PelletierSenior Vice President and General Vice
Counsel President
and Secretary
Frederick C. Dey Senior Vice President Vice President
and Assistant
Treasurer
Eric B. Fischman Vice President and Associate Vice President
General Counsel and Assistant
Secretary
John J. Pyburn Vice President Assistant
Treasurer
Jean M. O'Leary Assistant Secretary None
Ruth D. Leibert Assistant Vice President Assistant Secretary
Paul D. Furcinito Assistant Vice President Assistant Secretary
John W. Gomez Director None
William J. Nutt Director None
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of
voting upon the question of removal of a trustee or trustees when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares of beneficial interest and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
(2) To furnish each person to whom a prospectus is
delivered with a copy of its latest annual report to
shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant has duly
caused this Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, and State of New York on the 29th day of
December, 1994.
DREYFUS STRATEGIC INVESTING
BY: /s/ Marie E. Connolly*
----------------------------
Marie E. Connolly, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, this Amendment to the
Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/Marie E. Connolly* President and Treasurer (Principal 12/29/94
- -------------------------- Executive and Financial Officer)
Marie E. Connolly
/s/David W. Burke* Trustee 12/29/94
- --------------------------
David W. Burke
/s/Diane Dunst* Trustee 12/29/94
- --------------------------
Diane Dunst
/s/Rosalind Gersten Jacobs* Trustee 12/29/94
- --------------------------
Rosalind Gersten Jacobs
/s/David P. Feldman* Trustee 12/29/94
- --------------------------
David P. Feldman
/s/Jay I. Meltzer* Trustee 12/29/94
- --------------------------
Jay I. Meltzer
/s/Daniel Rose* Trustee 12/29/94
- --------------------------
Daniel Rose
/s/Warren B. Rudman* Trustee 12/29/94
- --------------------------
Warren B. Rudman
/s/Sander Vanocur* Trustee 12/29/94
- --------------------------
Sander Vanocur
*BY: ---------------------
Eric B. Fischman,
Attorney-in-Fact
</TABLE>
EXHIBIT 5
MANAGEMENT AGREEMENT
DREYFUS STRATEGIC INVESTING
August 24, 1994
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund") herewith
confirms its agreement with you as follows:
The Fund desires to employ its capital by investing and
reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter
documents and in its Prospectus and Statement of Additional
Information as from time to time in effect, copies of which have
been or will be submitted to you, and in such manner and to such
extent as from time to time may be approved by the Fund's Board.
The Fund desires to employ you to act as its investment adviser.
In this connection it is understood that from time to time
you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or
persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons
shall be paid by you and no obligation may be incurred on the
Fund's behalf in any such respect.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of the Fund's
portfolio in accordance with the Fund's investment objectives
and policies as stated in its Prospectus and Statement of
Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment
research and will supervise the Fund's investments and conduct a
continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of the Fund's assets. You
will furnish to the Fund such statistical information, with
respect to the investments which the Fund may hold or
contemplate purchasing, as the Fund may reasonably request. The
Fund wishes to be informed of important developments materially
affecting its portfolio and shall expect you, on your own
initiative, to furnish to the Fund from time to time such
information as you may believe appropriate for this purpose.
In addition, you will supply office facilities (which may
be in your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and
stationery and office supplies; prepare reports to the Fund's
stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of the Fund's shares;
and generally assist in all aspects of the Fund's operations.
You shall have the right, at your expense, to engage other
entities to assist you in performing some or all of the
obligations set forth in this paragraph, provided each such etity
enters into an agreement with you in form and substance
reasonably satisfactory to the Fund. You agree to be liable for
the acts or omissions of each such entity to the same extent as
if you had acted or failed to act under the circumstances.
You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that you
shall not be liable hereunder for any error of judgment or
mistake of law or for any loss suffered by the Fund, provided
that nothing herein shall be deemed to protect or purport to
protect you against any liability to the Fund or to its security
holders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee at the annual rate of .75 of 1% of the value of
the Fund's average daily net assets. Net asset value shall be
computed on such days and at such time or times as described in
the Fund's then-current Prospectus and Statement of Additional
Information. Upon any termination of this Agreement before the
end of any month, the fee for such part of a month shall be pro-
rated according to the proportion which such period bears to the
full monthly period and shall be payable upon the date of
termination of this Agreement.
