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. 15 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 15 [ X ]
(Check appropriate box or boxes.)
PREMIER 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)
----
X on September 1, 1995 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) 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.
PREMIER STRATEGIC INVESTING
Cross-Reference Sheet Pursuant to Rule 495(b)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 3
4 General Description of Registrant 6
5 Management of the Fund 20
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 37
7 Purchase of Securities Being Offered 21
8 Redemption or Repurchase 30
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-28
13 Investment Objectives and Policies B-2
14 Management of the Fund B-10
15 Control Persons and Principal B-10
Holders of Securities
16 Investment Advisory and Other B-15
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
PREMIER STRATEGIC INVESTING
Cross-Reference Sheet Pursuant to Rule 495(b) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-26
18 Capital Stock and Other Securities B-28
19 Purchase, Redemption and Pricing B-16, B-19,
of Securities Being Offered B-24
20 Tax Status *
21 Underwriters B-16
22 Calculations of Performance Data B-27
23 Financial Statements B-35
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.
- ---------------------------------------------------------------------------
PROSPECTUS SEPTEMBER 1, 1995
PREMIER STRATEGIC INVESTING
- ---------------------------------------------------------------------------
PREMIER 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.
BY THIS PROSPECTUS, THE FUND IS OFFERING FOUR CLASSES OF SHARES _
CLASS A, CLASS B, CLASS C AND CLASS R _ WHICH ARE DESCRIBED HEREIN. SEE
"ALTERNATIVE PURCHASE METHODS."
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
YOU CAN PURCHASE OR REDEEM ALL CLASSES OF SHARES BY TELEPHONE USING
DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED SEPTEMBER 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 144.
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.
- ---------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Fee Table......................................... 3
Condensed Financial Information................... 3
Alternative Purchase Methods...................... 5
Description of the Fund........................... 6
Management of the Fund............................ 19
How to Buy Fund Shares ........................... 20
Shareholder Services.............................. 25
How to Redeem Fund Shares......................... 30
Distribution Plan and Shareholder Services Plan... 34
Dividends, Distributions and Taxes................ 35
Performance Information........................... 36
General Information............................... 37
- ---------------------------------------------------------------------------
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.
- ---------------------------------------------------------------------------
This Page Intentionally Left Blank
Page 2
<TABLE>
<CAPTION>
FEE TABLE
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C CLASS R
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................... 4.50% None None None
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)..... None* 4.00% 1.00% None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees....................................... .75% .75% .75% .75%
12b-1 Fees............................................ None .75% .75% None
Other Expenses........................................ .79% .58% .79% .54%
Total Fund Operating Expenses......................... 1.54% 2.08% 2.29% 1.29%
EXAMPLE:
You 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: CLASS A CLASS B CLASS C CLASS R
1 YEAR....................... $60 $61/$21** $33/$23** $ 13
3 YEARS....................... $91 $95/$65** $ 72 $ 41
5 YEARS....................... $125 $132/$112** $123 $ 71
10 YEARS...................... $220 $215*** $263 $156
</TABLE>
* A contingent deferred sales charge of 1.00% may be assessed on certain
redemptions of Class A shares purchased without an initial sales
charge as part of an investment of $1 million or more.
** Assuming no redemption of shares.
*** Ten year figures assume conversion of Class B shares to Class A
shares at the end of the 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 costs and expenses borne by the Fund and investors, the payment of which
will reduce investors' annual return. Other Expenses for Class C and Class R
are based on amounts for Class A for the Fund's last fiscal year. Long-term
investors in Class B or Class C 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 (except where
noted) by Ernst & Young LLP, the Fund's independent auditors, whose report
thereon appears in the Statement of Additional Information. Further financial
data and related notes are included in the Statement of Additional
Information, available upon request. No financial information is available
for Class C or Class R shares, which had not been offered as of the date of
this Prospectus.
Page 3
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 period indicated. The
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
---------------------------------------------------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS
ENDED ENDED ENDED
YEAR ENDED OCTOBER 31, APRIL 30, 1995 OCTOBER 31, APRIL 30, 1995
---------------------------------------------------------------- (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA: 1986(1) 1987 1988 1989 1990 1991 1992 1993 1994 1993(2) 1994
------ ----- ----- ----- ----- ----- ------ ----- ----- ------ -----
Net asset value,
beginning of period.. $12.50 $12.51 $15.79 $15.85 $18.73 $18.03 $22.12 $19.90 $23.77 $19.83 $21.38 $23.62 $19.58
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income
(loss)_net........ .06 .13 1.00 .48 .31 .21 .06 .03 .01 .20 (.07) (.04) .13
Net realized and
unrealized gain
(loss) on investment.. .01 3.15 (.52) 3.70 (.35) 5.77 (.46) 3.89 (1.54) .29 2.31 (1.62) .28
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM
INVESTMENT
OPERATIONS....... .07 3.28 .48 4.18 (.04) 5.98 (.40) 3.92 (1.53) .49 2.24 (1.66) .41
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net....... (.06) - (.20) (1.30) (.21) (.34) (.14) (.05) - (.05) - -
(.03) Dividends in excess of
investment income-net.. - - - - - - - - (.12) - - (.09) -
Dividends from net realized gain
on investments... - - (.22) - (.45) (1.55) (1.68) - (2.29) (.54) - (2.29) (.54)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS.. (.06) - (.42) (1.30) (.66) (1.89) (1.82) (.05) (2.41) (.59) - (2.38) (.57)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period...... $12.51 $15.79 $15.85 $18.73 $18.03 $22.12 $19.90 $23.77 $19.83 $19.73 $23.62 $19.58 $19.42
TOTAL INVESTMENT
RETURN (3)... .31%(4) 26.22% 2.88% 28.59% (.31%) 36.50% (2.04%) 19.71% (6.92%) 2.70%(4) 10.48%(4) (7.58%) 2.28%(4)
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% .61%(4) 1.65%(4) 1.84% .98%(4)
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% .04%(4) .44%(4) .24% .04%(4)
Ratio of net investment income
(loss) to average
net assets... .50%(4 1.14% 5.71% 2.63% 1.66% 1.07% .22% .16% .04% 1.03%(4) (.69%)(4) (.61%) .65%(4)
Decrease reflected in above
expense ratios due to
expense limitation.. 1.04%(4) .10% .19% .29% .08% - - - - - - - -
Portfolio Turnover
Rate........ - 321.23% 167.64% 228.12% 275.33% 207.10% 204.73% 237.14% 199.13% 102.28%(4) 237.14% 199.13% 102.28%(4)
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 $215,137 $25,833 $40,864 $41,558
(1)From October 1, 1986 (commencement of operations) to October 31, 1986.
(2)From January 15, 1993 (commencement of initial offering) to October 31, 1993.
(3)Exclusive of sales load.
(4)Not annualized.
</TABLE>
Page 4
<TABLE>
<CAPTION>
DEBT OUTSTANDING
Six Months Ended
Year Ended October 31, April 30, 1995
--------------------------------------------------------------------------------
1986(1) 1987 1988 1989 1990 1991 1992 1993 1994 (Unaudited)
------- ---- ---- ---- ---- ---- ---- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Amount of debt outstanding at
end of period (in thousands) __ __ __ 18,350 $9,020 $23,994 $23,300 $35,100 - -
Average amount of debt
outstanding throughout
period (in thousands)(2) __ $2,513 $6,145 $4,843 $10,388 $12,882 $5,102 $16,419 $11,097 --
Average number of shares
outstanding throughout
period (in thousands)(3) __ 5,193 7,102 6,161 5,807 6,244 10,058 12,321 14,337 -
Average amount of debt per share
throughout period __ $.48 $.87 $.79 $1.79 $.46 $.51 $1.33 $.77 -
(1) From October 1, 1986 (commencement of operations) to October 31, 1986.
(2) Based upon daily outstanding borrowings.
(3) Based upon month-end balances.
</TABLE>
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 calling the number set forth on the cover page of this Prospectus.
ALTERNATIVE PURCHASE METHODS
The Fund offers you four methods of purchasing Fund shares. Orders
for purchases of Class R shares, however, may be placed only for certain
eligible investors as described below. If you are not eligible to purchase
Class R shares, you may choose from Class A, Class B and Class C 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 Fund 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
such 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.
Class C 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 C shares are subject to
Page 5
1% CDSC, which is assessed only if you redeem such shares within one year of
their purchase. See "How to Buy Fund Shares _ Class C Shares" and "How to
Redeem Fund Shares _ Contingent Deferred Sales Charge _ Class C 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 C and an annual
distribution fee at the rate of .75 of 1% of the value of the average daily
net assets of Class C. See "Distribution Plan and Shareholder Services Plan."
The distribution fee paid by Class C will cause such Class to have a higher
expense ratio and to pay lower dividends than Class A.
Class R shares may not be purchased directly by individuals, although
eligible institutions may purchase Class R shares for accounts maintained by
individuals. Class R shares are sold at net asset value per share only to
institutional investors acting for themselves or in a fiduciary, advisory,
agency, custodial or similar capacity for qualified or non-qualified employee
benefit plans, including pension, profit-sharing, SEP-IRAs and other deferred
compensation plans, whether established by corporations, partnerships,
non-profit entities or state and local governments, but not including IRAs or
IRA "Rollover Accounts."Class R shares are not subject to an annual service
fee or distribution fee.
The decision as to which Class of shares is more beneficial to you
depends on the amount and the intended length of your investment. If you are
not eligible to purchase Class R shares, you should consider whether, during
the anticipated life of your investment in the Fund, the accumulated
distribution fee and CDSC, if any, on Class B or Class C shares 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. Additionally, 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
distribution fees on Class B or Class C shares may exceed the initial sales
charge on Class A shares during the life of the investment. Finally, you
should consider the effect of the CDSC and any conversion rights of the
Classes in the context of your own investment time frame. For example, while
Class C shares have a shorter CDSC period than Class B shares, Class C shares
do not have a conversion feature and, therefore, are subject to an ongoing
distribution fee. Thus, Class B shares may be more attractive than Class C
shares to investors with longer term investment outlooks. Generally, Class A
shares may be more appropriate for investors who invest $100,000 or more in
Fund shares, but may not be appropriate for investors who invest less than
$50,000 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.
Page 6
("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. Options and futures transactions involve
so-called "derivative securities." See "Risk Factors" below.
