Dreyfus Premier Value Fund
Investing in value stocks for capital growth
PROSPECTUS March 1, 2000
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
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The Fund
Dreyfus Premier Value Fund
---------------------------------
Ticker Symbols: CLASS A: DRSIX
CLASS B: DSTBX
CLASS C: DPVCX
CLASS R: DPVRX
CLASS T: N/A
Contents
The Fund
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Goal/Approach INSIDE COVER
Main Risks 1
Past Performance 2
Expenses 3
Management 4
Financial Highlights 5
Your Investment
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Account Policies 7
Distributions and Taxes 10
Services for Fund Investors 11
Instructions for Regular Accounts 12
Instructions for IRAs 13
For More Information
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INFORMATION ON THE FUND'S RECENT STRATEGIES AND HOLDINGS CAN BE FOUND IN THE
CURRENT ANNUAL/SEMIANNUAL REPORT. SEE BACK COVER.
GOAL/APPROACH
The fund seeks capital growth. To pursue this goal, it invests primarily in
stocks of larger, more-established companies that the fund's manager believes
are "undervalued," but the fund can invest in companies of any size. The fund's
stock investments may include common stocks, preferred stocks and convertible
securities of both U.S. and foreign issuers. The fund expects to invest mainly
in the stocks of U.S. issuers, but may invest up to 30% of its assets in foreign
stocks.
In choosing stocks, the portfolio manager looks for value companies that provide
opportunities for capital growth. The manager uses proprietary computer models
to identify stocks that appear favorably priced and that may benefit from the
current market and economic environment. The manager then reviews these stocks
for factors that could signal a rise in price, such as:
* new products or markets
* opportunities for greater market share
* more effective management
* positive changes in corporate structure or market perception
* potential for improved earnings
The fund typically sells a stock when it is no longer considered a value
company, appears less likely to benefit from the current market and economic
environment, shows deteriorating fundamentals or falls short of the manager's
expectations.
The fund also may invest in bonds that offer opportunities for capital growth.
These bonds may be investment grade or below investment grade in quality, but in
any case must be, at the time of purchase, rated no lower than CCC/Caa or be the
unrated equivalent as determined by Dreyfus.
Concepts to understand
VALUE COMPANIES: companies that appear underpriced according to certain
financial measurements of their intrinsic worth or business prospects (such as
price-to-earnings or price-to-book ratios). Because a stock can remain
undervalued for years, value investors often look for factors that could trigger
a rise in price.
<PAGE>
MAIN RISKS
While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the fund will go up
and down, which means that you could lose money.
Value stocks involve the risk that they may never reach what the manager
believes is their full market value, either because the market fails to
recognize the stock's intrinsic worth or the manager misgauged that worth. They
also may decline in price, even though in theory they are already underpriced.
Because different types of stocks tend to shift in and out of favor depending on
market and economic conditions, the fund's performance may sometimes be lower or
higher than that of other types of funds (such as those emphasizing growth
stocks, or a mix of growth and value stocks).
Investments in midsize companies carry additional risks because their earnings
tend to be less predictable, their share prices more volatile and their
securities less liquid than larger, more established companies.
At times, the fund may maintain relatively large positions in certain stocks,
and own fewer total stocks than other value funds. In times of market
volatility, this could make the fund's share price more volatile than other
value funds.
Foreign securities involve special risks such as changes in currency exchange
rates, lack of comprehensive company information, political instability, and
less liquidity.
Under adverse market conditions, the fund could invest some or all of its assets
in money market securities. Although the fund would do this to avoid losses, it
could have the effect of reducing the benefit from any upswing in the market.
During such periods, the fund may not achieve its investment objective.
Other potential risks
The fund may, at times, invest some assets in derivative securities, such as
options and futures, and in foreign currencies. It may also sell short, which
involves selling a security it does not own in anticipation that the security's
price will go down. When employed, these practices are used primarily to hedge
the fund's portfolio but may be used to increase returns; however, such
practices sometimes may reduce returns or increase volatility. Derivatives can
be illiquid and highly sensitive to changes in their underlying instrument. A
small investment in certain derivatives could have a potentially large impact on
the fund's performance.
At times, the fund may engage in short-term trading, which could produce higher
brokerage costs and taxable distributions. The fund can buy securities with
borrowed money (a form of leverage), which could have the effect of magnifying
the fund's gains or losses.
The Fund 1
<PAGE 1>
PAST PERFORMANCE
The tables at right show some of the risks of investing in the fund. The first
table shows the changes in Class A performance from year to year. These
performance figures do not reflect sales loads, and would be lower if they did.
The second table compares the fund's Class A, B, C and R performance over time
to that of the fund's current benchmark index, the Russell 1000 Value Index, a
broad-based index measuring the performance of those companies in the Russell
1000 Index with lower price-to-book ratios and lower forecasted growth values,
and the Wilshire Large Company Value Index, the fund's prior benchmark index.
These returns include applicable sales loads. Both tables assume the
reinvestment of dividends. Of course, past performance is no guarantee of future
results. Since Class T shares are new, past performance information for a full
calendar year is not available for that class as of the date of this prospectus.
Performance for Class T shares will vary from the performance of the fund's
other share classes due to differences in expenses.
Year-by-year total return AS OF 12/31 EACH YEAR (%)
CLASS A SHARES
0.66 41.31 -5.23 16.71 -11.36 23.70 18.09 16.37 11.07 7.57
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q4 '98 +16.65%
WORST QUARTER: Q3 '98 -12.05%
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<TABLE>
<CAPTION>
Average annual total return AS OF 12/31/99
Since
Inception date 1 Year 5 Years 10 Years inception
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<S> <C> <C> <C> <C> <C>
CLASS A (10/16/86) 1.40% 13.87% 10.31% --
CLASS B (1/15/93) 2.84% 14.11% -- 10.12%
CLASS C (9/1/95) 5.66% -- -- 13.12%
CLASS R (9/1/95) 7.26% -- -- 13.76%
RUSSELL 1000
VALUE INDEX 7.35% 23.07% -- 20.66%*
WILSHIRE LARGE COMPANY
VALUE INDEX 7.11% 18.33% 12.83% 14.88%*
</TABLE>
* FOR COMPARATIVE PURPOSES, THE VALUE OF EACH INDEX ON 8/31/95 IS USED AS THE
BEGINNING VALUE.
IN 1999, THE FUND CHANGED ITS BENCHMARK FROM THE WILSHIRE LARGE COMPANY VALUE
INDEX TO THE RUSSELL 1000 VALUE INDEX, BECAUSE THE PORTFOLIO MANAGER PREFERS
THE INFORMATION MADE AVAILABLE BY RUSSELL IN MANAGING THE FUND. PERFORMANCE
FOR THE WILSHIRE INDEX WILL NOT BE SHOWN IN THE FUTURE.
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
2
<PAGE 2>
<TABLE>
<CAPTION>
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the table below.
Fee table
CLASS A CLASS B CLASS C CLASS R CLASS T
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SHAREHOLDER TRANSACTION FEES (FEES PAID FROM YOUR ACCOUNT)
Maximum front-end sales charge on purchases
<S> <C> <C> <C> <C> <C>
AS A % OF OFFERING PRICE 5.75 NONE NONE NONE 4.50
Maximum contingent deferred sales charge (CDSC)
AS A % OF PURCHASE OR SALE PRICE, WHICHEVER IS LESS NONE* 4.00 1.00 NONE NONE*
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ANNUAL FUND OPERATING EXPENSES (EXPENSES PAID FROM FUND ASSETS)
% OF AVERAGE DAILY NET ASSETS
Management fees .75 .75 .75 .75 .75
Rule 12b-1 fee NONE .75 .75 NONE .25
Shareholder services fee .25 .25 .25 NONE .25
Other expenses .18 .19 .21 .65 .25
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TOTAL 1.18 1.94 1.96 1.40 1.50
* SHARES BOUGHT WITHOUT AN INITIAL SALES CHARGE AS PART OF AN INVESTMENT OF $1
MILLION OR MORE MAY BE CHARGED A CDSC OF 1.00% IF REDEEMED WITHIN ONE YEAR.
</TABLE>
<TABLE>
<CAPTION>
Expense example
1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
CLASS A $688 $928 $1,187 $1,924
CLASS B
WITH REDEMPTION $597 $909 $1,247 $1,886**
WITHOUT REDEMPTION $197 $609 $1,047 $1,886**
CLASS C
WITH REDEMPTION $299 $615 $1,057 $2,285
WITHOUT REDEMPTION $199 $615 $1,057 $2,285
CLASS R $143 $443 $766 $1,680
CLASS T $596 $903 $1,232 $2,160
</TABLE>
** ASSUMES CONVERSION OF CLASS B TO CLASS A AT END OF THE SIXTH YEAR FOLLOWING
THE DATE OF PURCHASE.
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. Because actual
return and expenses will be different, the example is for comparison only.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of its operation.
RULE 12B-1 FEE: the fee paid to the fund's distributor to finance the sale and
distribution of Class B, Class C and Class T shares. Because this fee is paid
out of the fund's assets on an ongoing basis, over time it will increase the
cost of your investment and may cost you more than paying other types of sales
charges.
SHAREHOLDER SERVICES FEE: a fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees. Because Class T shares were
not offered to the public during the fiscal year ended October 31, 1999, these
fees for Class T shares, and total fund operating expenses for Class T shares,
are based on an estimated amounts.