For the purpose of determining fees payable to you, the
value of the Fund's net assets shall be computed in the manner
specified in the Fund's charter documents for the computation of
the value of the Fund's net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by
you. The expenses to be borne by the Fund include, without
limitation, the following: organizational costs, taxes,
interest, loan commitment fees, interest and distributions paid
on securities sold short, brokerage fees and commissions, if
any, fees of Board members who are not your officers, directors
or employees or holders of 5% or more of your outstanding voting
securities, Securities and Exchange Commission fees and state
Blue Sky qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of independent pricing
services, costs of maintaining the Fund's existence, costs
attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of additional
information for regulatory purposes and for distribution to
existing stockholders, costs of stockholders' reports and
meetings, and any extraordinary expenses.
If in any fiscal year the aggregate expenses of the Fund
(including fees pursuant to this Agreement, but excluding
interest, taxes, brokerage and, with the prior written consent
of the necessary state securities commissions, extraordinary
expenses) exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the fees to
be paid hereunder, or you will bear, such excess expense to the
extent required by state law. Your obligation pursuant hereto
will be limited to the amount of your fees hereunder.
Suchdeduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a
monthly basis.
The Fund understands that you now act, and that from time
to time hereafter you may act, as investment adviser to one or
more other investment companies and fiduciary or other managed
accounts, and the Fund has no objection to your so acting,
provided that when the purchase or sale of securities of the
same issuer is suitable for the investment objectives of two or
more companies or accounts managed by you which have available
funds for investment, the available securities will be allocated
in a manner believed by you to be equitable to each company or
account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by the Fund or the
size of the position obtainable for or disposed of by the Fund.
In addition, it is understood that the persons employed by
you to assist in the performance of your duties hereunder will
not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict your right or the
right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever
kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates,
except for a loss resulting from willful misfeasance, bad faith
or gross negligence on your part in the performance of your
duties or from reckless disregard by you of your obligations and
duties under this Agreement. Any person, even though also your
officer, director, partner, employee or agent, who may be or
become an officer, Board member, employee or agent of the Fund,
shall be deemed, when rendering services to the Fund or acting
on any business of the Fund, to be rendering such services to or
acting solely for the Fund and not as your officer, director,
partner, employee or agent or one under your control or
direction even though paid by you.
This Agreement shall continue until September 11, 1994, and
thereafter shall continue automatically for successive annual
periods ending on September 11th of each year, provided such
continuance is specifically approved at least annually by
(i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940) of the Fund's outstanding
voting securities, provided that in either event its continuance
also is approved by a majority of the Fund's Board members who
are not "interested persons" (as defined in said Act) of any
party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agree-
ment is terminable without penalty, on 60 days' notice, by the
Fund's Board or by vote of holders of a majority of the Fund's
shares or, upon not less than 90 days' notice, by you. This
Agreement also will terminate automatically in the event of its
assignment (as defined in said Act).
The Fund recognizes that from time to time your directors,
officers and employees may serve as directors, trustees,
partners, officers and employees of other corporations, business
trusts, partnerships or other entities (including other
investment companies) and that such other entities may include
the name "Dreyfus" as part of their name, and that your
corporation or its affiliates may enter into investment advisory
or other agreements with such other entities. If you cease toact
as the Fund's investment adviser, the Fund agrees that, at
your request, the Fund will take all necessary action to change
the name of the Fund to a name not including "Dreyfus" in any
form or combination of words.
This Agreement has been executed on behalf of the Fund by
the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this Agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the
enclosed copy hereof.
Very truly yours,
DREYFUS STRATEGIC INVESTING
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
<PAGE>
EXHIBIT 6
DISTRIBUTION AGREEMENT
DREYFUS STRATEGIC INVESTING
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
August 24, 1994
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of
the agreements hereinafter contained, the above-named investment
company (the "Fund") has agreed that you shall be, for the
period of this agreement, the distributor of (a) shares of each
Series of the Fund set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time (each, a "Series") or
(b) if no Series are set forth on such Exhibit, shares of the
Fund. For purposes of this agreement the term "Shares" shall
mean the authorized shares of the relevant Series, if any, and
otherwise shall mean the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the
distribution of Shares covered by, and in accordance with, the
registration statement and prospectus then in effect under the
Securities Act of 1933, as amended, and will transmit promptly
any orders received by you for purchase or redemption of Shares
to the Transfer and Dividend Disbursing Agent for the Fund of
which the Fund has notified you in writing.