INVESTMENT TECHNIQUES
LEVERAGE THROUGH BORROWING _ The Fund may borrow for investment purposes up
to 331/3% of the value of its total assets. This borrowing, which is known as
leveraging, generally will be unsecured, except to the extent the Fund enters
into reverse repurchase agreements described below. Leveraging will
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.
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.
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. 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.
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
Page 7
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 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 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 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,
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 to possible continued holding of a security which might otherwise
have been sold to protect against depreciation in its market price. 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. 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. Similarly, the principal reason for writing covered put options is
to realize income in the form of premiums. 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" by purchasing an option on the same
security 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 indices listed on national securities exchanges or traded in the
over-the-counter market as an investment vehicle for
Page 8
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 indices, 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 or 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,
Page 9
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.
To the extent the Fund is engaging in a futures transaction as a
hedging device, because of 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 if, for example, losses on the
portfolio securities exceed gains on the futures contract or losses on the
futures contract exceed gains on the portfolio securities. For futures
contracts based on indices, 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 the market does not move 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.
Furthermore, if in such circumstances the Fund has insufficient cash, it may
have to sell securities to meet daily variation margin requirements. The Fund
may have to sell such 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
Page 10
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 as a substitute for a comparable market position in the
underlying securities or for hedging purposes.
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 indices 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 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 or 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
Page 11
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.
Page 12
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 investments 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 or statement of additional
information.
FORWARD COMMITMENTS _ The Fund may purchase securities on a when-issued or
forward commitment 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.
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
Page 13
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. 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
Page 14
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, which
currently limits borrowing to no more than 331/3% of the value of the Fund's
total assets; 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. See
"Investment Objective and Management Policies _ Investment Restrictions" in
the Statement of Additional Information.
Page 15
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 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
Page 16
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 Statement of Additional Information.
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.
Page 17
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.
The use of investment techniques such as short-selling, engaging in
financial futures and options transactions, leverage through borrowing,
purchasing securities on a forward commitment basis and lending portfolio
securities involves greater risk than that incurred by many other funds with
a similar objective. These risks are described above under "Investment
Techniques." In addition, using these techniques may produce higher than
normal portfolio turnover and may affect the degree to which the Fund's net
asset value fluctuates. Higher portfolio turnover rates are likely to result
in comparatively greater brokerage commissions or transaction costs.
Short-term gains realized from portfolio transactions are taxable to
shareholders as ordinary income. The Fund's ability to engage in certain
short-term transactions may be limited by the requirement that, to qualify as
a regulated investment company, the Fund must earn less than 30% if 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. See "Portfolio Transactions" in the Statement of
Additional Information.
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 value 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.
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
Page 18
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 August
2, 1995, The Dreyfus Corporation managed or administered approximately $79
billion in assets for more than 1.8 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 Timothy M.
Ghriskey. He has held that position since August 1995, and has been an
employee of The Dreyfus Corporation since July 1995. From 1985 to 1995, Mr.
Ghriskey was Vice President and Associate Managing Partner of Loomis, Sayles
& Company in New York. The Fund's other portfolio managers are identified in
the 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)
Page 19
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
more than $203 billion in assets as of June 30, 1995, including approximately
$73 billion in mutual fund assets. As of June 30, 1995, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $707 billion in assets, including
approximately $71 billion in mutual fund assets.
For the fiscal year ended October 31, 1994, the Fund paid The Dreyfus
Corporation a management 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 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 use part or all of such payments to pay Service Agents
in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor's ultimate parent company is Boston Institutional Group, Inc.
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, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
GENERAL _ Class A shares, Class B shares and Class C shares may be purchased
only by clients of certain financial institutions (which may include banks),
securities dealers ("Selected Dealers") and other industry professionals
(collectively, "Service Agents"), except that 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 may purchase Class A shares
directly through the Distributor. Subsequent purchases may be sent directly
to the Transfer Agent or your Service Agent.
Class R shares are offered only to institutional investors acting for
themselves or in a fiduciary, advisory, agency, custodial or similar capacity
for qualified or non-qualified employee benefit plans, including pension,
profit-sharing, SEP-IRAs and other deferred compensation plans, whether
established by corporations, partnerships, non-profit entities or state and
local governments ("Retirement Plans"). The term "Retirement Plans" does not
include IRAs or IRA "Rollover Accounts." Class R shares may be purchased for
a Retirement Plan only by a custodian, trustee, investment manager or other
entity authorized to act on behalf of such Plan. Institutions effecting
transactions in Class R shares for the accounts of their clients may charge
their clients direct fees in connection with such transactions.
When purchasing Fund shares, you must specify which Class is being
purchased. Share certificates
Page 20
are issued only upon your written request. No certificates are issued for
fractional shares. The Fund reserves the right to reject any purchase order.
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
Distribution Plan or Shareholder Services 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.
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. However, the minimum initial investment for Dreyfus-sponsored Keogh
Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only one participant is $750,
with no minimum on subsequent purchases. Individuals who open an IRA also may
open a non-working spousal IRA with a minimum initial investment of $250.
Subsequent investments in a spousal IRA must be at least $250. 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.
The Code imposes various limitations on the amount that may be
contributed to certain Retirement Plans. These limitations apply with respect
to participants at the plan level and, therefore, do not directly affect the
amount that may be invested in the Fund by a Retirement Plan. Participants
and plan sponsors should consult their tax advisers for details.
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 invest
ment 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, together with the applicable
Class' DDA # as
Page 21
shown below, for purchase of Fund shares in your name:
DDA# 8900119365 Premier Strategic Investing/Class A shares;
DDA# 8900115165 Premier Strategic Investing/Class B shares;
DDA# 8900252367 Premier Strategic Investing/Class C shares; or
DDA# 8900252375 Premier Strategic Investing/Class R shares.
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 Applica
tion 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.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
Builder, the Dreyfus Government Direct Deposit Privilege and Dreyfus Payroll
Savings Plan described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market.
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 Statement of Additional
Information.
If an order is received in proper form 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
Page 22
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. For certain institutions
that have entered into agreements with the Distributor, payment for the
purchase of Fund shares may be transmitted, and must be received by the
Transfer Agent, within three business days after the order is placed. If such
payment is not received within three business days after the order is placed,
the order may be canceled and the institution could be held liable for
resulting fees and/or losses.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by 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"). 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 purchase of Fund 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.
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").
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
--------------------
As a % of As a % of Dealers' Reallowance
offering price net asset value as a % of
Amount of Transaction per share per share offering 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 or more...................... -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of Class A
shares purchased without an initial sales charge as part of an investment of
at least $1,000,000 and redeemed within two years after purchase. The terms
contained in the section of the Fund's Prospectus entitled "How to Redeem
Fund Shares _ Contingent Deferred Sales Charge" (other than the amount of the
CDSC and time periods) are applicable to the Class A shares subject to a
CDSC. Letter of Intent and Right of Accumulation apply to such purchases of
Class A shares.
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 pur-
Page 23
chase 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 Eligible Benefit Plans. 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) met the
requirements of an Eligible Benefit Plan 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.
Class A shares may be purchased at net asset value through certain
broker-dealers and other financial institutions which have entered into an
agreement with the Distributor, which includes a requirement that such shares
be sold for the benefit of clients participating in a "wrap-account" or a
similar program under which such clients pay a fee to such broker-dealer or
other financial institution.
Class A shares also may be purchased at net asset value, subject to
appropriate documentation, through a broker-dealer or other financial
institution with the proceeds from the redemption of shares of a registered
open-end management investment company not managed by The Dreyfus Corporation
or its affiliates. The purchase of Class A shares of the Fund must be made
within 60 days of such redemption and the shareholder must have either (i)
paid an initial sales charge or a contingent deferred sales charge or (ii)
been obligated to pay at any time during the holding period, but did not
actually pay on redemption, a deferred sales charge with respect to such
redeemed shares.
Class A shares also may be purchased at net asset value, subject to
appropriate documentation, by (i) qualified separate accounts maintained by
an insurance company pursuant to the laws of any State or territory of the
United States, (ii) a State, county or city or instrumentality thereof, (iii)
a charitable organization (as defined in Section 501 (c)(3) of the Code)
investing $50,000 or more in Fund shares, and (iv) a charitable remainder
trust (as defined in Section 501(c)(3) of the Code).
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. 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 $297,139 from sales loads on Class A
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
the CDSC on Class B shares.
CLASS C SHARES _ The public offering price for Class C shares is the net
asset value per share of that
Page 24
Class. No initial sales charge is imposed at the time of purchase. A CDSC is
imposed, however, on redemptions of Class C shares made within the first year
of purchase. See "Class B Shares"above and "How to Redeem Fund Shares."
CLASS R SHARES _ The public offering for Class R shares is the net asset
value per share of that Class.
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 theDistributor 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 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 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 EXCHANGES _ You may purchase, in exchange for shares of a Class, shares
of the same Class of 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. You also may exchange your Fund shares that
are subject to a CDSC for shares of Dreyfus Worldwide Dollar Money Market
Fund, Inc. The shares so purchased will be held in a special account created
solely for this purpose ("Exchange Account"). Exchanges of shares from an
Exchange Account only can be made into certain other funds managed or
administered by The Dreyfus Corporation. No CDSC is charged when an investor
exchanges into an Exchange Account; however, the applicable CDSC will be
imposed when shares are redeemed from an Exchange Account or other applicable
fund account. Upon redemption, the applicable CDSC will be calculated without
regard to the time such shares were held in an Exchange Account. See "How to
Redeem Fund Shares." Redemption proceeds for Exchange Account shares are paid
by Federal wire or check only. Exchange Account shares
Page 25
also are eligible for the Dreyfus Auto-Exchange Privilege, Dreyfus Dividend
Sweep and the Automatic Withdrawal Plan. 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. WITH RESPECT TO CLASS R SHARES HELD BY RETIREMENT PLANS, EXCHANGES
MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND
AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
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 applicable "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. 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
distribution option (except for 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
or Class C shares at the time of an exchange; however, Class B or Class C
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 or Class C shares will be cal
culated from the date of the initial purchase of the Class B or Class C
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 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 dur-
Page 26
ing 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, or an
exchange on behalf of a Retirement Plan which is not tax exempt may result
in, 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 shares of the Fund, in shares of the same Class of
other funds in the Premier Family of Funds or certain other funds in the
Dreyfus Family of Funds of which you are currently an investor. WITH RESPECT
TO CLASS R SHARES HELD BY RETIREMENT PLANS, EXCHANGES PURSUANT TO THE DREYFUS
AUTO-EXCHANGE PRIVILEGE MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S RETIREMENT
PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN
ANOTHER FUND. 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 or Class C shares at the time of an exchange; however, Class B or
Class C 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 or Class C shares will be
calculated from the date of the initial purchase of the Class B or Class C
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 BUILDERRegistration Mark _ 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
Page 27
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.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You may deposit as
much of such payments as you elect. To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer Agent a completed Direct Deposit
Sign-Up Form for each type of payment that you desire to include in this
Privilege. The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by notify
ing in writing the appropriate Federal agency. Further, the Fund may
terminate your participation upon 30 days' notice to you.