The Fund 3
<PAGE 3>
MANAGEMENT
The investment adviser for the fund is The Dreyfus Corporation, 200 Park Avenue,
New York, New York 10166. Founded in 1947, Dreyfus manages more than $127
billion in over 160 mutual fund portfolios. For the past fiscal year, the fund
paid Dreyfus a management fee at the annual rate of 0.75% of the fund's average
daily net assets. Dreyfus is the primary mutual fund business of Mellon
Financial Corporation, a global financial services company with approximately
$2.5 trillion of assets under management, administration or custody, including
approximately $450 billion under management. Mellon provides wealth management,
global investment services and a comprehensive array of banking services for
individuals, businesses and institutions. Mellon is headquartered in Pittsburgh,
Pennsylvania.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, Dreyfus
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
with a distinct, stable identity.
The fund's primary portfolio manager is Timothy M. Ghriskey. Mr. Ghriskey, CFA,
senior portfolio manager and head of value equities at Dreyfus, has managed the
fund since August 1995. He joined Dreyfus in July 1995 after ten years as an
analyst and money manager for Loomis Sayles & Co., and today manages several
other funds at Dreyfus.
Dreyfus has a personal securities trading policy (the "Policy") which restricts
the personal securities transactions of its employees. Its primary purpose is to
ensure that personal trading by Dreyfus employees does not disadvantage any
Dreyfus-managed fund. Dreyfus portfolio managers and other investment personnel
who comply with the Policy's preclearance and disclosure procedures may be
permitted to purchase, sell or hold certain types of securities which also may
be or are held in the fund(s) they advise.
Concepts to understand
YEAR 2000 ISSUES: the fund could be adversely affected if the computer systems
used by Dreyfus and the fund's other service providers do not properly process
and calculate date-related information from and after January 1, 2000. Dreyfus
has taken steps designed to avoid year 2000-related problems in its systems and
to monitor the readiness of other service providers.
In addition, issuers of securities in which the fund invests may be adversely
affected by year 2000-related problems. This could have an impact on the value
of the fund's investments and its share price.
4
<PAGE 4>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following tables describe the performance of each share class for the fiscal
periods indicated. "Total return" shows how much your investment in the fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been
independently audited by Ernst & Young LLP, whose report, along with the fund's
financial statements, is included in the annual report. No information is
provided for the fund's Class T shares, which were not offered to the public
during the fiscal year ended October 31, 1999.
YEAR ENDED OCTOBER 31,
CLASS A 1999 1998 1997 1996 1995
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PER-SHARE DATA ($)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 21.07 24.30 22.42 21.59 19.83
Investment operations: Investment income -- net .11(1) .13 .12 .22 .31
Net realized and unrealized gain on investments 2.50 .23 5.40 3.01 2.04
Total from investment operations 2.61 .36 5.52 3.23 2.35
Distributions: Dividends from investment income -- net (.11) (.11) (.20) (.31) (.05)
Dividends from net realized gain on investments (1.57) (3.48) (3.44) (2.09) (.54)
Total distributions (1.68) (3.59) (3.64) (2.40) (.59)
Net asset value, end of period 22.00 21.07 24.30 22.42 21.59
Total return (%)(2) 13.24 1.53 27.43 15.95 12.43
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RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.18 1.19 1.18 1.19 1.22
Ratio of interest expense, loan commitment fees
and dividends on securities sold short to average net assets (%) .00(3) .00(3) -- -- .05
Ratio of net investment income to average net assets (%) .51 .54 .51 .94 1.51
Portfolio turnover rate (%) 141.85 159.30 123.53 147.64 244.82
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Net assets, end of period ($ x 1,000) 171,526 178,593 206,333 207,388 208,786
(1) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.(
(2) EXCLUSIVE OF SALES CHARGE. (3) AMOUNT REPRESENTS LESS THAN .01%.
YEAR ENDED OCTOBER 31,
CLASS B 1999 1998 1997 1996 1995
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PER-SHARE DATA ($)
Net asset value, beginning of period 20.41 23.70 21.92 21.17 19.58
Investment operations: Investment income (loss) -- net (.05)(1) (.04) (.04) .04 .14
Net realized and unrealized gain on investments 2.42 .23 5.29 2.96 2.02
Total from investment operations 2.37 .19 5.25 3.00 2.16
Distributions: Dividends from investment income -- net -- -- (.03) (.16) (.03)
Dividends from net realized gain on investments (1.57) (3.48) (3.44) (2.09) (.54)
Total distributions (1.57) (3.48) (3.47) (2.25) (.57)
Net asset value, end of period 21.21 20.41 23.70 21.92 21.17
Total return (%)(2) 12.38 .75 26.55 15.05 11.50
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RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.94 1.95 1.93 1.94 1.97
Ratio of interest expense, loan commitment fees
and dividends on securities sold short to average net assets (%) .00(3) .00(3) -- -- .05
Ratio of net investment income (loss) to average net assets (%) (.25)(2) (.22) (.27) .19 .71
Portfolio turnover rate (%) 141.85 159.30 123.53 147.64 244.82
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Net assets, end of period ($ x 1,000) 26,897 47,512 52,847 44,152 44,365
(1) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.(
(2) EXCLUSIVE OF SALES CHARGE. (3 )AMOUNT REPRESENTS LESS THAN .01%.
The Fund 5
<PAGE 5>
FINANCIAL HIGHLIGHTS (CONTINUED)
YEAR ENDED OCTOBER 31,
CLASS C 1999 1998 1997 1996 1995(1)
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PER-SHARE DATA ($)
Net asset value, beginning of period 20.28 23.67 21.90 21.16 21.21
Investment operations: Investment income (loss) -- net (.06)(2) (.05) (.14)(2) .06 (.04)
Net realized and unrealized gain (loss)
on investments 2.41 .20 5.35 3.05 (.01)
Total from investment operations 2.35 .15 5.21 3.11 (.05)
Distributions: Dividends from investment income -- net -- (.06) -- (.28) --
Dividends from net realized gain on investments (1.57) (3.48) (3.44) (2.09) --
Total distributions (1.57) (3.54) (3.44) (2.37) --
Net asset value, end of period 21.06 20.28 23.67 21.90 21.16
Total return (%)(3) 12.25 .65 26.38 15.74 (.24)(4)
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RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.96 2.08 2.00 1.94 .36(4)
Ratio of net investment income (loss) to average net assets (%) (.29) (.35) (.56) (.51) (.18)(4)
Portfolio turnover rate (%) 141.85 159.30 123.53 147.64 244.82
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Net assets, end of period ($ x 1,000) 712 652 594 6 1
(1) FROM SEPTEMBER 1, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1995.
(2) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (3) EXCLUSIVE OF SALES CHARGE. (4) NOT ANNUALIZED.
YEAR ENDED OCTOBER 31,
CLASS R 1999 1998 1997 1996 1995(1)
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PER-SHARE DATA ($)
Net asset value, beginning of period 20.87 24.30 22.42 21.60 21.61
Investment operations: Investment income -- net .06(2) .21 .19 .40 --
Net realized and unrealized gain (loss)
on investments 2.47 (.01) 5.38 2.87 (.01)
Total from investment operations 2.53 .20 5.57 3.27 (.01)
Distributions: Dividends from investment income -- net (.13) (.15) (.25) (.36) --
Dividends from net realized gain
on investments (1.57) (3.48) (3.44) (2.09) --
Total distributions (1.70) (3.63) (3.69) (2.45) --
Net asset value, end of period 21.70 20.87 24.30 22.42 21.60
Total return (%) 12.99 .77 27.74 16.17 (.05)(3)
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RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.40 1.00 .94 .97 .17(3)
Ratio of net investment income (loss) to average net assets (%) .29 .51 .71 1.07 --
Portfolio turnover rate (%) 141.85 159.30 123.53 147.64 244.82
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Net assets, end of period ($ x 1,000) 8 6 5 4 1
(1) FROM SEPTEMBER 1, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO OCTOBER 31, 1995.
(2) BASED( ) ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END. (3) NOT ANNUALIZED.
</TABLE>
6
<PAGE 6>
Your Investment
ACCOUNT POLICIES
THE DREYFUS PREMIER FUNDS are designed primarily for people who are investing
through a third party, such as a bank, broker-dealer or financial adviser, or in
a 401(k) or other retirement plan. Third parties with whom you open a fund
account may impose policies, limitations and fees which are different from
those described here.
YOU WILL NEED TO CHOOSE A SHARE CLASS before making your initial investment. In
making your choice, you should weigh the impact of all potential costs over the
length of your investment, including sales charges and annual fees. For example,
in some cases, it can be more economical to pay an initial sales charge than to
choose a class with no initial sales charge but higher annual fees and a
contingent deferred sales charge (CDSC).
* CLASS A shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares, want to
take advantage of the reduced sales charges available on larger investments
and/or have a longer-term investment horizon
* CLASS B shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work immediately
and/or have a longer-term investment horizon
* CLASS C shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work immediately
and/or have a shorter-term investment horizon
* CLASS R shares are designed for eligible institu-
tions on behalf of their clients (individuals may not purchase these shares
directly)
* CLASS T shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares, want to
take advantage of the reduced sales charges available on larger investments and
have a shorter-term investment horizon
Your financial representative can help you choose the share class that is
appropriate for you.
Reduced Class A and Class T sales charge
LETTER OF INTENT: lets you purchase Class A and Class T shares over a 13-month
period and receive the same sales charge as if all shares had been purchased at
once.
RIGHT OF ACCUMULATION: lets you add the value of any shares you own in this
fund, any other Dreyfus Premier fund, or any fund advised by Founders Asset
Management LLC ("Founders"), an affiliate of Dreyfus, sold with a sales load, to
the amount of your next Class A or Class T investment for purposes of
calculating the sales charge.
CONSULT THE STATEMENT OF ADDITIONAL INFORMATION (SAI) OR YOUR FINANCIAL
REPRESENTATIVE FOR MORE DETAILS.