1.2 You agree to use your best efforts to
solicit orders for the sale of Shares. It is contemplated that
you will enter into sales or servicing agreements with
securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and
estate planning firms, and in so doing you will act only on your
own behalf as principal.
1.3 You shall act as distributor of Shares
in compliance with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940, as
amended, by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange
Act of 1934, as amended.
1.4 Whenever in their judgment such action
is warranted by market, economic or political conditions, or by
abnormal circumstances of any kind, the Fund's officers may
decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such
orders and to make such sales and the Fund shall advise you
promptly of such determination.
1.5 The Fund agrees to pay all costs and
expenses in connection with the registration of Shares under the
Securities Act of 1933, as amended, and all expenses in
connection with maintaining facilities for the issue and
transfer of Shares and for supplying information, prices and
other data to be furnished by the Fund hereunder, and all
expenses in connection with the preparation and printing of the
Fund's prospectuses and statements of additional information for
regulatory purposes and for distribution to shareholders;
provided however, that nothing contained herein shall be deemed
to require the Fund to pay any of the costs of advertising the
sale of Shares.
1.6 The Fund agrees to execute any and all
documents and to furnish any and all information and otherwise
to take all actions which may be reasonably necessary in the
discretion of the Fund's officers in connection with the
qualification of Shares for sale in such states as you may
designate to the Fund and the Fund may approve, and the Fund
agrees to pay all expenses which may be incurred in connection
with such qualification. You shall pay all expenses connected
with your own qualification as a dealer under state or Federal
laws and, except as otherwise specifically provided in this
agreement, all other expenses incurred by you in connection with
the sale of Shares as contemplated in this agreement.
1.7 The Fund shall furnish you from time to
time, for use in connection with the sale of Shares, such
information with respect to the Fund or any relevant Series and
the Shares as you may reasonably request, all of which shall be
signed by one or more of the Fund's duly authorized officers;
and the Fund warrants that the statements contained in any such
information, when so signed by the Fund's officers, shall be
true and correct. The Fund also shall furnish you upon request
with: (a) semi-annual reports and annual audited reports of the
Fund's books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings
statements prepared by the Fund, (c) a monthly itemized list of
the securities in the Fund's or, if applicable, each Series'
portfolio, (d) monthly balance sheets as soon as practicable
after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition
as you may reasonably request.
1.8 The Fund represents to you that all
registration statements and prospectuses filed by the Fund with
the Securities and Exchange Commission under the Securities Act
of 1933, as amended, and under the Investment Company Act of
1940, as amended, with respect to the Shares have been carefully
prepared in conformity with the requirements of said Acts and
rules and regulations of the Securities and Exchange Commission
thereunder. As used in this agreement the terms "registration
statement" and "prospectus" shall mean any registration state-
ment and prospectus, including the statement of additional
information incorporated by reference therein, filed with the
Securities and Exchange Commission and any amendments and
supplements thereto which at any time shall have been filed with
said Commission. The Fund represents and warrants to you that
any registration statement and prospectus, when such registra-
tion statement becomes effective, will contain all statements
required to be stated therein in conformity with said Acts and
the rules and regulations of said Commission; that all state-
ments of fact contained in any such registration statement and
prospectus will be true and correct when such registration
statement becomes effective; and that neither any registration
statement nor any prospectus when such registration statement
becomes effective will include an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Fund may but shall not be obligated to propose
from time to time such amendment or amendments to any registra-
tion statement and such supplement or supplements to any pro-
spectus as, in the light of future developments, may, in the
opinion of the Fund's counsel, be necessary or advisable. If
the Fund shall not propose such amendment or amendments and/or
supplement or supplements within fifteen days after receipt by
the Fund of a written request from you to do so, you may, at
your option, terminate this agreement or decline to make offers
of the Fund's securities until such amendments are made. The
Fund shall not file any amendment to any registration statement
or supplement to any prospectus without giving you reasonable
notice thereof in advance; provided, however, that nothing
contained in this agreement shall in any way limit the Fund's
right to file at any time such amendments to any registration
statement and/or supplements to any prospectus, of whatever
character, as the Fund may deem advisable, such right being in
all respects absolute and unconditional.