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 by calling 1-800-645-6561.
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.
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 on the payment date 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 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 these privileges.
Page 28
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. Particular
Retirement Plans, including Dreyfus sponsored retirement plans, may permit
certain participants to establish an automatic withdrawal plan from such
Retirement Plans. Participants should consult their Retirement Plan sponsor
and tax adviser for details. Such a withdrawal plan is different than the
Automatic Withdrawal Plan. An application for the Automatic Withdrawal Plan
can be obtained by calling 1-800-645-6561. There is a service charge of
50cents 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 or Class C 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.
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.
Page 29
HOW TO REDEEM FUND SHARES
GENERAL
You may request redemption of your 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. Service Agents may charge their clients 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.
Distributions from qualified Retirement Plans, IRAs (including IRA
"Rollover Accounts") and certain non-qualified deferred compensation plans,
except distributions representing returns of non-deductible contributions to
the Retirement Plan or IRA, generally are taxable income to the participant.
Distributions from such a Retirement Plan or IRA to a participant prior to
the time the participant reaches age 59-1/2 or becomes permanently disabled
may subject the participant to an additional 10% penalty tax imposed by the
IRS. Participants should consult their tax advisers concerning the timing and
consequences of distributions from a Retirement Plan. Participants in
qualified Retirement Plans will receive a disclosure statement describing the
consequences of a distribution from such a Plan from the administrator,
trustee or custodian of the Plan, before receiving the distribution. The Fund
will not report to the IRS redemptions of Fund shares by qualified Retirement
Plans, IRAs or certain non-qualified deferred compensation plans. The
administrator, trustee or custodian of such Retirement Plans and IRAs will be
responsible for reporting distributions from such Plans and IRAs to the IRS.
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.
Page 30
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:
<TABLE>
<CAPTION>
PAYMENT WAS MADE CDSC AS A % OF AMOUNT
YEAR SINCE PURCHASE INVESTED OR REDEMPTION PROCEEDS
- ------------- ---------------------------
<S> <C>
First.................................................. 4.00
Second................................................. 4.00
Third.................................................. 3.00
Fourth................................................. 3.00
Fifth.................................................. 2.00
Sixth.................................................. 1.00
</TABLE>
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.
CLASS C SHARES _ A CDSC of 1% payable to the Distributor is imposed on any
redemption of Class C shares within one year of the date of purchase. The
basis for calculating the payment of any such CDSC will be the method used in
calculating the CDSC for Class B shares. See "Contingent Deferred Sales
Charge _ Class B Shares" above.
Page 31
WAIVER OF CDSC _ The CDSC applicable to Class B and Class C shares may 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 employees participating in 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, and (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. If the Fund's Board
determines 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 shares by using the regular redemption procedure
through the Transfer Agent, the Wire Redemption Privilege, the Telephone
Redemption Privilege or Dreyfus TELETRANSFER Privilege. If you have given
your Service Agent authority to instruct the Transfer Agent to redeem shares
and to credit the proceeds of such redemptions to a designated account at
your Service Agent, you may redeem shares only in this manner and in accordanc
e with the regular redemption procedure described below. If you wish to use
the other redemption methods described below, you must arrange with your
Service Agent for delivery of the required application(s) to the Transfer
Agent. 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 or its designee will accept orders from
dealers with which the Distributor 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 or its designee 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 or Class C
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 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 a telephone redemption
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
Page 32
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 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 telephone 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 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 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
Page 33
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 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. 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 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
(CLASS A, CLASS B AND CLASS C ONLY)
Class B and Class C shares are subject to a Distribution Plan and
Class A, Class B and Class C shares are subject to a Shareholder Services
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
for distributing the Fund's Class B and Class C shares at an annual rate of
.75 of 1% of the value of the average daily net assets of Class B and Class
C.
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, Class B and Class C shares a fee at the annual rate of .25 of 1% of
the value of the average daily net assets of of each such Class. 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.
Page 34
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
shares of the same Class at net asset value without a sales load. Dividends
and distributions paid in cash to Retirement Plans, however, may be subject
to additional tax as described below. 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 a particular Class
will be borne exclusively by such Class. Class B and Class C shares will
receive lower per share dividends than Class A shares, which will receive
lower per share dividends than Class R shares, because of the higher expenses
borne by the relevant Class. See "Fee Table."
Dividends paid by the Fund to qualified Retirement Plans, IRAs
(including IRA "Rollover Accounts") or certain non-qualified deferred
compensation plans ordinarily will not be subject to taxation until the
proceeds are distributed from the Retirement Plan or IRA. The Fund will not
report dividends paid to such Plans and IRAs to the IRS. Generally,
distributions from such Retirement Plans and IRAs, except those representing
returns of non-deductible contributions thereto, will be taxable as ordinary
income and, if made prior to the time the participant reaches age 59-1/2,
generally will be subject to an additional tax equal to 10% of the taxable
portion of the distribution. If the distribution from such a Retirement Plan
(other than certain governmental or church plans) or IRA for any taxable year
following the year in which the participant reaches age 70-1/2 is less than
the "minimum required distribution" for that taxable year, an excise tax
equal to 50% of the deficiency may be imposed by the IRS. The administrator,
trustee or custodian of such a Retirement Plan or IRA will be responsible for
reporting distributions from such Plans and IRAs to the IRS. Participants in
qualified Retirement Plans will receive a disclosure statement describing the
consequences of a distribution from such a Plan from the administrator,
trustee or custodian of the Plan prior to receiving the distribution.
Moreover, certain contributions to a qualified Retirement Plan or IRA in
excess of the amounts permitted by law may be subject to an excise tax.
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
with-
Page 35
holding 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.
With respect to individual investors and certain non-qualified
Retirement Plans, 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-d
eductible 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 and/or 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. These figures also take into account any applicable service and
distribution fees. As a result, at any given time, the performance of Class B
and Class C should be expected to be lower than that of Class A and the
performance of Class A, Class B and Class C should be expected to be lower
than that of Class R. Performance for each Class will be calculated
separately.
Page 36
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 Fund's average annual total return
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 net asset
value (or maximum offering price in the case of Class A) 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 and Class
C 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. Effective September 1, 1995, the
Fund changed its name from Dreyfus Strategic Investing to Premier Strategic
Investing. 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 four classes _ Class A, Class B, Class C and Class R. 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. However, only holders of Class B and Class C 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
Page 37
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 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; outside the U.S. and
Canada, call 516-794-5452.
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 38
DREYFUS
PROSPECTUS
PREMIER
STRATEGIC INVESTING
(LION LOGO)
Managed by
The Dreyfus Corporation
Copy Rights 1995 Dreyfus Service Corporation
037p14090195
__________________________________________________________________________
PREMIER STRATEGIC INVESTING
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
SEPTEMBER 1, 1995
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Premier Strategic Investing (the "Fund"), dated September 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
Outside the U.S. and Canada -- Call 516-794-5452
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-10
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . B-16
Distribution Plan and Shareholder Services Plan . . . . . . . . . . . . B-17
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . B-18
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . . . . . B-20
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . . B-23
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . . B-24
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . B-26
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . B-27
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . . B-28
Custodian, Transfer and Dividend Disbursing Agent, Counsel
and Independent Auditors. . . . . . . . . . . . . . . . . . . . . B-28
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-30
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . B-35
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . B-46
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. For borrowings for investment purposes,
the Investment Company Act of 1940, as amended (the "Act"), 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.
Short Sales. The Fund may engage in short-selling. 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. 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. 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 indices 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 indices 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 33-1/3% 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 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 Manager 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. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a
lapse of time between the Fund's decision to sell any such security and
the registration of the security permitting sale. During any such period,
the price of the securities will be subject to market fluctuations.
However, 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. 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 has directed the Manager 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 any 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, which cannot be changed without approval by the
holders of a majority (as defined in 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 indices, and options
on futures contracts or indices.
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
(which currently limits borrowing to no more than 331/3% of the value of
the Fund's total assets). For purposes of this investment restriction,
the entry into options, forward contracts, futures contracts, including
those relating to indices, and options on futures contracts or indices
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
indices, and options on futures contracts or indices.
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 33-1/3% 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. Consultant to the Manager since August 1994.
From October 1990 to August 1994, Vice President and Chief
Administrative Officer of the Manager. 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. Mr. Burke is 59 years old and his address
is 200 Park Avenue, New York, New York 10166.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President, a director and,
until August 1994, Chief Operating Officer of the Manager and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until
August 24, 1994, the Fund's distributor. From August 1994 to
December 31, 1994, he was a director of Mellon Bank Corporation. He
is also Chairman of the Board of Noel Group, Inc., a venture capital
company; a trustee of Bucknell University; and a director of the
Muscular Dystrophy Association, HealthPlan Services Corporation,
Belding Heminway Company, Inc., a manufacturer and marketer of
industrial threads, specialty yarns, home furnishings and fabrics,
Curtis Industries, Inc., a national distributor of security products,
chemicals and automotive and other hardware, Simmons Outdoor
Corporation, and Staffing Resources, Inc. Mr. DiMartino is 51 years
old and his address is 200 Park Avenue, New York, New York 10166.
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. Ms. Dunst is 55 years old and her address is 120 East 87th
Street, New York, New York 10128.
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. Ms. Jacobs is 69 years old and 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; and Adjunct Clinical Professor of Medicine
at Cornell College of Medicine. Dr. Meltzer is 66 years old and 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. Mr. Rose is 65
years old and 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. Mr. Rudman is 64 years
old and his address is c/o Paul, Weiss, Rifkind, Wharton & Garrison,
1615 L. Street, N.W., Washington, D.C. 20036.
SANDER VANOCUR, Trustee. Since January 1994, a Visiting Professional
Scholar at the Freedom Forum First Amendment Center at Vanderbilt
University; since January 1992, President of Old Owl Communications,
a full-service communications firm; and since November 1989, 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. Mr. Vanocur is 66 years old and his
address is 2928 P Street, N.W., Washington, D.C. 20007.