Your Investment 7
<PAGE 7>
ACCOUNT POLICIES (CONTINUED)
Share class charges
EACH SHARE CLASS has its own fee structure. In some cases, you may not have to
pay a sales charge to buy or sell shares. Consult your financial representative
or the SAI to see if this may apply to you. Shareholders owning Class A shares
on November 30, 1996, are eligible for lower sales loads. Because Class A has
lower expenses than Class T, if you invest $1 million or more in the fund you
should consider buying Class A shares.
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Sales charges
<TABLE>
<CAPTION>
CLASS A AND CLASS T -- CHARGED WHEN YOU BUY SHARES
Sales charge Sales charge
deducted as a % as a % of your
Your investment of offering price net investment
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Class Class Class Class
A T A T
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<S> <C> <C> <C> <C> <C>
Up to $49,999 5.75% 4.50% 6.10% 4.70%
$50,000 -- $99,999 4.50% 4.00% 4.70% 4.20%
$100,000 -- $249,999 3.50% 3.00% 3.60% 3.30%
$250,000 -- $499,999 2.50% 2.00% 2.60% 2.00%
$500,000 -- $999,999 2.00% 1.50% 2.00% 1.50%
$1 million or more* 0.00% 0.00% 0.00% 0.00%
* A 1.00% CDSC may be charged on any shares sold within
one year of purchase (except shares bought through
dividend reinvestment).
</TABLE>
Class T shares also carry an annual Rule 12b-1 fee of 0.25% of the class's
average daily net assets.
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CLASS B -- CHARGED WHEN YOU SELL SHARES
CDSC as a % of your initial
Years since purchase investment or your redemption
was made (whichever is less)
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Up to 2 years 4.00%
2 -- 4 years 3.00%
4 -- 5 years 2.00%
5 -- 6 years 1.00%
More than 6 years Shares will automatically
convert to Class A
Class B shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
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CLASS C -- CHARGED WHEN YOU SELL SHARES
A 1.00% CDSC is imposed on redemptions made within the first year of purchase.
Class C shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
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CLASS R -- NO SALES LOAD OR RULE 12B-1 FEES
Buying shares
THE NET ASSET VALUE (NAV) of each class is generally calculated as of the close
of trading on the New York Stock Exchange ("NYSE") (usually 4:00 p.m. Eastern
time) every day the exchange is open. Your order will be priced at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. 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 fund's board.
ORDERS TO BUY AND SELL SHARES received by dealers by the close of trading on the
NYSE and transmitted to the distributor or its designee by the close of its
business day (normally 5:15 p.m. Eastern time) will be based on the NAV
determined as of the close of trading on the NYSE that day.
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Minimum investments
Initial Additional
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REGULAR ACCOUNTS $1,000 $100; $500 FOR
TELETRANSFER INVESTMENTS
TRADITIONAL IRAS $750 NO MINIMUM
SPOUSAL IRAS $750 NO MINIMUM
ROTH IRAS $750 NO MINIMUM
EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR
DREYFUS AUTOMATIC $100 $100
INVESTMENT PLANS
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
Concepts to understand
NET ASSET VALUE (NAV): the market value of one share, computed by dividing the
total net assets of a fund or class by its shares outstanding. The fund's Class
A and Class T shares are offered to the public at NAV plus a sales charge.
Classes B, C and R are offered at NAV, but Classes B and C generally are subject
to higher annual operating expenses and a CDSC.
8
<PAGE 8>
Selling shares
YOU MAY SELL (REDEEM) SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
TO KEEP YOUR CDSC AS LOW AS POSSIBLE, each time you request to sell shares we
will first sell shares that are not subject to a CDSC, and then those subject to
the lowest charge. The CDSC is based on the lesser of the original purchase cost
or the current market value of the shares being sold, and is not charged on
shares you acquired by reinvesting your dividends. There are certain instances
when you may qualify to have the CDSC waived. Consult the SAI for details.
BEFORE SELLING RECENTLY PURCHASED SHARES, please note that if the fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to eight business days or until it has collected payment.
General policies
UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
THE FUND RESERVES THE RIGHT TO:
* refuse any purchase or exchange request that could adversely affect the
fund or its operations, including those from any individual or group who, in the
fund's view, is likely to engage in excessive trading (usually defined as more
than four exchanges out of the fund within a calendar year)
* refuse any purchase or exchange request in excess of 1% of the fund's
total assets
* change or discontinue its exchange privilege, or temporarily suspend
this privilege during unusual market conditions
* change its minimum investment amounts
* delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or during
unusual market conditions)
The fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
Written sell orders
Some circumstances require written sell orders along with signature guarantees.
These include:
* amounts of $10,000 or more on accounts whose address has been changed
within the last 30 days
* requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
Small account policies
To offset the relatively higher costs of servicing smaller accounts, the fund
charges regular accounts with balances below $2,000 an annual fee of $12. The
fee will be imposed during the fourth quarter of each calendar year.
The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; IRA accounts; accounts participating in
automatic investment programs; and accounts opened through a financial
institution.
If your account falls below $500, the fund may ask you to increase your balance.
If it is still below $500 after 30 days, the fund may close your account and
send you the proceeds.
Your Investment 9
<PAGE 9>
DISTRIBUTIONS AND TAXES
THE FUND GENERALLY PAYS ITS SHAREHOLDERS dividends from its net investment
income, and distributes any net capital gains it has realized, once a year.
Each share class will generate a different dividend because each has different
expenses. Your distributions will be reinvested in the fund unless you instruct
the fund otherwise. There are no fees or sales charges on reinvestments.
FUND DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE in the year received to most
investors (unless your investment is in an IRA or other tax-deferred account
where taxes may be deferred). The tax status of any distribution is the same
regardless of how long you have been in the fund and whether you reinvest your
distributions or take them in cash. In general, distributions are federally
taxable as follows:
- --------------------------------------------------------------------------------
Taxability of distributions
Type of Tax rate for Tax rate for
distribution 15% bracket 28% bracket or above
- --------------------------------------------------------------------------------
INCOME ORDINARY ORDINARY
DIVIDENDS INCOME RATE INCOME RATE
SHORT-TERM ORDINARY ORDINARY
CAPITAL GAINS INCOME RATE INCOME RATE
LONG-TERM
CAPITAL GAINS 10% 20%
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Taxes on transactions
Any sale or exchange of fund shares may generate a tax liability. Withdrawals or
distributions from tax-deferred accounts are taxable when received.
The table at left also can provide a guide for potential tax liability when
selling or exchanging fund shares. "Short-term capital gains" applies to fund
shares sold or exchanged up to 12 months after buying them. "Long-term capital
gains" applies to shares sold or exchanged after 12 months.
10
<PAGE 10>
SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASED fund shares may impose different
restrictions on these services and privileges offered by the fund, or may not
make them available at all. Consult your financial representative for more
information on the availability of these services and privileges.
Automatic services
BUYING OR SELLING SHARES AUTOMATICALLY is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application, or by
calling your financial representative or 1-800-554-4611.
- --------------------------------------------------------------------------------
For investing
DREYFUS AUTOMATIC For making automatic investments
ASSET BUILDER((reg.tm)) from a designated bank account.
DREYFUS PAYROLL For making automatic investments
SAVINGS PLAN through a payroll deduction.
DREYFUS GOVERNMENT For making automatic investments
DIRECT DEPOSIT from your federal employment,
PRIVILEGE Social Security or other regular
federal government check.
DREYFUS DIVIDEND For automatically reinvesting the
SWEEP dividends and distributions from
the fund into another Dreyfus fund
or certain Founders-advised funds
(not available for IRAs).
- --------------------------------------------------------------------------------
For exchanging shares
DREYFUS AUTO- For making regular exchanges from
EXCHANGE PRIVILEGE the fund into another Dreyfus fund
or certain
Founders-advised funds.
- --------------------------------------------------------------------------------
For selling shares
DREYFUS AUTOMATIC For making regular withdrawals
WITHDRAWAL PLAN from most Dreyfus funds. There will be no CDSC
on Class B shares, as long as the amounts withdrawn do not exceed 12% annually
of the account value at the time the shareholder elects to participate in the
plan.
Exchange privilege
YOU CAN EXCHANGE SHARES WORTH $500 OR MORE (no minimum for retirement accounts)
from one class of the fund into the same class of another Dreyfus Premier fund
or Founders-advised fund. (Or, you can exchange Class T shares for Class A
shares of certain Dreyfus Premier fixed income funds that do not offer Class T
shares.) You can request your exchange by contacting your financial
representative. Be sure to read the current prospectus for any fund into which
you are exchanging before investing. Any new account established through an
exchange will generally have the same privileges as your original account (as
long as they are available). There is currently no fee for exchanges, although
you may be charged a sales load when exchanging into any fund that has a higher
one.
TeleTransfer privilege
TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the TeleTransfer privilege. You can set up TeleTransfer on your
account by providing bank account information and following the instructions on
your application, or contact your financial representative.
Reinvestment privilege
UPON WRITTEN REQUEST, YOU CAN REINVEST up to the number of Class A, B or T
shares you redeemed within 45 days of selling them at the current share price
without any sales charge. If you paid a CDSC, it will be credited back to your
account. This privilege may be used only once.
Account statements
EVERY FUND INVESTOR automatically receives regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
Your Investment 11
<PAGE 11>
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
In Writing
Complete the application.
Mail your application and a check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587 Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to: Name of Fund P.O. Box 6587, Providence, RI
02940-6587 Attn: Institutional Processing
By Telephone
WIRE Have your bank send your
investment to The Bank of New York, with these instructions:
* ABA# 021000018
* DDA# 8900119365
* the fund name
* the share class
* your Social Security or tax ID number
* name(s) of investor(s)
* dealer number if applicable
Call us to obtain an account number. Return your application with the account
number on the application.
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* DDA# 8900119365
* the fund name
* the share class
* your account number
* name(s) of investor(s)
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.
Automatically
WITH AN INITIAL INVESTMENT Indicate
on your application which automatic service(s) you want. Return your application
with your investment.