1.9 The Fund authorizes you to use any pro-
spectus in the form furnished to you from time to time, in con-
nection with the sale of Shares. The Fund agrees to indemnify,
defend and hold you, your several officers and directors, and
any person who controls you within the meaning of Section 15 of
the Securities Act of 1933, as amended, free and harmless from
and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in
connection therewith) which you, your officers and directors, or
any such controlling person, may incur under the Securities Act
of 1933, as amended, or under common law or otherwise, arising
out of or based upon any untrue statement, or alleged untrue
statement, of a material fact contained in any registration
statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required
to be stated in either any registration statement or any pro-
spectus or necessary to make the statements in either thereof
not misleading; provided, however, that the Fund's agreement to
indemnify you, your officers or directors, and any such control-
ling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in
any registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's
agreement to indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned
upon the Fund's being notified of any action brought against
you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed
to the Fund at its address set forth above within ten days after
the summons or other first legal process shall have been served.
The failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to
the person against whom such action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's
indemnity agreement contained in this paragraph 1.9. The Fund
will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing
chosen by the Fund and approved by you. In the event the Fund
elects to assume the defense of any such suit and retain counsel
of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not
elect to assume the defense of any such suit, or in case you do
not approve of counsel chosen by the Fund, the Fund will
reimburse you, your officers and directors, or the controlling
person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by you or
them. The Fund's indemnification agreement contained in this
paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and
shall survive the delivery of any Shares. This agreement of
indemnity will inure exclusively to your benefit, to the benefit
of your several officers and directors, and their respective
estates, and to the benefit of any controlling persons and their
successors. The Fund agrees promptly to notify you of the
commencement of any litigation or proceedings against the Fund
or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and
hold the Fund, its several officers and Board members, and any
person who controls the Fund within the meaning of Section 15 of
the Securities Act of 1933, as amended, free and harmless from
and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in
connection therewith) which the Fund, its officers or Board
members, or any such controlling person, may incur under the
Securities Act of 1933, as amended, or under common law or
otherwise, but only to the extent that such liability or expense
incurred by the Fund, its officers or Board members, or such
controlling person resulting from such claims or demands, shall
arise out of or be based upon any untrue, or alleged untrue,
statement of a material fact contained in information furnished
in writing by you to the Fund specifically for use in the Fund's
registration statement and used in the answers to any of the
items of the registration statement or in the corresponding
statements made in the prospectus, or shall arise out of or be
based upon any omission, or alleged omission, to state a
material fact in connection with such information furnished in
writing by you to the Fund and required to be stated in such
answers or necessary to make such information not misleading.
Your agreement to indemnify the Fund, its officers and Board
members, and any such controlling person, as aforesaid, is
expressly conditioned upon your being notified of any action
brought against the Fund, its officers or Board members, or any
such controlling person, such notification to be given by letter
or telegram addressed to you at your address set forth above
within ten days after the summons or other first legal process
shall have been served. You shall have the right to control the
defense of such action, with counsel of your own choosing,
satisfactory to the Fund, if such action is based solely upon
such alleged misstatement or omission on your part, and in any
other event the Fund, its officers or Board members, or such
controlling person shall each have the right to participate in
the defense or preparation of the defense of any such action.
The failure so to notify you of any such action shall not
relieve you from any liability which you may have to the Fund,
its officers or Board members, or to such controlling person by
reason of any such untrue, or alleged untrue, statement or
omission, or alleged omission, otherwise than on account of your
indemnity agreement contained in this paragraph 1.10. This
agreement of indemnity will inure exclusively to the Fund's
benefit, to the benefit of the Fund's officers and Board
members, and their respective estates, and to the benefit of any
controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any
litigation or proceedings against you or any of your officers or
directors in connection with the issue and sale of Shares.
1.11 No Shares shall be offered by either
you or the Fund under any of the provisions of this agreement
and no orders for the purchase or sale of such Shares hereunder
shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or
any necessary amendments thereto shall be suspended under any of
the provisions of the Securities Act of 1933, as amended, or if
and so long as a current prospectus as required by Section 10 of
said Act, as amended, is not on file with the Securities and
Exchange Commission; provided, however, that nothing contained
in this paragraph 1.11 shall in any way restrict or have an
application to or bearing upon the Fund's obligation to
repurchase any Shares from any shareholder in accordance with
the provisions of the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you
immediately in writing:
(a) of any request by the Securities and
Exchange Commission for amendments to the
registration statement or prospectus then in
effect or for additional information;
(b) in the event of the issuance by the
Securities and Exchange Commission of any
stop order suspending the effectiveness of
the registration statement or prospectus
then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made
in the registration statement or prospectus
then in effect or which requires the making
of a change in such registration statement
or prospectus in order to make the state-
ments therein not misleading; and
(d) of all actions of the Securities and
Exchange Commission with respect to any
amendments to any registration statement or
prospectus which may from time to time be
filed with the Securities and Exchange
Commission.