The Fund typically pays its Board members an annual retainer and a
per meeting fee and reimburses them for their expenses. The Chairman of
the Board receives an additional 25% of such compensation. The aggregate
amount of compensation paid by the Fund to each Board member for the
fiscal year ended October 31, 1994, and by all other funds in the Dreyfus
Family of Funds for which such person is a Board member (the number of
which is set forth in parentheses next to each Board member's total
compensation) for the year ended December 31, 1994, is as follows:
<TABLE>
<CAPTION>
(5)
(3) Total Compensation
(2) Pension or (4) From Fund and
(1) Aggregate Retirement Benefits Estimated Annual Fund Complex
Name of Board Compensation from Accrued as Part of Benefits Upon Paid to Board
Member the Fund* Fund's Expenses Retirement Member
- ------------- ----------------- -------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
David W. Burke $ 466 none none $ 27,898 (51)
Joseph S. DiMartino $5,625** none none $445,000*** (93)
Diane Dunst $4,000 none none $ 32,602 (9)
Rosalind Gersten Jacobs $1,116 none none $ 57,638 (20)
Jay I. Meltzer $4,000 none none $ 32,102 (9)
Daniel Rose $4,000 none none $ 62,006 (21)
Warren B. Rudman $3,750 none none $ 29,602 (17)
Sander Vanocur $4,000 none none $ 62,006 (21)
</TABLE>
___________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $535 for all Board members as a group.
** Estimated amount for fiscal year ending October 31, 1995.
*** Estimated amount for the year ending December 31, 1995.
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. 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 Services 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.
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., the ultimate parent company of which is Boston
Institutional Group, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 37 years old.
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. He is 30 years old.
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. He is 33 years old.
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. He is 30 years old.
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. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer 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. He is 59 years old.
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. She is 50 years old.
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 August 11, 1995.
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 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 27, 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; W. Keith
Smith, Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman-
Distribution and a director; Philip L. Toia, Vice Chairman-Operations and
Administration; Barbara E. Casey, Vice President-Dreyfus Retirement
Services; Diane M. Coffey, Vice President-Corporate Communications; Elie
M. Genadry, Vice President-Institutional Sales; William F. Glavin, Jr.,
Vice President-Corporate Development; Henry D. Gottmann, Vice President-
Retail Sales and Service; Mark N. Jacobs, Vice President-Legal and
Secretary; Daniel C. Maclean, Vice President and General Counsel; Jeffrey
N. Nachman, Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice
President-Information Services; Katherine C. Wickham, Vice President-Human
Resources; Maurice Bendrihem, Controller; Elvira Oslapas, Assistant
Secretary; and Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman,
Lawrence M. Greene, Julian M. Smerling 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. The Manager is responsible for investment decisions, and
provides the Fund with portfolio managers who are authorized by the Board
to execute purchases and sales of securities. The Fund's portfolio
managers are Timothy M. Ghriskey, Richard B. Hoey, 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 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 preparing and printing
prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders, costs of
shareholders' reports and meetings and any extraordinary expenses. Class
A, Class B and Class C 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
and Class C shares are subject to an annual distribution fee pursuant to
distribution plan adopted in accordance with Rule 12b-1 under the Act.
See "Distribution Plan and Shareholder Services 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 maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. 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. In some states, certain
financial institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.
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 scale 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 -- Class A. Based upon the net asset value of Class
A shares at the close of business on October 31, 1994, the maximum
offering price of a Class A share would have been as follows:
NET ASSET VALUE per share. . . . . . . . . . . . . . . . . . . . $19.83
Sales load for individual sales of shares aggregating less
than $50,000 - 4.5% of offering price
(approximately 4.7% of net asset value per share). . . . . . . .93
Offering price to public . . . . . . . . . . . . . . . . . . . . $20.76
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."
Class B and Class C shares are subject to a Distribution Plan and
Class A, Class B and Class C shares are subject to a Shareholder Services
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
has adopted such a plan (the "Distribution Plan") with respect to Class B
and Class C shares, pursuant to which the Fund pays the Distributor for
distributing the Fund's Class B and Class C shares. The Fund's Board
believes that there is a reasonable likelihood that the Distribution Plan
will benefit the Fund and the holders of Class B and Class C shares.
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 Board members for their review. In addition, the Distribution
Plan provides that it may not be amended to increase materially the costs
which holders of the relevant Class of 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, and by 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 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 so approved by the
Board at a meeting held on August 9, 1995. As to the relevant Class of
shares, the Distribution Plan may be terminated at any time by vote of a
majority of the Board members who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Distribution
Plan or by vote of the holders of a majority of such Class of shares.
For the period from August 24, 1994 (effective date of Distribution
Plan) through October 31, 1994, $58,353 was charged to the Fund, with
respect to Class B shares, under the Distribution Plan. There were no
payments made under the Distribution Plan with respect to Class C shares
during the fiscal year ended October 31, 1994, as Class C shares had not
been offered.
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, Class B and Class
C shares. Under the Shareholder Services 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.
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 Board for its review. In addition, the Shareholder
Services Plan provides that it may not be amended without approval of the
Board, and by 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 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 last so approved on August 9, 1995. 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 (effective date of Shareholder
Services Plan) 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. There were no
payments made under the Shareholder Services Plan with respect to Class C
shares during the fiscal year ended October 31, 1994, as Class C had not
been offered.
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, the
Fund's distributor prior to such date, for advertising, marketing and
distributing Class B shares at an annual rate of .75% of the value of the
average daily net assets of Class B. 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
the provision of shareholder services. For the period from November 1,
1993 through August 23, 1994, the Fund was charged $541,895 with respect
to Class A, and $73,898 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."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
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. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege
on the next business day after receipt by the Transfer Agent of the
redemption request in proper form. Redemption proceeds will be
transferred by Federal Reserve wire only to the commercial bank account
specified by the investor on the Account Application or Shareholder
Services Form. Redemption proceeds, if wired, must be in the amount of
$1,000 or more and will be wired to the investor's account at the bank of
record designated in the investor's file at the Transfer Agent, if the
investor's bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees
ordinarily are imposed by such bank and usually are borne by the investor.
Immediate notification by the correspondent bank to the investor's bank is
necessary to avoid a delay in crediting the funds to the investor's bank
account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at 1-800-
654-7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Share Certificates; Signatures."
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 unless more prompt
transmittal is specifically requested. Redemption proceeds will be on
deposit in the investor's account in an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
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 holder 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.
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.
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. Shares of any Class 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. Exchanges for shares of funds offered without a sales load will
be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load, and additional shares acquired through reinvestment
of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
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.
E. Shares of funds 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 shares being
exchanged were initially purchased.
To accomplish an exchange under item D above, shareholders must
notify the Transfer Agent of their prior ownership of fund shares and
their account number.
To request an exchange, an investor, or the investor's Service Agent
acting on the investor's 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 applicable "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 telephone 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.
Exchanges of Class R shares held by a Retirement Plan may be made
only between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund.
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 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 a personal retirement
plan account, 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 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. With respect to
Class R shares held by a Retirement Plan, exchanges may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund. Shares will be
exchanged on the basis of relative net asset value as described above
under "Fund Exchanges." 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.
Fund Exchanges and the 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 by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the 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. 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 or Class C 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 by a fund may be invested
without imposition of a sales load in shares of other funds
offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with
a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in 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 by a fund may be invested in
shares of other funds that impose a CDSC 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.
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 ordinarily $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. Short-term investments are carried at amortized cost, which
approximates value. Expenses and fees of the Fund, including the
management fee paid by the Fund and the distribution and shareholder
services fees, as applicable, are accrued daily and taken into account for
the purpose of determining the net asset value of the relevant Class'
shares. Because of the differences in operating expenses incurred by each
Class, the per share net asset value of each Class will differ.
Restricted securities, as well as securities or other assets for
which market quotations are not readily available, or are not valued by a
pricing service approved by the Board of Trustees, are valued at fair
value as determined in good faith by the Board of Trustees. The Board of
Trustees will review the method of valuation on a current basis. In
making their good faith valuation of restricted securities, the Trustees
generally will take the following factors into consideration: restricted
securities which are, or are convertible into, securities of the same
class of securities for which a public market exists usually will be
valued at market value less the same percentage discount at which
purchased. This discount will be revised periodically by the Board of
Trustees if the Trustees believe that it no longer reflects the value of
the restricted securities. Restricted securities not of the same class as
securities for which a public market exists usually will be valued
initially at cost. Any subsequent adjustment from cost will be based upon
considerations deemed relevant by the Board of Trustees.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, 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 must 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 of
the Code. Finally, all or a portion of the gain realized from engaging in
"conversion transactions" may be treated as ordinary income under Section
1258 of the Code. "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 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 of the Code. 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 average annual total return for Class A for the 1, 5 and 8.540
year periods ended April 30, 1995 was (6.24%), 7.61% and 11.01%,
respectively. The average annual total return for Class B for the 1 and
2.240 year periods ended April 30, 1995 was (6.33%) and .74%,
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' 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 or Class C, 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 Fund's
net asset value (maximum offering price in the case of Class A) per share
at the beginning of a stated period from the net asset value (maximum
offering price in the case of Class A) per share at the end of the period
(after giving effect to the reinvestment of dividends and distributions
during the period and any applicable CDSC), and dividing the result by the
net asset value (maximum offering price in the case of Class A) 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 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 or Class C 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 or Class
C shares, which, if reflected, would reduce the performance quoted. The
total return for Class A for the period October 16, 1986 to April 30,
1995, based on the maximum offering price per share, was 144.01%. Based
on net asset value per share, the total return for Class A was 155.49% for
this period. The total return for Class B for the period January 15, 1993
through April 30, 1995, after giving effect to the maximum applicable
CDSC, was 1.71%. Without giving effect to the maximum applicable CDSC,
the total return for Class B was 4.44% for this period.
Class C and Class R shares had not been offered as of the date of the
financials and, therefore, no performance data is provided for Class C or
Class R.