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials.
TO SELL SHARES
Write a letter of instruction that includes:
* your name(s) and signature(s)
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see page 9).
Mail your request to: The Dreyfus Family of Funds P.O. Box 6587, Providence, RI
02940-6587 Attn: Institutional Processing
WIRE Call us or your financial representative to request your transaction. Be
sure the fund has your bank account information on file. Proceeds will be wired
to your bank.
TELETRANSFER Call us or your financial representative to request your
transaction. Be sure the fund has your bank account information on file.
Proceeds will be sent to your bank by electronic check.
CHECK Call us or your financial representative to request your transaction. A
check will be sent to the address of record.
AUTOMATIC WITHDRAWAL PLAN Call us or your financial representative to request a
form to add the plan. Complete the form, specifying the amount and frequency of
withdrawals you would like.
Be sure to maintain an account balance of $5,000 or more.
To open an account, make subsequent investments or to sell shares, please
contact your financial representative or call toll free in the U.S.
1-800-554-4611. Make checks payable to: THE DREYFUS FAMILY OF FUNDS.
Concepts to understand
WIRE TRANSFER: for transferring money from one financial institution to another.
Wiring is the fastest way to move money, although your bank may charge a fee to
send or receive wire transfers. Wire redemptions from the fund are subject to a
$1,000 minimum.
ELECTRONIC CHECK: for transferring money out of a bank account. Your transaction
is entered electronically, but may take up to eight business days to clear.
Electronic checks usually are available without a fee at all Automated Clearing
House (ACH) banks.
12
<PAGE 12>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
In Writing
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company,
Custodian P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail the slip and the check to: The Dreyfus Trust Company, Custodian P.O. Box
6427, Providence, RI 02940-6427 Attn: Institutional Processing
By Telephone
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* DDA# 8900119365
* the fund name
* the share class * your account number
* name of investor
* the contribution year
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
Automatically
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials. All contributions
will count as current year.
TO SELL SHARES
Write a letter of instruction that includes:
* your name and signature
* your account number and fund name
* the dollar amount you want to sell
* how and where to send the proceeds
* whether the distribution is qualified or premature
* whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see page 9).
Mail your request to:
The Dreyfus Trust Company
P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
SYSTEMATIC WITHDRAWAL PLAN Call us to request instructions to establish the
plan.
For information and assistance, contact your financial representative or call
toll free in the U.S. 1-800-554-4611. Make checks payable to: THE DREYFUS TRUST
COMPANY, CUSTODIAN.
Your Investment 13
<PAGE 13>
NOTES
[Application p1]
<PAGE>
[Application p2]
<PAGE>
NOTES
<PAGE>
For More Information
Dreyfus Premier Value Fund
A series of Dreyfus Premier Value Equity Funds
- ---------------------------------------
SEC file number: 811-4688
More information on this fund is available free upon request, including the
following:
Annual/Semiannual Report
Describes the fund's performance, lists portfolio holdings and contains a letter
from the fund's manager discussing recent market conditions, economic trends
and fund strategies that significantly affected the fund's performance during
the last fiscal year.
Statement of Additional Information (SAI)
Provides more details about the fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of fund documents can be viewed online or
downloaded from: http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
(c) 2000 Dreyfus Service Corporation
037P0300
<PAGE>
Dreyfus Premier International Value Fund
Investing in value stocks of foreign companies for capital growth
PROSPECTUS March 1, 2000
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
The Fund
Dreyfus Premier International Value Fund
- ----------------------------------
Ticker Symbols: NOT YET AVAILABLE
Contents
The Fund
- --------------------------------------------------------------------------------
Goal/Approach INSIDE COVER
Main Risks 1
Past Performance 2
Expenses 3
Management 4
Financial Highlights 6
Your Investment
- --------------------------------------------------------------------------------
Account Policies 8
Distributions and Taxes 11
Services for Fund Investors 12
Instructions for Regular Accounts 13
Instructions for IRAs 14
For More Information
- --------------------------------------------------------------------------------
INFORMATION ON THE FUND'S RECENT STRATEGIES AND HOLDINGS CAN BE FOUND IN THE
CURRENT ANNUAL/SEMIANNUAL REPORT. SEE BACK COVER.
GOAL/APPROACH
The fund seeks long-term capital growth. To pursue this goal, the fund
ordinarily invests most of its assets in equity securities of foreign issuers
which Dreyfus considers to be value companies. Though not specifically limited,
the fund ordinarily can be expected to invest in companies in at least three
foreign countries, limit its investments in any single company to no more than
2% of its assets, and hold no more than twice the MSCI-EAFE((reg.tm)) index (a
standard benchmark of international investing) weighting of any major economic
sector.
The fund's investment approach is value oriented, research driven, and risk
adverse. In selecting stocks, the portfolio manager identifies potential
investments through extensive quantitative and fundamental research. Emphasizing
individual stock selection rather than economic and industry trends, the fund
focuses on three key factors:
* VALUE, or how a stock is valued relative to its intrinsic worth based on
traditional value measures
* BUSINESS HEALTH, or overall efficiency and profitability as measured by
return on assets and return on equity
* BUSINESS MOMENTUM, or the presence of a catalyst (such as corporate
restructuring, change in management or spin-off) that potentially will
trigger a price increase near term to midterm
The fund typically sells a stock when it is no longer considered a value
company, appears less likely to benefit from the current market and economic
environment, shows deteriorating fundamentals or declining momentum, or falls
short of the manager's expectations.
Concepts to understand
VALUE COMPANIES: companies that appear underpriced according to certain
financial measurements of their intrinsic worth or business prospects (such as
price-to-earnings or price-to-book ratios). For international investing, "value"
is determined relative to a company's home market. Because a stock can remain
undervalued for years, value investors often look for factors that could trigger
a rise in price.
<PAGE>
MAIN RISKS
While stocks have historically been a leading choice of long-term investors,
they do fluctuate in price. The value of your investment in the fund will go up
and down, which means that you could lose money.
The fund's performance will be influenced by political, social and economic
factors affecting companies in foreign countries. Special risks include exposure
to currency fluctuations, less liquidity, less developed or efficient trading
markets, a lack of comprehensive company information, political instability and
differing auditing and legal standards. Each of those risks could result in more
volatility for the fund.
Emerging markets may be more volatile and less liquid than the markets of more
mature economies, and the securities of emerging market issuers often are
subject to rapid and large changes in price; however, these markets may provide
higher rates of return to investors.
Value stocks involve the risk that they may never reach what the manager
believes is their full market value either because the market fails to recognize
the stock's intrinsic worth or the manager misgauged that worth. They also may
decline in price, even though in theory they are already underpriced. Because
different types of stocks tend to shift in and out of favor depending on market
and economic conditions, the fund's performance may sometimes be lower or higher
than that of other types of funds (such as those emphasizing growth stocks, or a
mix of growth and value stocks).
Investments in smaller and midsize companies carry additional risks because
their earnings tend to be less predictable, their share prices more volatile and
their securities less liquid than larger, more established companies.
Under adverse market conditions, the fund could invest some or all of its assets
in money market securities. Although the fund would do this to avoid losses, it
could have the effect of reducing the benefit from any upswing in the market.
During such periods, the fund may not achieve its investment objective.
Other potential risks
The fund may, at times, invest some of its assets in derivative securities, such
as options and futures, and in foreign currencies. It may also sell short, which
involves selling a security it does not own in anticipation that the security's
price will go down. When employed, these practices are used primarily to hedge
the fund's portfolio, but may be used to increase returns; however, such
practices may lower returns or increase volatility. Derivatives can be illiquid
and highly sensitive to changes in their underlying investment. A small
investment in certain derivatives could have a potentially large impact on the
fund's performance.
At times, the fund may engage in short-term trading. This could increase the
fund's transaction costs and taxable distributions.
The Fund 1
<PAGE 1>
PAST PERFORMANCE
The tables below show some of the risks of investing in the fund. The first
table shows the fund's Class A performance for its first full calendar year of
operations. The performance figures do not reflect sales loads, and would be
lower if they were. The second table compares the fund's Class A, B, C and R
performance over time to that of the Morgan Stanley Capital International
Europe, Australasia, Far East (EAFE((reg.tm)))( )Index, a leading benchmark of
international stock performance. These returns include any applicable sales
loads. Both tables assume the reinvestment of dividends. Of course, past
performance is no guarantee of future results. Since Class T shares are new,
past performance information for a full calendar year is not available for Class
T shares as of the date of this prospectus. Performance for Class T shares will
vary from the performance of the fund's other share classes due to differences
in expenses.
- --------------------------------------------------------------------------------
Year-by-year total return AS OF 12/31 EACH YEAR (%)
CLASS A SHARES
27.29
90 91 92 93 94 95 96 97 98 99
BEST QUARTER: Q4 '99 +8.98%
WORST QUARTER: Q1 '99 +1.34%
- --------------------------------------------------------------------------------
Average annual total return AS OF 12/31/99
<TABLE>
<CAPTION>
Inception date 1 Year Since inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A (3/31/98) 19.94% 8.53%
CLASS B (3/31/98) 22.35% 9.27%
CLASS C (3/31/98) 25.33% 11.43%
CLASS R (3/31/98) 27.64% 12.54%
MSCI EAFE
INDEX 26.96% 17.61%
</TABLE>
What this fund is -- and isn't
This fund is a mutual fund: a pooled investment that is professionally managed
and gives you the opportunity to participate in financial markets. It strives to
reach its stated goal, although as with all mutual funds, it cannot offer
guaranteed results.
An investment in this fund is not a bank deposit. It is not insured or
guaranteed by the FDIC or any other government agency. It is not a complete
investment program. You could lose money in this fund, but you also have the
potential to make money.