2. Offering Price
Shares of any class of the Fund offered for
sale by you shall be offered for sale at a price per share (the
"offering price") approximately equal to (a) their net asset
value (determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any and except to those
persons set forth in the then-current prospectus, which shall be
the percentage of the offering price of such Shares as set forth
in the Fund's then-current prospectus. The offering price, if
not an exact multiple of one cent, shall be adjusted to the
nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred
sales charge as set forth in the Fund's then-current prospectus.
You shall be entitled to receive any sales charge or contingent
deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you
and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date
(the "Reapproval Date") set forth on Exhibit A hereto (and, if
the Fund has Series, a separate Reapproval Date shall be
specified on Exhibit A for each Series), and thereafter shall
continue automatically for successive annual periods ending on
the day (the "Reapproval Day") of each year set forth on Exhibit
A hereto, provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may
be, provided that in either event its continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in said Act) of any party to
this agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This agreement is
terminable without penalty, on 60 days' notice, by vote of
holders of a majority of the Fund's or, as to any relevant
Series, such Series' outstanding voting securities or by the
Fund's Board as to the Fund or the relevant Series, as the case
may be. This agreement is terminable by you, upon 270 days'
notice, effective on or after the fifth anniversary of the date
hereof. This agreement also will terminate automatically, as to
the Fund or relevant Series, as the case may be, in the event of
its assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of
Shares, you shall not perform any services for any entity other
than investment companies advised or administered by The Dreyfus
Corporation. The Fund acknowledges that the persons employed by
you to assist in the performance of your duties under this
agreement may not devote their full time to such service and
nothing contained in this agreement shall be deemed to limit or
restrict your or any of your affiliates right to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature.
5. Miscellaneous
This agreement has been executed on behalf
of the Fund by the undersigned officer of the Fund in his
capacity as an officer of the Fund. The obligations of this
agreement shall only be binding upon the assets and property of
the Fund and shall not be binding upon any Board member, officer
or shareholder of the Fund individually.
Please confirm that the foregoing is in
accordance with your understanding and indicate your acceptance
hereof by signing below, whereupon it shall become a binding
agreement between us.
Very truly yours,
DREYFYS STRATEGIC INVESTING
By:________________________
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
<PAGE>
EXHIBIT A
Reapproval Date Reapproval Day
September 11, 1996 September 11th
<PAGE>
EXHIBIT 9
DREYFUS STRATEGIC INVESTING
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Shareholder
Services Plan under which the Fund would pay the Fund's
distributor (the "Distributor") for providing services to (a)
shareholders of each series of the Fund or class of Fund shares
set forth on Exhibit A hereto, as such Exhibit may be revised
from time to time, or (b) if no series or classes are set forth
on such Exhibit, shareholders of the Fund. The Distributor
would be permitted to pay certain financial institutions,
securities dealers and other industry professionals
(collectively, "Service Agents") in respect of these services.
The Plan is not to be adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "Act"), and the
fee under the Plan is intended to be a "service fee" as defined
in Article III, Section 26, of the NASD Rules of Fair Practice.
The Fund's Board, in considering whether the Fund should
implement a written plan, has requested and evaluated such
information as it deemed necessary to an informed determination
as to whether a written plan should be implemented and has
considered such pertinent factors as it deemed necessary to form
the basis for a decision to use Fund assets for such purposes.
In voting to approve the implementation of such a plan, the
Board has concluded, in the exercise of its reasonable business
judgment and in light of applicable fiduciary duties, that there
is a reasonable likelihood that the plan set forth below will
benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to the Distributor a fee at
the annual rate set forth on Exhibit A in respect of the
provision of personal services to shareholders and/or the
maintenance of shareholder accounts. The Distributor shall
determine the amounts to be paid to Service Agents and the basis
on which such payments will be made. Payments to a Service
Agent are subject to compliance by the Service Agent with the
terms of any related Plan agreement between the Service Agent
and the Distributor.