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, 90 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.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF INVESTMENTS OCTOBER 31, 1994
COMMON STOCKS--68.1% SHARES VALUE
-------------- --------------
<S> <C> <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 STOCKS
(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>
<TABLE>
<CAPTION>
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;
ACQUISITION PURCHASE PERCENTAGE OF
ISSUER DATE PRICE NET ASSETS VALUATION*
- ------ ------------ ---------- --------------- --------------------
<S> <C> <C> <C> <C>
Genelabs Technologies.................... 3/1/91 $9.00 .08% $1.9125 per share
</TABLE>
* 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>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF FINANCIAL FUTURES
OCTOBER 31, 1994
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* 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>
- ------------------
* 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
September 1, 1995.
See notes to financial statements.
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
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF INVESTMENTS APRIL 30, 1995 (UNAUDITED)
COMMON STOCKS-80.2% SHARES VALUE
-------------- --------------
<S> <C> <C>
BASIC AND PROCESS
INDUSTRIES-10.5% Boise Cascade.......................... 75,000 $ 2,456,250
Dow Chemical........................... 40,000 2,780,000
duPont(EI)deNemours.................... 70,000 4,611,250
Eastman Chemical....................... 30,000 1,702,500
FMC.................................... 50,000 (a) 3,068,750
Foster Wheeler......................... 50,000 1,850,000
Lukens................................. 40,000 1,295,000
Lyondell Petrochemical................. 100,000 2,487,500
OM Group............................... 75,000 1,790,625
Praxair................................ 100,000 2,375,000
Tyco International..................... 50,000 2,625,000
--------------
27,041,875
--------------
CAPITAL GOODS-8.5% Coltec Industries...................... 100,000 (a) 1,825,000
Deere & Co............................. 25,000 2,050,000
Duriron................................ 75,000 1,626,562
Emerson Electric....................... 50,000 3,362,500
Loral.................................. 50,000 2,350,000
TRINOVA................................ 100,000 3,475,000
USA Waste Service...................... 200,000 (a) 3,000,000
WMX Technologies....................... 150,000 4,087,500
--------------
21,776,562
--------------
CONSUMER-8.2% American Greetings, Cl. A............. 125,000 3,406,250
Carnival, Cl. A........................ 50,000 1,243,750
ConAgra................................ 90,000 2,992,500
Mattel................................. 70,000 1,662,500
OfficeMax.............................. 155,000 (a) 3,971,875
Premark International.................. 70,000 3,377,500
Sears, Roebuck......................... 50,000 2,712,500
Wal-Mart Stores........................ 70,000 1,662,500
--------------
21,029,375
--------------
ENERGY-12.7% Amerada Hess.......................... 75,000 3,796,875
Amoco.................................. 75,000 4,921,875
Apache................................. 70,000 1,890,000
Dresser Industries..................... 75,000 1,640,625
Lubrizol............................... 100,000 3,487,500
Murphy Oil............................. 90,000 3,937,500
Noble Affiliates....................... 40,000 1,080,000
Occidental Petroleum................... 200,000 4,600,000
Phillips Petroleum..................... 100,000 3,500,000
Tidewater.............................. 75,000 1,781,250
Triton Energy.......................... 50,000 (a) 1,925,000
--------------
32,560,625
--------------
DREYFUS STRATEGIC INVESTING
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
FINANCIAL-5.0% Citicorp............................... 100,000 $ 4,637,500
Equitable of Iowa...................... 120,000 4,395,000
FirstFed Michigan...................... 75,000 1,818,750
Overseas Union Bank.................... 360,000 2,078,910
--------------
12,930,160
--------------
HEALTH CARE-12.8%.. AmeriSource Health, Cl. A.............. 102,000 (a) 2,256,750
Aramed Callable........................ 35,000 (a) 376,250
Bard (C.R.)............................ 600 17,475
Baxter International................... 75,000 2,606,250
Bergen Brunswig, Cl. A................. 30,000 (a) 712,500
Boston Scientific...................... 170,760 (a) 4,653,210
Genzyme................................ 75,000 3,206,250
Guidant................................ 100,000 (a) 1,987,500
Immunex................................ 65,000 (a) 780,000
McKesson............................... 100,000 3,962,500
Medtronic.............................. 50,000 3,718,750
Pfizer................................ 50,000 4,331,250
Sofamor/Danek Group.................... 50,000 (a) 1,212,500
St. Jude Medical....................... 70,000 3,010,000
--------------
32,831,185
--------------
INSURANCE-5.0%.. American International Group........... 20,000 2,135,000
Commercial Union PLC................... 200,000 1,794,097
EXEL.................................. 70,000 3,185,000
PMI Group.............................. 40,000 1,490,000
TIG Holdings........................... 125,000 2,812,500
Union des Assurances de Paris.......... 50,000 1,356,345
--------------
12,772,942
--------------
MEDIA/ENTERTAINMENT-.7% Time Warner............................ 50,000 1,831,250
--------------
MINING AND METALS-4.0% ASARCO................................ 50,000 1,362,500
Freeport McMoRan Copper & Gold, Cl. A.. 75,000 1,565,625
Inco................................... 75,000 1,940,625
Newmont Mining......................... 30,000 1,256,250
Placer Dome............................ 175,000 4,156,250
--------------
10,281,250
--------------
TECHNOLOGY-9.3% Adobe Systems......................... 50,000 2,912,500
Compaq Computer........................ 100,000 (a) 3,800,000
First Financial Management............. 35,000 2,559,375
General Instrument..................... 75,000 (a) 2,559,375
International Business Machines........ 30,000 2,842,500
National Semiconductor................. 100,000 (a) 2,287,500
Novell................................. 150,000 (a) 3,262,500
DREYFUS STRATEGIC INVESTING
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995 (UNAUDITED)
COMMON STOCKS (CONTINUED) SHARES VALUE
-------------- --------------
TECHNOLOGY (CONTINUED) PLATINUM Technology.................... 100,000 (a) $ 2,000,000
3Com................................... 30,000 (a) 1,680,000
--------------
23,903,750
--------------
TELECOMMUNICATIONS-2.3% AT&T................................... 80,000 4,060,000
General DataComm Industries............ 200,000 (a) 1,925,000
--------------
5,985,000
--------------
TRANSPORTATION-1.2% Burlington Northern.................... 50,000 2,975,000
--------------
TOTAL COMMON STOCKS
(cost $191,304,970)................... $205,918,974
==============
CONVERTIBLE PREFERRED STOCKS-1.6%
FINANCIAL; Citicorp, Cum., $1.22
(cost $3,960,000).................... 200,000 $ 4,000,000
==============
PRINCIPAL
AMOUNT
--------------
U.S. TREASURY NOTES-9.6%
4.25%, 5/15/1996....................... $ 12,500,000 $ 12,238,288
6.125%, 7/31/1996...................... 12,500,000 12,455,075
--------------
TOTAL U.S. TREASURY NOTES
(cost $24,665,095)................... $ 24,693,363
==============
SHORT-TERM INVESTMENTS-11.9%
U.S. TREASURY BILLS:
5.01%, 6/1/1995........................ $ 5,329,000 (b) $ 5,301,342
5.20%, 7/27/1995....................... 25,677,000 25,315,468
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $30,626,143)................... $ 30,616,810
==============
TOTAL INVESTMENTS (cost $250,556,208)....................................... 103.3% $265,229,147
======== ==============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (3.3%) $(8,533,836)
======== ==============
NET ASSETS.................................................................. 100.0% $256,695,311
======== ==============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Partially held by brokers as collateral for open short positions.
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF SECURITIES SOLD SHORT APRIL 30, 1995 (UNAUDITED)
COMMON STOCKS SHARES VALUE
- --------------------- ------------ ------------
<S> <C> <C>
Chiron...................................................................... 75,000 $4,143,750
Nokia A.D.R................................................................. 50,000 2,050,000
------------
TOTAL SECURITIES SOLD SHORT (proceeds $5,769,946)........................... $6,193,750
=============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1995 (UNAUDITED)
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $250,556,208)-see statement..................................... $265,229,147
Cash.................................................................... 316,803
Receivable for investment securities sold............................... 29,708,436
Receivable from brokers for proceeds on securities sold short........... 5,769,946
Dividends and interest receivable....................................... 656,155
Receivable for shares of Beneficial Interest subscribed................. 21,073
Prepaid expenses........................................................ 50,962
--------------
301,752,522
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 158,827
Due to Distributor...................................................... 78,462
Payable for investment securities purchased............................. 37,904,824
Securities sold short, at value
(proceeds $5,769,946)-see statement................................... 6,193,750
Payable for shares of Beneficial Interest redeemed...................... 529,877
Loan commitment fees.................................................... 6,250
Accrued expenses........................................................ 185,221 45,057,211
------------- --------------
NET ASSETS ................................................................ $256,695,311
===============
REPRESENTED BY:
Paid-in capital......................................................... $240,711,438
Accumulated undistributed investment income-net......................... 522,258
Accumulated undistributed net realized gain on investments.............. 1,211,515
Accumulated net unrealized appreciation on investments and
foreign currency transactions......................................... 14,250,100
--------------
NET ASSETS at value......................................................... $256,695,311
==============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value authorized)...................... 10,904,634
==============
Class B Shares
(unlimited number of $.001 par value authorized)...................... 2,140,379
==============
NET ASSET VALUE per share:
Class A Shares ($215,137,073 / 10,904,634 shares)....................... $19.73
=======
Class B Shares ($41,558,238 / 2,140,379 shares)......................... $19.42
=======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF OPERATIONS SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
INVESTMENT INCOME:
INCOME:
<S> <C> <C>
Interest.............................................................. $ 3,021,150
Cash dividends (net of $7,890 foreign taxes withheld at source)....... 1,378,589
------------
TOTAL INCOME...................................................... $4,399,739
EXPENSES:
Management fee-Note 3(a).............................................. 975,475
Shareholder servicing costs-Note 3(c)................................. 512,726
Distribution fees (Class B shares)-Note 3(b).......................... 149,686
Dividends on securities sold short.................................... 70,017
Loan commitment fees-Note 2........................................... 37,708
Professional fees..................................................... 34,030
Custodian fees........................................................ 30,294
Registration fees..................................................... 18,844
Trustees' fees and expenses-Note 3(d)................................. 18,834
Prospectus and shareholders' reports.................................. 3,767
Miscellaneous......................................................... 3,415
------------
TOTAL EXPENSES.................................................... 1,854,796
------------
INVESTMENT INCOME-NET............................................. 2,544,943
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) on investments-Note 4(a):
Long transactions (including options transactions).................... $ 2,181,474
Short sale transactions............................................... (2,260,263)
Net realized (loss) on financial futures-Note 4(a)...................... (126,425)
Net realized gain on foreign currency transactions...................... 16
------------
NET REALIZED (LOSS)................................................... (205,198)
------------
Net unrealized appreciation on investments and securities sold short ... 3,764,618
Net unrealized appreciation on translation of assets and liabilities in
foreign currencies.................................................... 965
------------
TOTAL UNREALIZED APPRECIATION......................................... 3,765,583
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 3,560,385
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $6,105,328
============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC INVESTING
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
OCTOBER 31, APRIL 30, 1995
1994 (UNAUDITED)
-------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income (loss)-net........................................... $ (115,350) $ 2,544,943
Net realized gain (loss) on investments................................ 8,966,398 (205,198)
Net unrealized appreciation (depreciation) on investments for the period (30,980,097) 3,765,583
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...... (22,129,049) 6,105,328
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income-net:
Class A shares....................................................... -- (595,708)
Class B shares....................................................... -- (52,362)
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) (6,469,383)
Class B shares....................................................... (2,951,918) (1,137,287)
-------------- --------------
TOTAL DIVIDENDS.................................................. (31,091,813) (8,254,740)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares....................................................... 49,925,537 12,787,035
Class B shares....................................................... 21,282,593 2,868,915
Dividends reinvested:
Class A shares....................................................... 25,815,338 6,576,053
Class B shares....................................................... 2,988,881 1,152,348
Cost of shares redeemed:
Class A shares....................................................... (65,443,064) (41,748,448)
Class B shares....................................................... (2,932,744) (3,062,243)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS 31,636,541 (21,426,340)
-------------- --------------
TOTAL (DECREASE) IN NET ASSETS................................. (21,584,321) (23,575,752)
NET ASSETS:
Beginning of period.................................................... 301,855,384 280,271,063
-------------- --------------
End of period [including distributions in excess of investment
income-net; ($1,374,615) in 1994 and undistributed investment
income-net; $522,258 in 1995]........................................ $280,271,063 $256,695,311
============== ==============
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------ ------------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
OCTOBER 31, APRIL 30, 1995 OCTOBER 31, APRIL 30, 1995
1994 (UNAUDITED) 1994 (UNAUDITED)
-------------- --------- -------------- -------------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................... 2,345,076 669,113 993,936 152,973
Shares issued for dividends reinvested 1,240,296 357,006 144,600 63,386
Shares redeemed..................... (3,127,724) (2,192,211) (144,563) (163,498)
-------------- ------------ ------------ ----------
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING....... 457,648 (1,166,092) 993,973 52,861
============== ============ ============ ==========
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS STRATEGIC INVESTING
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated
September 1, 1995.