2
<PAGE 2>
EXPENSES
As an investor, you pay certain fees and expenses in connection with the fund,
which are described in the tables below.
<TABLE>
<CAPTION>
Fee table
CLASS A CLASS B CLASS C CLASS R CLASS T
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION FEES (FEES PAID FROM YOUR ACCOUNT)
Maximum front-end sales charge on purchases
AS A % OF OFFERING PRICE 5.75 NONE NONE NONE 4.50
Maximum contingent deferred sales charge (CDSC)
AS A % OF PURCHASE OR SALE PRICE, WHICHEVER IS LESS NONE* 4.00 1.00 NONE NONE*
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES PAID FROM FUND ASSETS)
% OF AVERAGE DAILY NET ASSETS
Management fees 1.00 1.00 1.00 1.00 1.00
Rule 12b-1 fee NONE .75 .75 NONE .25
Shareholder services fee .25 .25 .25 NONE .25
Other expenses 2.06 2.02 2.06 2.07 2.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 3.31 4.02 4.06 3.07 3.50
Fee waiver and/or expense reimbursements (1.31) (1.27) (1.31) (1.32) (1.25)
- ------------------------------------------------------------------------------------------------------------------------------------
NET OPERATING EXPENSES** 2.00 2.75 2.75 1.75 2.25
</TABLE>
* SHARES BOUGHT WITHOUT AN INITIAL SALES CHARGE AS PART OF AN INVESTMENT OF
$1 MILLION OR MORE MAY BE CHARGED A CDSC OF 1.00% IF REDEEMED WITHIN ONE
YEAR.
** THE DREYFUS CORPORATION HAS AGREED, UNTIL OCTOBER 31, 2000, TO WAIVE
RECEIPT OF ITS FEES AND/OR ASSUME THE EXPENSES OF THE FUND SO THAT FUND
EXPENSES, EXCLUDING SHAREHOLDER SERVICES FEES AND RULE 12B-1 FEES, AND
TAXES, BROKERAGE COMMISSIONS, EXTRAORDINARY EXPENSES, INTEREST EXPENSES,
AND COMMITMENT FEES ON OFFERINGS, DO NOT EXCEED 1.75%.
<TABLE>
<CAPTION>
Expense example
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A $766 $1,420 $2,096 $3,888
CLASS B
WITH REDEMPTION $678 $1,408 $2,155 $3,619***
WITHOUT REDEMPTION $278 $1,108 $1,955 $3,619***
CLASS C
WITH REDEMPTION $378 $1,116 $1,970 $4,176
WITHOUT REDEMPTION $278 $1,116 $1,970 $4,176
CLASS R $178 $824 $1,496 $3,291
CLASS T $668 $1,365 $2,083 $3,976
</TABLE>
*** ASSUMES CONVERSION OF CLASS B TO CLASS A AT END OF THE SIXTH YEAR FOLLOWING
THE DATE OF PURCHASE.
This example shows what you could pay in expenses over time. It uses the same
hypothetical conditions other funds use in their prospectuses: $10,000 initial
investment, 5% total return each year and no changes in expenses. Because actual
return and expenses will be different, the example is for comparison only. The
one-year numbers are based on net operating expenses. The longer-term numbers
are based on total annual fund operating expenses.
Concepts to understand
MANAGEMENT FEE: the fee paid to Dreyfus for managing the fund's portfolio and
assisting in all aspects of its operation.
RULE 12B-1 FEE: the fee paid to the fund's distributor to finance the sale and
distribution of Class B, Class C and Class T shares. Because this fee is paid
out of the fund's assets on an ongoing basis, over time it will increase the
cost of your investment and may cost you more than paying other types of sales
charges.
SHAREHOLDER SERVICES FEE: a fee paid to the fund's distributor for providing
shareholder services.
OTHER EXPENSES: fees paid by the fund for miscellaneous items such as transfer
agency, custody, professional and registration fees. Because Class T shares were
not offered to the public during the fiscal year ended October 31, 1999, these
fees for Class T shares, and total and net fund operating expenses for Class T
shares, are based on an estimated amount.
The Fund 3
<PAGE 3>
MANAGEMENT
The investment adviser for the fund is The Dreyfus Corporation, 200 Park Avenue,
New York, New York 10166. Founded in 1947, Dreyfus manages more than $127
billion in over 160 mutual fund portfolios. For the past fiscal year, no
management fee was paid by the fund to Dreyfus. Dreyfus is the primary mutual
fund business of Mellon Financial Corporation, a global financial services
company with approximately $2.5 trillion of assets under management,
administration or custody, including approximately $450 billion under
management. Mellon provides wealth management, global investment services and a
comprehensive array of banking services for individuals, businesses and
institutions. Mellon is headquartered in Pittsburgh, Pennsylvania.
The Dreyfus asset management philosophy is based on the belief that discipline
and consistency are important to investment success. For each fund, Dreyfus
seeks to establish clear guidelines for portfolio management and to be
systematic in making decisions. This approach is designed to provide each fund
1with a distinct, stable identity.
The fund's primary portfolio manager is Sandor Cseh. He has managed the fund
since its inception. Mr. Cseh has been a portfolio manager for The Boston
Company Asset Management LLC (TBCAM), an affiliate of Dreyfus, since 1994. In
May 1996, he became a dual employee of Dreyfus and TBCAM.
Dreyfus has a personal securities trading policy (the "Policy") which restricts
the personal securities transactions of its employees. Its primary purpose is to
ensure that personal trading by Dreyfus employees does not disadvantage any
Dreyfus-managed fund. Dreyfus portfolio managers and other investment personnel
who comply with the Policy's preclearance and disclosure procedures may be
permitted to purchase, sell or hold certain types of securities which also may
be or are held in the fund(s) they advise.
Related performance information
This section contains performance information derived from historical composite
performance of all International Equity Private Accounts currently managed by
Sandor Cseh and D. Kirk Henry, also a portfolio manager of the fund at TBCAM and
at prior investment advisory firms. This information can be useful to investors
in deciding whether to purchase fund shares.
The performance information presented reflects the management of the Private
Accounts by Messrs. Cseh and Henry for Cseh International and Provident Capital
Management, Inc. for the periods from April 1, 1988 to September 30, 1990, and
October 1, 1990 through May 31, 1994. At these firms, Messrs. Cseh and Henry
were the only individuals responsible for managing the Private Accounts and for
selecting securities for purchase and sale. While the Private Accounts have
investment objectives, policies and strategies substantially similar to those of
the fund, the performance of the Private Accounts should not be used as a
substitute for the fund's own performance, nor be considered indicative of the
future performance of the fund.
The Private Accounts are not registered under the Investment Company Act of
1940, so they are not subject to the same securities and tax law restrictions
that the fund is subject to, and which, if they did apply, might otherwise
adversely affect the performance of the Private Accounts. The performance
results of the Private Accounts have been prepared in accordance with
Performance Presentation Standards of the Association for Investment Management
and Research adjusted to the current management fee schedule applicable to each
Private Account. The performance results of the Private Accounts would have
been lower had they been subject to the fees and expenses incurred by the fund.
This section also contains the fund's performance from its inception date
through December 31, 1999.
4
<PAGE 4>
Related performance information for private accounts
COMPOSITE PERFORMANCE COMPARISON (NET OF ACTUAL FEES) FOR INTERNATIONAL EQUITY
PRIVATE ACCOUNTS
<TABLE>
<CAPTION>
ANNUAL RETURNS
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
International
Equity
Private Accounts 12.08%((+)) 22.86% -11.02% 14.52% -5.29% 37.68% 3.35% 15.38% 11.45% 9.80% 10.93% 28.67%
Morgan Stanley
Capital
International
(EAFE((reg.tm)))
Index((+)(+)) 11.50%((+)) 10.80% -23.20% 12.50% -11.85% 32.94% 8.06% 11.55% 6.36% 2.06% 20.33% 26.96%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)
1 Year 5 Years 10 Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Equity Private Accounts 28.67% 15.04% 10.72%
Morgan Stanley Capital International (EAFE((reg.tm))) Index 26.96% 12.83% 7.01%
((+)) AGGREGATE RETURN FOR THE NINE MONTHS ENDED DECEMBER 31, 1988 (INCEPTION
DATE OF APRIL 1, 1988).
((+)(+)) THE INDEX IS A LEADING UNMANAGED BENCHMARK FOR INTERNATIONAL STOCK
MARKET PERFORMANCE. IT IS AN AGGREGATE OF 20 COUNTRY INDEXES THAT
COLLECTIVELY REPRESENT THE MAJOR MARKETS OF THE WORLD. PERFORMANCE
SHOWN INCLUDES GROSS REINVESTED DIVIDENDS.
</TABLE>
Average annual total returns for the fund
FOR THE PERIOD ENDED DECEMBER 31, 1999
Since inception
1 Year (3/31/98)
- --------------------------------------------------------------------------------
CLASS A (NAV) 27.29% 12.25%
CLASS A (5.75% max. load) 19.94% 8.53%
CLASS B (NAV) 26.35% 11.40%
CLASS B (4.0% max. CDSC) 22.35% 9.27%
CLASS C (NAV) 26.33% 11.43%
CLASS C (1.0% max. CDSC) 25.33% 11.43%
CLASS R (NAV) 27.64% 12.54%
MORGAN STANLEY CAPITAL
INTERNATIONAL (EAFE((reg.tm))) INDEX* 26.96% 17.61%
* WITH GROSS DIVIDENDS REINVESTED.
NO INFORMATION IS PROVIDED FOR CLASS T SHARES, WHICH WERE NOT AVAILABLE AS OF
THE DATE OF THIS PROSPECTUS.
Concepts to understand
YEAR 2000 ISSUES: the fund could be adversely affected if the computer systems
used by Dreyfus and the fund's other service providers do not properly process
and calculate date-related information from and after January 1, 2000.