2. For the purpose of determining the fees payable
under this Plan, the value of the net assets of the Fund or the
net assets attributable to each series or class of Fund shares
identified on Exhibit A, as applicable, shall be computed in the
manner specified in the Fund's charter documents for the
computation of net asset value.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by a majority of the Board members, including a
majority of the Board members who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or
indirect financial interest in the operation of this Plan or in
any agreements entered into in connection with this Plan,
pursuant to a vote cast in person at a meeting called for the
purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4 hereof.
6. This Plan may be amended at any time by the
Board, provided that any material amendments of the terms of
this Plan shall become effective only upon approval as provided
in paragraph 4 hereof.
7. This Plan is terminable without penalty at any
time by vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan.
8. The obligations hereunder and under any related
Plan agreement shall only be binding upon the assets and
property of the Fund or the affected series or class, as the
case may be, and shall not be binding upon any Board member,
officer or shareholder of the Fund individually.
Dated: January 15, 1993
As Revised: August 24, 1994
<PAGE>
EXHIBIT A
Fee as a percentage of
Name of Class average daily net assets
------------- ------------------------
Class A .25
Class B .25
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Condensed
Financial Information" and "Custodian, Transfer and Dividend
Disbursing
Agent, Counsel and Independent Auditors" and to the use of our
report
dated December 14, 1994, in this Registration Statement (Form
N-1A 33-6013)
of Dreyfus Strategic Investing.
ERNST & YOUNG LLP
New York, New York
December 28, 1994
<PAGE>
EXHIBIT 15
DREYFUS STRATEGIC INVESTING
DISTRIBUTION PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Distribution
Plan (the "Plan") relating to its Class B shares in accordance
with Rule 12b-1, promulgated under the Investment Company Act of
1940, as amended (the "Act"). Under the Plan, the Fund would
pay the Fund's distributor (the "Distributor") for distributing
the Fund's Class B shares. If this proposal is to be
implemented, the Act and said Rule 12b-1 require that a written
plan describing all material aspects of the proposed financing
be adopted by the Fund.
The Fund's Board, in considering whether the Fund should
implement a written plan, has requested and evaluated such
information as it deemed necessary to an informed determination
as to whether a written plan should be implemented and has
considered such pertinent factors as it deemed necessary to form
the basis for a decision to use assets attributable to the
Fund's Class B shares for such purposes.
In voting to approve the implementation of such a plan, the
Board members have concluded, in the exercise of their
reasonable business judgment and in light of their respective
fiduciary duties, that there is a reasonable likelihood that the
plan set forth below will benefit the Fund and holders of its
Class B shares.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to the Distributor for distribution
a fee at an annual rate of .75 of 1% of the value of the average
daily net assets attributable to Class B.
2. For the purposes of determining the fees payable under
this Plan, the value of the Fund's net assets attributable to
Class B shall be computed in the manner specified in the Fund's
charter documents as then in effect for the computation of the
value of the Fund's net assets attributable to such Class.
3. The Fund's Board shall be provided, at least
quarterly, with a written report of all amounts expended
pursuant to this Plan. The report shall state the purpose for
which the amounts were expended.
4. This Plan will become effective upon the later to
occur of (i) the consummation of the transactions contemplated
by the Amended and Restated Agreement and Plan of Merger dated
as of December 5, 1993 by and among Mellon Bank Corporation,
Mellon Bank, N.A., XYZ Sub Corporation and The Dreyfus
Corporation or (ii) approval by (a) holders of a majority of the
Fund's outstanding Class B shares, and (b) a majority of the
Board members, including a majority of the Board members who are
not "interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year from
its effective date, unless earlier terminated in accordance with
its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4(b)
hereof.
6. This Plan may be amended at any time by the Fund's
Board, provided that (a) any amendment to increase materially
the costs which the Fund may bear pursuant to this Plan shall be
effective only upon approval by a vote of the holders of a
majority of the Fund's outstanding Class B shares, and (b) any
material amendments of the terms of this Plan shall become
effective only upon approval as provided in paragraph 4(b)
hereof.
7. This Plan is terminable without penalty at any time by
(a) vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, or (b) vote of the holders of a majority of the
Fund's outstanding Class B shares.