DREYFUS STRATEGIC INVESTING
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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. Premier Mutual
Fund Services, Inc. (the "Distributor") acts as the distributor of the Fund's
shares. The Distributor, located at One Exchange Place, Boston, Massachusetts
02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a
provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
Boston Institutional Group, Inc. The Dreyfus Corporation ("Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A.
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 defered 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.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Investments in forward currency exchange
contracts are valued at the offsetting rates.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
and maturities of short-term securities, sales of foreign currencies, the
difference between the amounts of dividends, interest and foreign withholding
taxes recorded on the Fund's books, and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities other than
investments in securities at fiscal year end, resulting from changes in
exchange rates.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
DREYFUS STRATEGIC INVESTING
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
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.
During the six months ended April 30, 1995, there were no borrowings
under the line of credit.
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 six months ended
April 30, 1995.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $110,285 during the six months ended April 30, 1995 from commissions
earned on sales of the Fund's Class A shares.
(B) Under a Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, 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. During the six months ended April 30,
1995, $149,686 was charged to the Fund pursuant to the Plan.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor,
at an annual rate of .25 of 1% of the value of the average daily net assets
of Class A and Class B shares for servicing shareholder accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. For the six months ended April 30,
1995, $275,263 and $49,895 were
DREYFUS STRATEGIC INVESTING
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
charged to the Class A and Class B shares, respectively, by the Distributor
pursuant to the Shareholder Services Plan.
(D) Each trustee who is not an "affiliated person" as defined in the Act,
receives from the Fund an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
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 six months ended April 30,
1995:
<TABLE>
<CAPTION>
PURCHASES SALES
------------- -------------
<S> <C> <C>
Long transactions................................................ $227,289,895 $189,210,140
Short sale transactions.......................................... 52,462,528 22,313,269
------------- -------------
TOTAL.......................................................... $279,752,423 $211,523,409
============ ============
</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 April 30,
1995, and their related market values and proceeds are set forth in the
Statement of Securities Sold Short.
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. At April 30, 1995, there were no financial futures contracts
outstanding.
(B) At April 30, 1995, accumulated net unrealized appreciation on
investments was $14,249,135, consisting of $18,244,296 gross unrealized
appreciation and $3,995,161 gross unrealized depreciation, excluding foreign
currency transactions.
At April 30, 1995, 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
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS STRATEGIC INVESTING
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Strategic Investing, including the statements of investments and
securities sold short, as of April 30, 1995, and the related statements of
operations and changes in net assets and financial highlights for the six
month period ended April 30, 1995. These financial statements and financial
highlights are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
October 31, 1994 and financial highlights for each of the five years in the
period ended October 31, 1994 and in our report dated December 14, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP Signature Logo)
New York, New York
June 6, 1995
PREMIER 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- (a) for (i)the period from
October 1, 1986 (commencement of operations) to October 31,
1986, (ii)each of the eight years in the period ended
October 31, 1994 and (iii)the six month period ended April
30, 1995 (unaudited) for Class A shares; and (b) for (i)the
period from January 15, 1993 to October 31, 1993, (ii)the
one year ended October 31, 1994 and (iii)the six month
period ended April 30, 1995 (unaudited) for Class B shares.
Included in Part B of the Registration Statement:
Statement of Investments--October 31, 1994 and April
30, 1995 (unaudited).
Statement of Financial Futures--October 31, 1994.
Statement of Securities Sold Short--October 31, 1994
and April 30, 1995 (unaudited).
Statement of Assets and Liabilities--October 31, 1994
and April 30, 1995 (unaudited).
Statement of Operations--Year ended October 31, 1994
and for the six month period ended April 30, 1995
(unaudited).
Statement of Changes in Net Assets--for each of the two
years ended October 31, 1994 and for the six month
period ended April 30, 1995 (unaudited).
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)(a) 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.
(b) Articles of Amendment.
(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 is incorporated by reference to Exhibit (5)
of Post-Effective Amendment No. 14 to the Registration Statement
on Form N-1A, filed on December 30, 1994.
(6) Distribution Agreement is incorporated by reference to Exhibit
(6) of Post-Effective Amendment No. 14 to the Registration
Statement on Form N-1A, filed on December 30, 1994.
(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) Revised Shareholder Services Plan.
(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.
(15) Revised Distribution Plan.
(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.
(17) Financial Data Schedule.
(18) Rule 18f-3 Plan.
Other Exhibits
(a) Power of Attorney. Other Powers of Attorney are
incorporated by reference to "Other Exhibits (a)" of
Post-Effective Amendments Nos. 4, 8, 11, 13 and 14.
(b) Certificate of Secretary is incorporated by reference
to"Other Exhibits (b)" of Post-Effective Amendment
Nos. 4, 13 and 14.
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 August 15, 1995
Shares of Beneficial Interest
Par value $.001 Class A=13,636
Class B= 3,444
Item 27. Indemnification
The Statement as to the general effect of any contract,
arrangements or statute under which a trustee, 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.**
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund
JULIAN M. SMERLING None
Director
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;
DAVID B. TRUMAN Former Director:
(cont'd) 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 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 Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York;
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of the Board 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
ROBERT E. RILEY Director:
President, Chief Dreyfus Service Corporation*;
Operating Officer, Former Executive Vice President:
and a Director Prudential Investment Corporation
751 Board Street
Newark, New Jersey 07102
STEPHEN E. CANTER Former Chairman and Chief Executive Officer:
Vice Chairman and Kleinwort Benson Investment Management
Chief Investment Officer, Americas Inc.*;
and a Director
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Director:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++'
Dreyfus Service Corporation*;
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.
Executive Vice President
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company+++;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
The Dreyfus Security Savings Bank F.S.B.+;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization*;
The Truepenny Corporation*;
PHILIP L. TOIA Formerly, Senior Vice President:
(cont'd) The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
BARBARA E. CASEY President:
Vice President- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108;
DIANE M. COFFEY None
Vice President-
Corporate Communications
ELIE M. GENADRY President:
Vice President- Institutional Services Division of Dreyfus
Institutional Sales 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++;
HENRY D. GOTTMANN Executive Vice President:
Vice President-Retail Dreyfus Service Corporation*;
Sales and Service Vice President:
Dreyfus Precious Metals*;
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*;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
DANIEL C. MACLEAN Secretary:
(cont'd) Seven Six Seven Agency, Inc.*;
JEFFREY N. NACHMAN None
Vice President-Mutual Fund
Accounting
WILLIAM F. GLAVIN, JR. Senior Vice President:
Vice President-Corporate The Boston Company Advisors, Inc.
Development 53 State Street
Exchange Place
Boston, Massachusetts 02109
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
MARK N. JACOBS Vice President, Secretary and Director:
Vice President-Fund Lion Management, Inc.*;
Legal and Compliance, Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation
Services One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
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 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
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
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 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.
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, Inc.
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 GNMA Fund, Inc.
26) Dreyfus Government Cash Management
27) Dreyfus Growth and Income Fund, Inc.
28) Dreyfus Growth Opportunity Fund, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Equity Fund, Inc.
34) Dreyfus Investors GNMA Fund
35) The Dreyfus/Laurel Funds, Inc.
36) The Dreyfus/Laurel Funds Trust
37) The Dreyfus/Laurel Tax-Free Municipal Funds
38) The Dreyfus/Laurel Investment Series
39) The Dreyfus Leverage Fund, Inc.
40) Dreyfus Life and Annuity Index Fund, Inc.
41) Dreyfus LifeTime Portfolios, Inc.
42) Dreyfus Liquid Assets, Inc.