Dreyfus has taken steps designed to avoid year 2000-related problems in its
systems and to monitor the readiness of other service providers. In addition,
issuers of securities in which the fund invests may be adversely affected by
year 2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
The Fund 5
<PAGE 5>
FINANCIAL HIGHLIGHTS
The following tables describe the performance of each share class for the fiscal
periods indicated. "Total return" shows how much your investment in the fund
would have increased (or decreased) during each period, assuming you had
reinvested all dividends and distributions. These figures have been
independently audited by Ernst & Young LLP, whose report, along with the fund's
financial statements, is included in the annual report. No information is
provided for the fund's Class T shares, which were not offered to the public
during the fiscal year ended October 31, 1999.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CLASS A 1999 1998(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER-SHARE DATA ($)
Net asset value, beginning of period 11.32 12.50
Investment operations: Investment income -- net .03(2) .05
Net realized and unrealized gain (loss) on investments 2.75 (1.23)
Total from investment operations 2.78 (1.18)
Distributions: Dividends from investment income - net (.07) --
Dividends from net realized gain on investments (.05) --
Total distributions (.12) --
Net asset value, end of period 13.98 11.32
Total return (%)(3) 24.75 (9.44)(4)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 2.00 1.19(4)
Ratio of net investment income to average net assets (%) .22 .39(4)
Decrease reflected in above expense ratios due to actions by Dreyfus (%) 1.31 .92(4)
Portfolio turnover rate (%) 41.73 17.71(4)
- --------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 4,110 3,213
(1) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) THROUGH OCTOBER 31, 1998.
(2) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(3) EXCLUSIVE OF SALES CHARGE.
(4) NOT ANNUALIZED.
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CLASS B 1999 1998(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER-SHARE DATA ($)
Net asset value, beginning of period 11.27 12.50
Investment operations: Investment income (loss) -- net (.08)(2) (.01)
Net realized and unrealized gain (loss) on investments 2.74 (1.22)
Total from investment operations 2.66 (1.23)
Distributions: Dividends from investment income - net (.02) --
Dividends from net realized gain on investments (.05) --
Total distributions (.07) --
Net asset value, end of period 13.86 11.27
Total return (%)(3) 23.70 (9.84)(4)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 2.75 1.64(4)
Ratio of net investment income to average net assets (%) (.60) (.07)(4)
Decrease reflected in above expense ratios due to actions by Dreyfus (%) 1.27 .92(4)
Portfolio turnover rate (%) 41.73 17.71(4)
- --------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 960 483
(1) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) THROUGH OCTOBER 31, 1998.
(2) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(3) EXCLUSIVE OF SALES CHARGE.
(4) NOT ANNUALIZED.
</TABLE>
6
<PAGE 6>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CLASS C 1999 1998(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER-SHARE DATA ($)
Net asset value, beginning of period 11.27 12.50
Investment operations: Investment income (loss) -- net (.07)(2) .01
Net realized and unrealized gain (loss) on investments 2.74 (1.22)
Total from investment operations 2.67 (1.23)
Distributions: Dividends from investment income - net (.02) --
Dividends from net realized gain on investments (.05) --
Total distributions (.07) --
Net asset value, end of period 13.87 11.27
Total return (%)(3) 23.77 (9.84)(4)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 2.75 1.64(4)
Ratio of net investment income to average net assets (%) (.55) (.06)(4)
Decrease reflected in above expense ratios due to actions by Dreyfus (%) 1.31 .92(4)
Portfolio turnover rate (%) 41.73 17.71(4)
- --------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 585 451
(1) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) THROUGH OCTOBER 31, 1998.
(2) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(3) EXCLUSIVE OF SALES CHARGE.
(4) NOT ANNUALIZED.
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
CLASS R 1999 1998(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER-SHARE DATA ($)
Net asset value, beginning of period 11.33 12.50
Investment operations: Investment income -- net .08(2) .06
Net realized and unrealized gain (loss) on investments 2.74 (1.23)
Total from investment operations 2.82 (1.17)
Distributions: Dividends from investment income - net (.09) --
Dividends from net realized gain on investments (.05) --
Total distributions (.14) --
Net asset value, end of period 14.01 11.33
Total return (%) 25.12 (9.36)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (%) 1.75 1.04(3)
Ratio of net investment income to average net assets (%) .62 .53(3)
Decrease reflected in above expense ratios due to actions by Dreyfus (%) 1.32 .92(3)
Portfolio turnover rate (%) 41.73 17.71(3)
- --------------------------------------------------------------------------------
Net assets, end of period ($ x 1,000) 1,116 453
(1) FROM MARCH 31, 1998 (COMMENCEMENT OF OPERATIONS) THROUGH OCTOBER 31, 1998.
(2) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(3) NOT ANNUALIZED.
</TABLE>
The Fund 7
<PAGE 7>
Your Investment
ACCOUNT POLICIES
THE DREYFUS PREMIER FUNDS are designed primarily for people who are investing
through a third party, such as a bank, broker-dealer or financial adviser, or in
a 401(k) or other retirement plan. Third parties with whom you open a fund
account may impose policies, limitations and fees which are different from
those described here.
YOU WILL NEED TO CHOOSE A SHARE CLASS before making your initial investment. In
making your choice, you should weigh the impact of all potential costs over the
length of your investment, including sales charges and annual fees. For example,
in some cases, it can be more economical to pay an initial sales charge than to
choose a class with no initial sales charge but higher annual fees and a
contingent deferred sales charge (CDSC).
* CLASS A shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares,
want to take advantage of the reduced sales charges available on larger
investments and/or have a longer-term investment horizon
* CLASS B shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work
immediately and/or have a longer-term investment horizon
* CLASS C shares may be appropriate for investors who wish to avoid a
front-end sales charge, put 100% of their investment dollars to work
immediately and/or have a shorter-term investment horizon
* CLASS R shares are designed for eligible institu- tions on behalf of their
clients (individuals may not purchase these shares directly)
* CLASS T shares may be appropriate for investors who prefer to pay the
fund's sales charge up front rather than upon the sale of their shares,
want to take advantage of the reduced sales charges available on larger
investments and have a shorter-term investment horizon
Your financial representative can help you choose the share class that is
appropriate for you.
Reduced Class A and Class T sales charge
LETTER OF INTENT: lets you purchase Class A and Class T shares over a 13-month
period and receive the same sales charge as if all shares had been purchased at
once.
RIGHT OF ACCUMULATION: lets you add the value of any shares you own in this
fund, any other Dreyfus Premier fund, or any fund advised by Founders Asset
Management LLC ("Founders"), an affiliate of Dreyfus, sold with a sales load, to
the amount of your next Class A or Class T investment for purposes of
calculating the sales charge.
CONSULT THE STATEMENT OF ADDITIONAL INFORMATION (SAI) OR YOUR FINANCIAL
REPRESENTATIVE FOR MORE DETAILS.
8
<PAGE 8>
Share class charges
EACH SHARE CLASS has its own fee structure. In some cases, you may not have to
pay a sales charge to buy or sell shares. Consult your financial representative
or the SAI to see if this may apply to you. Because Class A has lower expenses
than Class T, if you invest $1 million or more in the fund you should consider
buying Class A shares.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Sales charges
CLASS A AND CLASS T -- CHARGED WHEN YOU BUY SHARES
Sales charge Sales charge
deducted as a % as a % of your
Your investment of offering price net investment
- ------------------------------------------------------------------------------------------------------------------------------------
Class Class Class Class
A T A T
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Up to $49,999 5.75% 4.50% 6.10% 4.70%
$50,000 -- $99,999 4.50% 4.00% 4.70% 4.20%
$100,000 -- $249,999 3.50% 3.00% 3.60% 3.30%
$250,000 -- $499,999 2.50% 2.00% 2.60% 2.00%
$500,000 -- $999,999 2.00% 1.50% 2.00% 1.50%
$1 million or more* 0.00% 0.00% 0.00% 0.00%
* A 1.00% CDSC may be charged on any shares sold within one year of purchase
(except shares bought through dividend reinvestment).
</TABLE>
Class T shares also carry an annual Rule 12b-1 fee of 0.25% of the class's
average daily net assets.
- --------------------------------------------------------------------------------
CLASS B -- CHARGED WHEN YOU SELL SHARES
CDSC as a % of your initial
Years since purchase investment or your redemption
was made (whichever is less)
- --------------------------------------------------------------------------------
Up to 2 years 4.00%
2 -- 4 years 3.00%
4 -- 5 years 2.00%
5 -- 6 years 1.00%
More than 6 years Shares will automatically
convert to Class A
Class B shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
- --------------------------------------------------------------------------------
CLASS C -- CHARGED WHEN YOU SELL SHARES
A 1.00% CDSC is imposed on redemptions made within the first year of purchase.
Class C shares also carry an annual Rule 12b-1 fee of 0.75% of the class's
average daily net assets.
- --------------------------------------------------------------------------------
CLASS R -- NO SALES LOAD OR RULE 12B-1 FEES
Buying shares
THE NET ASSET VALUE (NAV) of each class is generally calculated as of the close
of trading on the New York Stock Exchange ("NYSE") (usually 4:00 p.m. Eastern
time) every day the exchange is open. Your order will be priced at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. 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 fund's board.
ORDERS TO BUY AND SELL SHARES received by dealers by the close of trading on the
NYSE and transmitted to the distributor or its designee by the close of its
business day (normally 5:15 p.m. Eastern time) will be based on the NAV
determined as of the close of trading on the NYSE that day.