8. The obligations hereunder and under any related Plan
agreement shall only be binding upon the assets and property of
the Fund and shall not be binding upon any Board member, officer
or shareholder of the Fund individually.
Dated: May 27, 1994
<PAGE>
Other Exhibit (a)
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frederick C.
Dey, Eric B. Fischman, Ruth D. Leibert and John E. Pelletier and
each of them, with full power to act without the other, his or
her true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities (until
revoked in writing) to sign any and all amendments to the
Registration Statement for each Fund listed on Schedule
A attached hereto (including post-effective amendments and
amendments thereto), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
/s/David W. Burke
- ----------------------------
David W. Burke, Board Member
- ----------------------------
Diane Dunst, Board Member
- ----------------------------
David P. Feldman, Board Member
- ----------------------------
Rosalind Gersten Jacobs, Board
Member
- ----------------------------
Jay I. Meltzer, Board Member
- ----------------------------
Daniel Rose, Board Member
- ----------------------------
Warren B. Rudman, Board Member
- ----------------------------
Sander Vanocur, Board Member
Dated: August 29, 1994
<PAGE>
SCHEDULE A
GROUP VIII
Dreyfus BASIC Money Market Fund, Inc.
Dreyfus BASIC U.S. Government Money Market Fund
Dreyfus Strategic Income
Dreyfus Strategic Governments Income, Inc.
Dreyfus California Intermediate Municipal Bond Fund
Dreyfus Connecticut Intermediate Municipal Bond fund
Dreyfus Massachusetts Intermediate Municipal Bond Fund
Dreyfus New Jersey Intermediate Municipal Bond Fund
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
Dreyfus Strategic Investing
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitute and appoints Frederick C.
Dey, Eric B. Fischman, Ruth D. Leibert and John E. Pelletier and
each of them, with full power to act without the other, her true
and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for her and in her name, place
and stead, in any and all capacities (until revoked in
writing) to sign any and all amendments to the Registration
Statement for each Fund listed on Schedule A attached hereto
(including post-effective amendments and amendments thereto), and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform
each and every act and thing ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his
or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
/s/Marie E. Connolly
- ----------------------------
Marie E. Connolly, President and Treasurer
Dated: August 29, 1994
<PAGE>
SCHEDULE A
GROUP VIII
Dreyfus BASIC Money Market Fund, Inc.
Dreyfus BASIC U.S. Government Money Market Fund
Dreyfus Strategic Income
Dreyfus Strategic Governments Income, Inc.
Dreyfus California Intermediate Municipal Bond Fund
Dreyfus Connecticut Intermediate Municipal Bond fund
Dreyfus Massachusetts Intermediate Municipal Bond Fund
Dreyfus New Jersey Intermediate Municipal Bond Fund
Dreyfus Pennsylvania Intermediate Municipal Bond Fund
Dreyfus Strategic Investing
<PAGE>
Other Exhibit (b)
DREYFUS STRATEGIC INVESTING
Assistant Secretary's Certificate
The undersigned, Eric B. Fischman, Assistant
Secretary of Dreyfus Strategic Investing (the "Fund"), hereby
certifies that set forth below is a copy of the resolution
adopted by the Written Consent of the Fund's Board members and
Marie E. Connolly, President and Treasurer of the Fund on August
29, 1994, authorizing the signing by Federick C. Dey, Eric B.
Fischman, Ruth D. Leibert and John E. Pelletier on behalf of the
proper officers of the Fund pursuant to a power of attorney:
RESOLVED, that the Registration Statement and any
and all amendments and supplements thereto may be signed by
any one of Frederick C. Dey, Eric B. Fischman, Ruth D. Leibert
and John E. Pelletier as the attorney-in-fact for the proper
officers of the Fund, with full power of substitution and
resubstitution; and that the appointment of each of such persons
as such attorney-in-fact hereby is authorized and approved; and
that such attorneys-in-fact, and each of them, shall have full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection with such
Registration Statement and any and all amendments and supplements
thereto, as fully to all intents and purposes as the officer for
whom he is acting as attorney-in-fact, might or could do in
person.
IN WITNESS WHEREOF, I have hereunto signed my name
and affixed the seal of the Fund on December 29, 1994.
/s/Eric B. Fischman
----------------------------
Eric B. Fischman
Assistant Secretary
(SEAL)