43) Dreyfus Massachusetts Intermediate Municipal Bond Fund
44) Dreyfus Massachusetts Municipal Money Market Fund
45) Dreyfus Massachusetts Tax Exempt Bond Fund
46) Dreyfus Michigan Municipal Money Market Fund, Inc.
47) Dreyfus Money Market Instruments, Inc.
48) Dreyfus Municipal Bond Fund, Inc.
49) Dreyfus Municipal Cash Management Plus
50) Dreyfus Municipal Money Market Fund, Inc.
51) Dreyfus New Jersey Intermediate Municipal Bond Fund
52) Dreyfus New Jersey Municipal Bond Fund, Inc.
53) Dreyfus New Jersey Municipal Money Market Fund, Inc.
54) Dreyfus New Leaders Fund, Inc.
55) Dreyfus New York Insured Tax Exempt Bond Fund
56) Dreyfus New York Municipal Cash Management
57) Dreyfus New York Tax Exempt Bond Fund, Inc.
58) Dreyfus New York Tax Exempt Intermediate Bond Fund
59) Dreyfus New York Tax Exempt Money Market Fund
60) Dreyfus Ohio Municipal Money Market Fund, Inc.
61) Dreyfus 100% U.S. Treasury Intermediate Term Fund
62) Dreyfus 100% U.S. Treasury Long Term Fund
63) Dreyfus 100% U.S. Treasury Money Market Fund
64) Dreyfus 100% U.S. Treasury Short Term Fund
65) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
66) Dreyfus Pennsylvania Municipal Money Market Fund
67) Dreyfus Short-Intermediate Government Fund
68) Dreyfus Short-Intermediate Municipal Bond Fund
69) Dreyfus Short-Term Income Fund, Inc.
70) The Dreyfus Socially Responsible Growth Fund, Inc.
71) Dreyfus Strategic Growth, L.P.
72) Dreyfus Strategic Income
73) Dreyfus Strategic Investing
74) Dreyfus Tax Exempt Cash Management
75) The Dreyfus Third Century Fund, Inc.
76) Dreyfus Treasury Cash Management
77) Dreyfus Treasury Prime Cash Management
78) Dreyfus Variable Investment Fund
79) Dreyfus-Wilshire Target Funds, Inc.
80) Dreyfus Worldwide Dollar Money Market Fund, Inc.
81) General California Municipal Bond Fund, Inc.
82) General California Municipal Money Market Fund
83) General Government Securities Money Market Fund, Inc.
84) General Money Market Fund, Inc.
85) General Municipal Bond Fund, Inc.
86) General Municipal Money Market Fund, Inc.
87) General New York Municipal Bond Fund, Inc.
88) General New York Municipal Money Market Fund
89) Pacifica Funds Trust -
Pacific American Money Market Portfolio
Pacific American U.S. Treasury Portfolio
90) Peoples Index Fund, Inc.
91) Peoples S&P MidCap Index Fund, Inc.
92) Premier Insured Municipal Bond Fund
93) Premier California Municipal Bond Fund
94) Premier Global Investing, Inc.
95) Premier GNMA Fund
96) Premier Growth Fund, Inc.
97) Premier Municipal Bond Fund
98) Premier New York Municipal Bond Fund
99) 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, Chief President and
Operating Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Assistant
and Chief Financial Officer Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk 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
Lynn H. Johnson+ Vice President None
Ruth D. Leibert++ Assistant Vice President Assistant
Secretary
Paul Prescott+ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer Assistant
Treasurer
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
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
90 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 the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
---------------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and 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 August, 1995.
PREMIER STRATEGIC INVESTING
BY: /s/Marie E. Connolly*
____________________________
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
________________________ ____________________________ _________
/s/Marie E. Connolly* President (Principal Executive 8/29/95
______________________________ Officer)
Marie E. Connolly
/s/Joseph F. Tower* Assistant Treasurer (Principal 8/29/95
______________________________ Accounting and Financial
Officer)
Joseph F. Tower
/s/David W. Burke* Trustee 8/29/95
______________________________
David W. Burke
/s/Joseph S. DiMartino* Trustee 8/29/95
______________________________
Joseph S. DiMartino
/s/Diane Dunst* Trustee 8/29/95
______________________________
Diane Dunst
/s/Rosalind Gersten Jacobs* Trustee 8/29/95
______________________________
Rosalind Gersten Jacobs
/s/Jay I. Meltzer* Trustee 8/29/95
______________________________
Jay I. Meltzer
/s/Daniel Rose* Trustee 8/29/95
______________________________
Daniel Rose
/s/Warren B. Rudman* Trustee 8/29/95
______________________________
Warren B. Rudman
/s/Sander Vanocur* Trustee 8/29/95
______________________________
Sander Vanocur
*BY: __________________________
Eric B. Fischman,
Attorney-in-Fact
INDEX OF EXHIBITS
(1)(b) Articles of Amendment
(9) Revised Shareholder Services Plan
(11) Consent of Independent Auditors
(15) Revised Distribution Plan
(17) Financial Data Schedule
(18) Rule 18f-3 Plan
Other Exhibits:
(a) Powers of Attorney
(b) Certificate of Secretary
Exhibit (1)(b)
DREYFUS STRATEGIC INVESTING
ARTICLES OF AMENDMENT
Dreyfus Strategic Investing, a business trust
formed by an Agreement and Declaration of Trust dated July
24, 1985 (as amended and restated on July 24, 1992)
pursuant to the laws of The Commonwealth of Massachusetts
(the "Trust"), hereby certifies to the Secretary of State
of The Commonwealth of Massachusetts that:
FIRST: The Agreement and Declaration of Trust of
the Trust is hereby amended by striking out Article I,
Section 1 and inserting in lieu thereof the following:
"Section 1. Name. This Trust shall be
known as 'Premier Strategic
Investing.'"
SECOND: The amendment to the Agreement and
Declaration of Trust herein made was duly approved at a
meeting of the Trustees of the Trust on July 19, 1995
pursuant to Article IX, Section 8 of the Agreement and
Declaration of Trust.
IN WITNESS WHEREOF, Dreyfus Strategic Investing
has caused these Articles to be filed in its name and on
its behalf by its Trustees.
DREYFUS STRATEGIC INVESTING
By:/s/David W. Burke
David W. Burke, Trustee
By:/s/Joseph S. DiMartino
Joseph S. DiMartino, Trustee
By:/s/Diane Dunst
Diane Dunst, Trustee
By:/s/Rosalind Gersten Jacobs
Rosalind Gersten Jacobs, Trustee
By:/s/Jay I. Meltzer
Jay I. Meltzer, Trustee
By:/s/Daniel Rose
Daniel Rose, Trustee
By:/s/Warren B. Rudman
Warren B. Rudman, Trustee
By:/s/Sander Vanocur
Sander Vanocur, Trustee
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 19th day of July 1995, before me
personally appeared the above-named Trustees of the Trust,
to me known, and known to me to be the persons described in
and who executed the foregoing instrument, and who duly
acknowledged to me that such Trustees had executed the
same.
Notary Public
Exhibit (9)
PREMIER 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: November 18, 1992
As Revised: August 9, 1995
EXHIBIT A
Fee as a Percentage of
Name of Class Average Daily Net Assets
Class A .25%
Class B .25%
Class C .25%
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 Premier Strategic Investing (formerly Dreyfus Strategic Investing).
ERNST & YOUNG LLP
New York, New York
August 28, 1995
Exhibit (15)
PREMIER STRATEGIC INVESTING
DISTRIBUTION PLAN
Introduction: It has been proposed that the
above-captioned investment company (the "Fund") adopt a
Distribution Plan (the "Plan") in accordance with Rule 12b-
1, promulgated under the Investment Company Act of 1940, as
amended (the "Act"). The Plan would pertain to each class
set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Class"). Under the
Plan, the Fund would pay the Fund's distributor (the
"Distributor") for distributing shares of each Class. 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 each Class 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 shareholders of each Class.
The Plan: The material aspects of this Plan are
as follows:
1. The Fund shall pay to the Distributor for
distribution a fee in respect of each Class at the annual
rate set forth on Exhibit A.
2. For the purposes of determining the fees
payable under this Plan, the value of the Fund's net assets
attributable to each Class 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. As to each Class, this Plan will become
effective upon approval by (a) holders of a majority of the
outstanding shares of such Class, 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. As to each Class, this Plan may be amended at
any time by the Fund's Board, provided that (a) any
amendment to increase materially the costs which such Class
may bear pursuant to this Plan shall be effective only upon
approval by a vote of the holders of a majority of the
outstanding shares of such Class, 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. As to each Class, 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
outstanding shares of such Class.
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 Class, as
the case may be, and shall not be binding upon any Board
member, officer or shareholder of the Fund individually.