- --------------------------------------------------------------------------------
Minimum investments
Initial Additional
- --------------------------------------------------------------------------------
REGULAR ACCOUNTS $1,000 $100; $500 FOR
TELETRANSFER INVESTMENTS
TRADITIONAL IRAS $750 NO MINIMUM
SPOUSAL IRAS $750 NO MINIMUM
ROTH IRAS $750 NO MINIMUM
EDUCATION IRAS $500 NO MINIMUM
AFTER THE FIRST YEAR
DREYFUS AUTOMATIC $100 $100
INVESTMENT PLANS
All investments must be in U.S. dollars. Third-party checks cannot be accepted.
You may be charged a fee for any check that does not clear. Maximum TeleTransfer
purchase is $150,000 per day.
Concepts to understand
NET ASSET VALUE (NAV): the market value of one share, computed by dividing the
total net assets of a fund or class by its shares outstanding. The fund's Class
A and Class T shares are offered to the public at NAV plus a sales charge.
Classes B, C and R are offered at NAV, but Classes B and C generally are subject
to higher annual operating expenses and a CDSC.
Your Investment 9
<PAGE 9>
ACCOUNT POLICIES (CONTINUED)
Selling shares
YOU MAY (REDEEM) SELL SHARES AT ANY TIME through your financial representative,
or you can contact the fund directly. Your shares will be sold at the next NAV
calculated after your order is accepted by the fund's transfer agent or other
authorized entity. Any certificates representing fund shares being sold must be
returned with your redemption request. Your order will be processed promptly and
you will generally receive the proceeds within a week.
TO KEEP YOUR CDSC AS LOW AS POSSIBLE, each time you request to sell shares we
will first sell shares that are not subject to a CDSC, and then those subject to
the lowest charge. The CDSC is based on the lesser of the original purchase cost
or the current market value of the shares being sold, and is not charged on
shares you acquired by reinvesting your dividends. There are certain instances
when you may qualify to have the CDSC waived. Consult your financial
representative or the SAI for details.
BEFORE SELLING RECENTLY PURCHASED SHARES, please note that if the fund has not
yet collected payment for the shares you are selling, it may delay sending the
proceeds for up to eight business days or until it has collected payment.
General policies
UNLESS YOU DECLINE TELEPHONE PRIVILEGES on your application, you may be
responsible for any fraudulent telephone order as long as Dreyfus takes
reasonable measures to verify the order.
THE FUND RESERVES THE RIGHT TO:
* refuse any purchase or exchange request that could adversely affect the
fund or its operations, including those from any individual or group who,
in the fund's view, is likely to engage in excessive trading (usually
defined as more than four exchanges out of the fund within a calendar year)
* refuse any purchase or exchange request in excess of 1% of the fund's total
assets
* change or discontinue its exchange privilege, or temporarily suspend this
privilege during unusual market conditions
* change its minimum investment amounts
* delay sending out redemption proceeds for up to seven days (generally
applies only in cases of very large redemptions, excessive trading or
during unusual market conditions)
The fund also reserves the right to make a "redemption in kind" -- payment in
portfolio securities rather than cash -- if the amount you are redeeming is
large enough to affect fund operations (for example, if it represents more than
1% of the fund's assets).
Written sell orders
Some circumstances require written sell orders along with signature guarantees.
These include:
* amounts of $10,000 or more on accounts whose address has been changed
within the last 30 days
* requests to send the proceeds to a different payee or address
Written sell orders of $100,000 or more must also be signature guaranteed.
A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be processed correctly.
Small account policies
To offset the relatively higher costs of servicing smaller accounts, the fund
charges regular accounts with balances below $2,000 an annual fee of $12. The
fee will be imposed during the fourth quarter of each calendar year.
The fee will be waived for: any investor whose aggregate Dreyfus mutual fund
investments total at least $25,000; IRA accounts; accounts participating in
automatic investment programs; accounts opened through a financial institution.
If your account falls below $500, the fund may ask you to increase your balance.
If it is still below $500 after 30 days, the fund may close your account and
send you the proceeds.
10
<PAGE 10>
DISTRIBUTIONS AND TAXES
THE FUND GENERALLY PAYS ITS SHAREHOLDERS dividends from its net investment
income and distributes any net capital gains it has realized once a year. Each
share class will generate a different dividend because each has different
expenses. Your distributions will be reinvested in the fund unless you instruct
the fund otherwise. There are no fees or sales charges on reinvestments.
FUND DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE in the year received to most
investors (unless your investment is in an IRA or other tax-deferred account
where taxation may be deferred). The tax status of any distribution is the same
regardless of how long you have been in the fund and whether you reinvest your
distributions or take them in cash. In general, distributions are federally
taxable as follows:
- --------------------------------------------------------------------------------
Taxability of distributions
Type of Tax rate for Tax rate for
distribution 15% bracket 28% bracket or above
- --------------------------------------------------------------------------------
INCOME ORDINARY ORDINARY
DIVIDENDS INCOME RATE INCOME RATE
SHORT-TERM ORDINARY ORDINARY
CAPITAL GAINS INCOME RATE INCOME RATE
LONG-TERM
CAPITAL GAINS 10% 20%
Because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
Taxes on transactions
Any sale or exchange of fund shares may generate a tax liability.
The table at left also can provide a guide for potential tax liability when
selling or exchanging fund shares. "Short-term capital gains" applies to fund
shares sold or exchanged up to 12 months after buying them. "Long-term capital
gains" applies to shares sold or exchanged after 12 months.
Your Investment 11
<PAGE 11>
SERVICES FOR FUND INVESTORS
THE THIRD PARTY THROUGH WHOM YOU PURCHASED fund shares may impose different
restrictions on these services and privileges offered by the fund, or may not
make them available at all. Consult your financial representative for more
information on the availability of these services and privileges.
Automatic services
BUYING OR SELLING SHARES AUTOMATICALLY is easy with the services described
below. With each service, you select a schedule and amount, subject to certain
restrictions. You can set up most of these services with your application, or by
calling your financial representative or 1-800-554-4611.
- --------------------------------------------------------------------------------
For investing
DREYFUS AUTOMATIC For making automatic investments
ASSET BUILDER((reg.tm)) from a designated bank account.
DREYFUS PAYROLL For making automatic investments
SAVINGS PLAN through a payroll deduction.
DREYFUS GOVERNMENT For making automatic investments
DIRECT DEPOSIT from your federal employment,
PRIVILEGE Social Security or other regular
federal government check.
DREYFUS DIVIDEND For automatically reinvesting the
SWEEP dividends and distributions from
the fund into another Dreyfus fund or certain
Founders-advised funds
(not available for IRAs).
- --------------------------------------------------------------------------------
For exchanging shares
DREYFUS AUTO- For making regular exchanges
EXCHANGE PRIVILEGE from the fund into another
Dreyfus fund or certain
Founders-advised funds.
- --------------------------------------------------------------------------------
For selling shares
DREYFUS AUTOMATIC For making regular withdrawals
WITHDRAWAL PLAN from most Dreyfus funds. There will be no CDSC
on Class B shares, as long as the amounts
withdrawn do not exceed 12% annually of the
account value at the time the shareholder elects
to participate in the plan.
Exchange privilege
YOU CAN EXCHANGE SHARES WORTH $500 OR MORE (no minimum for retirement accounts)
from one class of the fund into the same class of another Dreyfus Premier fund
or Founders-advised fund. (Or, you can exchange Class T shares for Class A
shares of certain Dreyfus Premier fixed income funds that do not offer Class T
shares.) You can request your exchange by contacting your financial
representative. Be sure to read the current prospectus for any fund into which
you are exchanging before investing. Any new account established through an
exchange will generally have the same privileges as your original account (as
long as they are available). There is currently no fee for exchanges, although
you may be charged a sales load when exchanging into any fund that has a higher
one.
TeleTransfer privilege
TO MOVE MONEY BETWEEN YOUR BANK ACCOUNT and your Dreyfus fund account with a
phone call, use the TeleTransfer privilege. You can set up TeleTransfer on your
account by providing bank account information and following the instructions on
your application, or contact your financial representative.
Reinvestment privilege
UPON WRITTEN REQUEST, YOU CAN REINVEST up to the number of Class A, B or T
shares you redeemed within 45 days of selling them at the current share price
without any sales charge. If you paid a CDSC, it will be credited back to your
account. This privilege may be used only once.
Account statements
EVERY FUND INVESTOR automatically receives regular account statements. You will
also be sent a yearly statement detailing the tax characteristics of any
dividends and distributions you have received.
12
<PAGE 12>
INSTRUCTIONS FOR REGULAR ACCOUNTS
TO OPEN AN ACCOUNT
In Writing
Complete the application.
Mail your application and a check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Mail the slip and the check to:
Name of Fund
P.O. Box 6587, Providence, RI 02940-6587
Attn: Institutional Processing
By Telephone
WIRE Have your bank send your
investment to The Bank of New York, with these instructions:
* ABA# 021000018
* DDA# 8900337214
* the fund name
* the share class
* your Social Security or tax ID number
* name(s) of investor(s)
* dealer number if applicable
Call us to obtain an account number. Return your application with the account
number on the application.
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* DDA# 8900337214
* the fund name
* the share class
* your account number
* name(s) of investor(s)
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
TELETRANSFER Request TeleTransfer on your application. Call us to request your
transaction.
Automatically
WITH AN INITIAL INVESTMENT Indicate
on your application which automatic service(s) you want. Return your application
with your investment.
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials.
TO SELL SHARES
Write a letter of instruction that includes:
* your name(s) and signature(s)
* your account number
* the fund name
* the dollar amount you want to sell
* how and where to send the proceeds
Obtain a signature guarantee or other documentation, if required (see page 10)
Mail your request to: The Dreyfus Family of Funds P.O. Box 6587, Providence, RI
02940-6587 Attn: Institutional Processing
WIRE Call us or your financial representative to request your transaction. Be
sure the fund has your bank account information on file. Proceeds will be wired
to your bank.