Dated: May 27, 1994
Revised: August 9, 1995 EXHIBIT A
Fee as a Percentage
of
Name of Class Average Daily Net
Assets
Class B .75%
Class C .75%
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000794280
<NAME> DREYFUS STRATEGIC INVESTING
<SERIES>
<NUMBER> 01
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 250556
<INVESTMENTS-AT-VALUE> 265229
<RECEIVABLES> 36156
<ASSETS-OTHER> 367
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 301752
<PAYABLE-FOR-SECURITIES> 37905
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7152
<TOTAL-LIABILITIES> 45057
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 240711
<SHARES-COMMON-STOCK> 10905
<SHARES-COMMON-PRIOR> 12071
<ACCUMULATED-NII-CURRENT> 522
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1212
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14250
<NET-ASSETS> 215137
<DIVIDEND-INCOME> 1379
<INTEREST-INCOME> 3021
<OTHER-INCOME> 0
<EXPENSES-NET> 1855
<NET-INVESTMENT-INCOME> 2545
<REALIZED-GAINS-CURRENT> (205)
<APPREC-INCREASE-CURRENT> 3765
<NET-CHANGE-FROM-OPS> 6105
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 596
<DISTRIBUTIONS-OF-GAINS> 6469
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 669
<NUMBER-OF-SHARES-REDEEMED> 2192
<SHARES-REINVESTED> 357
<NET-CHANGE-IN-ASSETS> (23576)
<ACCUMULATED-NII-PRIOR> (1375)
<ACCUMULATED-GAINS-PRIOR> 9023
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 975
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1855
<AVERAGE-NET-ASSETS> 222035
<PER-SHARE-NAV-BEGIN> 19.83
<PER-SHARE-NII> .20
<PER-SHARE-GAIN-APPREC> .29
<PER-SHARE-DIVIDEND> .05
<PER-SHARE-DISTRIBUTIONS> .54
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.73
<EXPENSE-RATIO> .006
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000794280
<NAME> DREYFUS STRATEGIC INVESTING
<SERIES>
<NUMBER> 02
<NAME> CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 250556
<INVESTMENTS-AT-VALUE> 265229
<RECEIVABLES> 36156
<ASSETS-OTHER> 367
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 301752
<PAYABLE-FOR-SECURITIES> 37905
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7152
<TOTAL-LIABILITIES> 45057
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 240711
<SHARES-COMMON-STOCK> 2140
<SHARES-COMMON-PRIOR> 2088
<ACCUMULATED-NII-CURRENT> 522
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1212
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14250
<NET-ASSETS> 41558
<DIVIDEND-INCOME> 1379
<INTEREST-INCOME> 3021
<OTHER-INCOME> 0
<EXPENSES-NET> 1855
<NET-INVESTMENT-INCOME> 2545
<REALIZED-GAINS-CURRENT> (205)
<APPREC-INCREASE-CURRENT> 3765
<NET-CHANGE-FROM-OPS> 6105
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 52
<DISTRIBUTIONS-OF-GAINS> 1137
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 153
<NUMBER-OF-SHARES-REDEEMED> 163
<SHARES-REINVESTED> 63
<NET-CHANGE-IN-ASSETS> (23576)
<ACCUMULATED-NII-PRIOR> (1375)
<ACCUMULATED-GAINS-PRIOR> 9023
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 975
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1855
<AVERAGE-NET-ASSETS> 222035
<PER-SHARE-NAV-BEGIN> 19.58
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> .28
<PER-SHARE-DIVIDEND> .03
<PER-SHARE-DISTRIBUTIONS> .54
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.42
<EXPENSE-RATIO> .010
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Exhibit (18)
THE DREYFUS FAMILY OF FUNDS
(Premier Family of Equity Funds)
Rule 18f-3 Plan
Rule 18f-3 under the Investment Company Act of
1940, as amended (the "1940 Act"), requires that the Board
of an investment company desiring to offer multiple classes
pursuant to said Rule adopt a plan setting forth the
separate arrangement and expense allocation of each class,
and any related conversion features or exchange privileges.
The Board, including a majority of the non-
interested Board members, of each of the investment
companies, or series thereof, listed on Schedule A attached
hereto (each, a "Fund") which desires to offer multiple
classes has determined that the following plan is in the
best interests of each class individually and each Fund as
a whole:
1. Class Designation: Fund shares shall be
divided into Class A, Class B, Class C and Class R.
2. Differences in Services: The services
offered to shareholders of each Class shall be
substantially the same, except that Right of Accumulation,
Letter of Intent and Reinvestment Privilege shall be
available only to holders of Class A shares.
3. Differences in Distribution Arrangements:
Class A shares shall be offered with a front-end sales
charge, as such term is defined in Article III, Section
26(b), of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and a deferred
sales charge (a "CDSC"), as such term is defined in said
Section 26(b), may be assessed on certain redemptions of
Class A shares purchased without an initial sales charge as
part of an investment of $1 million or more. The amount of
the sales charge and the amount of and provisions relating
to the CDSC pertaining to the Class A shares are set forth
on Schedule B hereto.
Class B shares shall not be subject to a front-
end sales charge, but shall be subject to a CDSC and shall
be charged an annual distribution fee under a Distribution
Plan adopted pursuant to Rule 12b-1 under the 1940 Act.
The amount of and provisions relating to the CDSC, and the
amount of the fees under the Distribution Plan pertaining
to the Class B shares, are set forth on Schedule C hereto.
Class C shares shall not be subject to a front-
end sales charge, but shall be subject to a CDSC and shall
be charged an annual distribution fee under a Distribution
Plan adopted pursuant to Rule 12b-1 under the 1940 Act.
The amount of and provisions relating to the CDSC, and the
amount of the fees under the Distribution Plan pertaining
to the Class C shares, are set forth on Schedule D hereto.
Class R shares shall be offered at net asset
value only to institutional investors acting for themselves
or in a fiduciary, advisory, agency, custodial or similar
capacity for qualified or non-qualified employee benefit
plans, including pension, profit-sharing, SEP-IRAs and
other deferred compensation plans, whether established by
corporations, partnerships, non-profit entities or state
and local governments, but not including IRAs or IRA
"Rollover Accounts."
Class A, Class B and Class C shares shall be
subject to an annual service fee at the rate of .25% of the
value of the average daily net assets of such Class
pursuant to a Shareholder Services Plan.
4. Expense Allocation. The following expenses
shall be allocated, to the extent practicable, on a Class-
by-Class basis: (a) fees under the Distribution Plan and
Shareholder Services Plan; (b) printing and postage
expenses related to preparing and distributing materials,
such as shareholder reports, prospectuses and proxies, to
current shareholders of a specific Class; (c) Securities
and Exchange Commission and Blue Sky registration fees
incurred by a specific Class; (d) the expense of
administrative personnel and services as required to
support the shareholders of a specific Class; (e)
litigation or other legal expenses relating solely to a
specific Class; (f) transfer agent fees identified by the
Fund's transfer agent as being attributable to a specific
Class; and (g) Board members' fees incurred as a result of
issues relating to a specific Class.
5. Conversion Features. Class B shares shall
automatically convert to Class A shares after a specified
period of time after the date of purchase, based on the
relative net asset value of each such Class without the
imposition of any sales charge, fee or other charge, as set
forth on Schedule E hereto. No other Class shall be
subject to any automatic conversion feature.
6. Exchange Privileges. Shares of a Class
shall be exchangeable only for (a) shares of the same Class
of other investment companies managed or administered by
The Dreyfus Corporation and (b) shares of certain other
investment companies specified from time to time.
SCHEDULE A
Name of Fund Date Plan Adopted
Premier Growth Fund, Inc. April 12, 1995
(Revised September
27,
1995)
Premier Global Investing, Inc. April 24, 1995
(Revised July 17,
1995)
Premier Strategic Investing July 19, 1995
Dreyfus Capital Value Fund August 7, 1995
(A Premier Fund)
SCHEDULE B
Front-End Sales Charge--Class A Shares--The public offering
price for Class A shares shall be the net asset value per
share of that Class plus a sales load as shown below:
Total Sales Load Amount of Transaction As a % of
offering
price per
share As a % of
net asset
value per
share Less than $50,000. . . . . . 4.50 4.70 $50,000 to
less than $100,000 4.00 4.20 $100,000 to less than $250,000
3.00 3.10 $250,000 to less than $500,000 2.50 2.60 $500,000
to less than $1,000,000 2.00 2.00 $1,000,000 or more -0- -0-
Contingent Deferred Sales Charge--Class A Shares--A CDSC of
1% shall be assessed at the time of redemption of Class A
shares purchased without an initial sales charge as part of
an investment of at least $1,000,000 and redeemed within
two years after purchase. The terms contained in Schedule
C pertaining to the CDSC assessed on redemptions of Class B
shares (other than the amount of the CDSC and its time
periods), including the provisions for waiving the CDSC,
shall be applicable to the Class A shares subject to a
CDSC. Letter of Intent and Right of Accumulation shall
apply to such purchases of Class A shares.
SCHEDULE C
Contingent Deferred Sales Charge--Class B Shares--A CDSC
payable to the Fund's Distributor shall be imposed on any
redemption of Class B shares which reduces the current net
asset value of such Class B shares to an amount which is
lower than the dollar amount of all payments by the
redeeming shareholder for the purchase of Class B shares of
the Fund held by such shareholder at the time of
redemption. No CDSC shall 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 the shareholder's Class B shares above the dollar amount
of all payments for the purchase of Class B shares of the
Fund held by such shareholder 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 shall depend on the number of years
from the time the shareholder 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 shall 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:
Year Since
Purchase Payment
Was Made CDSC as a % of
Amount 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 shall be made in a manner that
results in the lowest possible rate. Therefore, it shall
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.
Waiver of CDSC--The CDSC shall 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 Internal
Revenue Code of 1986, as amended (the "Code"), of the
shareholder, (b) redemptions by 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 Fund's Distributor exceeds
one million dollars, (c) redemptions as a result of a
combination of any investment company with the Fund by
merger, acquisition of assets or otherwise, and (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. Any Fund shares subject to a
CDSC which were purchased prior to the termination of such
waiver shall have the CDSC waived as provided in the Fund's
prospectus at the time of the purchase of such shares.
Amount of Distribution Plan Fees--Class B Shares--.75 of 1%
of the value of the average daily net assets of Class B.
SCHEDULE D
Contingent Deferred Sales Charge--Class C Shares--A CDSC of
1.00% payable to the Fund's Distributor shall be imposed on
any redemption of Class C shares within one year of the
date of purchase. The basis for calculating the payment of
any such CDSC shall be the method used in calculating the
CDSC for Class B shares. In addition, the provisions for
waiving the CDSC shall be those set forth for Class B
shares.
Amount of Distribution Plan Fees--Class C Shares--.75 of 1%
of the value of the average daily net assets of Class C.
SCHEDULE E
Conversion of Class B Shares--Approximately six years after
the date of purchase, Class B shares automatically shall
convert to Class A shares, based on the relative net asset
values for shares of each such Class, and shall no longer
be subject to the distribution fee. At that time, Class B
shares that have been acquired through the reinvestment of
dividends and distributions ("Dividend Shares") shall be
converted in the proportion that a shareholder's Class B
shares (other than Dividend Shares) converting to Class A
shares bears to the total Class B shares then held by the
shareholder which were not acquired through the
reinvestment of dividends and distributions.
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.
Joseph F. Tower, III
Assistant Treasurer
DATED: August 22, 1995
SCHEDULE A
GROUP II
Dreyfus A Bonds Plus, Inc.
Dreyfus Balanced Fund, Inc.
Dreyfus Capital Growth Fund (A Premier Fund)
Dreyfus Global Bond Fund, Inc.
Dreyfus Growth and Income Fund, Inc.
Dreyfus Growth Opportunity Fund, Inc.
Dreyfus Institutional Money Market Fund
Dreyfus International Equity Fund, Inc.
Dreyfus International Recovery Fund, Inc.
Dreyfus Money Market Instruments, Inc.
Dreyfus Variable Investment Fund
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 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 August 28, 1995.
Eric B. Fischman
Assistant Secretary
(SEAL)