TELETRANSFER Call us or your financial representative to request your
transaction. Be sure the fund has your bank account information on file.
Proceeds will be sent to your bank by electronic check.
CHECK Call us or your financial representative to request your transaction. A
check will be sent to the address of record.
AUTOMATIC WITHDRAWAL PLAN Call us or your financial representative to request a
form to add the plan. Complete the form, specifying the amount and frequency of
withdrawals you would like.
Be sure to maintain an account balance of $5,000 or more.
To open an account, make subsequent investments or to sell shares, please
contact your financial representative or call toll free in the U.S.
1-800-554-4611. Make checks payable to: THE DREYFUS FAMILY OF FUNDS.
Concepts to understand
WIRE TRANSFER: for transferring money from one financial institution to another.
Wiring is the fastest way to move money, although your bank may charge a fee to
send or receive wire transfers. Wire redemptions from the fund are subject to a
$1,000 minimum.
ELECTRONIC CHECK: for transferring money out of a bank account. Your transaction
is entered electronically, but may take up to eight business days to clear.
Electronic checks usually are available without a fee at all Automated Clearing
House (ACH) banks.
Your Investment 13
<PAGE 13>
INSTRUCTIONS FOR IRAS
TO OPEN AN ACCOUNT
In Writing
Complete an IRA application, making sure to specify the fund name and to
indicate the year the contribution is for.
Mail your application and a check to:
The Dreyfus Trust Company, Custodian P.O. Box 6427, Providence, RI 02940-6427
Attn: Institutional Processing
TO ADD TO AN ACCOUNT
Fill out an investment slip, and write your account number on your check.
Indicate the year the contribution is for.
Mail the slip and the check to: The Dreyfus Trust Company, Custodian P.O. Box
6427, Providence, RI 02940-6427 Attn: Institutional Processing
By Telephone
WIRE Have your bank send your investment to The Bank of New York, with these
instructions:
* ABA# 021000018
* DDA# 8900337214
* the fund name
* the share class * your account number
* name of investor
* the contribution year
* dealer number if applicable
ELECTRONIC CHECK Same as wire, but insert "1111" before your account number.
Automatically
ALL SERVICES Call us or your financial representative to request a form to add
any automatic investing service (see "Services for Fund Investors"). Complete
and return the form along with any other required materials. All contributions
will count as current year.
TO SELL SHARES
Write a letter of instruction that includes:
* your name and signature
* your account number and fund name
* the dollar amount you want to sell
* how and where to send the proceeds
* whether the distribution is qualified or premature
* whether the 10% TEFRA should be withheld
Obtain a signature guarantee or other documentation, if required (see page 10).
Mail your request to: The Dreyfus Trust Company P.O. Box 6427, Providence, RI
02940-6427 Attn: Institutional Processing
SYSTEMATIC WITHDRAWAL PLAN Call us to request instructions to establish the
plan.
For information and assistance, contact your financial representative or call
toll free in the U.S. 1-800-554-4611. Make checks payable to: THE DREYFUS TRUST
COMPANY, CUSTODIAN.
14
<PAGE 14>
[Application p1]
<PAGE>
[Application p2]
<PAGE>
NOTES
<PAGE>
For More Information
Dreyfus Premier International Value Fund
A series of Dreyfus Premier Value Equity Funds
- ---------------------------------------
SEC file number: 811-4688
More information on this fund is available free upon request, including the
following:
Annual/Semiannual Report
Describes the fund's performance, lists portfolio holdings and contains a letter
from the fund's manager discussing recent market conditions, economic trends
and fund strategies that significantly affected the fund's performance during
the last fiscal year.
Statement of Additional Information (SAI)
Provides more details about the fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
ON THE INTERNET Text-only versions of fund documents can be viewed online or
downloaded from: http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC
20549-6009.
(c) 2000 Dreyfus Service Corporation
173P0300
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DREYFUS PREMIER VALUE EQUITY FUNDS
DREYFUS PREMIER VALUE FUND
DREYFUS PREMIER INTERNATIONAL VALUE FUND
CLASS A, CLASS B, CLASS C, CLASS R, AND CLASS T SHARES
STATEMENT OF ADDITIONAL INFORMATION
MARCH 1, 2000
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This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Premier Value Fund and Dreyfus Premier International Value Fund, each
dated March 1, 2000 (each, a "Fund" and collectively, the "Funds") of Dreyfus
Premier Value Equity Funds (the "Company"), as each may be revised from time to
time. To obtain a copy of the relevant Fund's Prospectus, please call your
financial adviser, or you may write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call 1-800-554-4611.
The most recent Annual Report and Semi-Annual Report to Shareholders
for each Fund are separate documents supplied with this Statement of Additional
Information, and the financial statements, accompanying notes and report of
independent auditors appearing in the Annual Report are incorporated by
reference into this Statement of Additional Information.
TABLE OF CONTENTS
Page
Description of the Company and Funds .......................................B-2
Management of the Company...................................................B-17
Management Arrangements.....................................................B-22
How to Buy Shares...........................................................B-27
Distribution Plan and Shareholder Services Plan.............................B-34
How to Redeem Shares........................................................B-36
Shareholder Services........................................................B-41
Determination of Net Asset Value............................................B-46
Dividends, Distributions and Taxes..........................................B-47
Portfolio Transactions......................................................B-50
Performance Information.....................................................B-51
Information About the Company and Funds.....................................B-54
Counsel and Independent Auditors............................................B-56
Appendix....................................................................B-57
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DESCRIPTION OF THE COMPANY AND FUNDS
The Company is a Massachusetts business trust that commenced operations on
October 1, 1986. Each Fund is a separate portfolio of the Company, an open-end
management investment company, known as a mutual fund. Dreyfus Premier
International Value Fund is a diversified fund, which means that, with respect
to 75% of the Fund's total assets, the Fund will not invest more than 5% of its
assets in the securities of any single issuer nor hold more than 10% of the
outstanding voting securities of any single issuer. Dreyfus Premier Value Fund
is a non-diversified fund, which 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, as amended (the "1940 Act").
The Dreyfus Corporation (the "Manager") serves as each Fund's investment
adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor
of each Fund's shares.
Certain Portfolio Securities
The following information supplements and should be read in conjunction
with each Fund's Prospectus.
Depositary Receipts. (All Funds) A Fund may invest in the securities of
foreign issuers in the form of American Depositary Receipts or American
Depositary Shares ("ADRs"), European Depositary Receipts ("EDRs"), Global
Depositary Receipts or Global Depositary Shares ("GDRs"), and other forms of
depositary receipts. These securities may not necessarily be denominated in the
same currency as the securities into which they may be converted. ADRs are
receipts typically issued by a United States bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs, which are sometimes referred to as Continental Depositary Receipts
("CDRs"), are receipts issued in Europe and GDRs are receipts issued outside the
United States, in each case, typically by non-United States banks and trust
companies that evidence ownership of either foreign or domestic securities.
Generally, ADRs in registered form are designed for use in the United States
securities markets, EDRs and CDRs in bearer form are designed for use in Europe,
and GDRs in bearer form are designed for use outside the United States.
These securities may be purchased through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of the
underlying security and a depositary. A depositary may establish an unsponsored
facility without participation by the issuer of the deposited security. Holders
of unsponsored depositary receipts generally bear all the costs of such
facilities and the depositary of an unsponsored facility frequently is under no
obligation to distribute shareholder communications received from the issuer of
the deposited security or to pass through voting rights to the holders of such
receipts in respect of the deposited securities.
Convertible Securities. (All Funds) Convertible securities may be converted
at either a stated price or stated rate into underlying shares of common stock.
Convertible securities have characteristics similar to both fixed-income and
equity securities. 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.
Although to a lesser extent than with fixed-income securities, 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. 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.
Convertible securities provide for a stable stream of income with generally
higher yields than common stocks, but there can be no assurance of current
income because the issuers of the convertible securities may default on their
obligations. 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
because securities prices fluctuate. Convertible securities generally offer
lower interest or dividend yields than non-convertible securities of similar
quality because of the potential for capital appreciation.
Closed-End Investment Companies. (Dreyfus Premier International Value Fund
only) The Fund may invest in securities issued by closed-end investment
companies. Under the 1940 Act, the Fund's investment in such securities, subject
to certain exceptions, currently is limited to (i) 3% of the total voting stock
of any one investment company, (ii) 5% of the Fund's total assets with respect
to any one investment company and (iii) 10% of the Fund's total assets in the
aggregate. Investments in the securities of other investment companies may
involve duplication of advisory fees and certain other expenses.
Foreign Government Obligations; Securities of Supranational Entities. (All
Funds) A Fund may invest in obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by the Manager to be of comparable quality
to the other obligations in which the Fund may invest. Such securities also
include debt obligations of supranational entities. Supranational entities
include international organizations designated or supported by governmental
entities to promote economic reconstruction or development and international
banking institutions and related government agencies. Examples include the
International Bank for Reconstruction and Development (the World Bank), the
European Coal and Steel Community, the Asian Development Bank and the
InterAmerican Development Bank.
Warrants. (Dreyfus Premier Value Fund only) 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. The Fund may invest up to 2% of its net assets in
warrants, except that this limitation does not apply to warrants purchased by
the Fund that are sold in units with, or attached to, other securities.
Zero Coupon Securities. (Dreyfus Premier Value Fund only) 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. Zero coupon securities also are 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 holders during its life and is sold at a
discount to its face value at maturity. 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.
Illiquid Securities. (All Funds) A 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. These securities may include securities that are not readily
marketable, such as 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 privately negotiated, non-exchange
traded options 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 at a price the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected.
Money Market Instruments. (All Funds) When the Manager determines that
adverse market conditions exist, a Fund may adopt a temporary defensive position
and invest some or all of its assets in money market instruments, including U.S.
Government securities, repurchase agreements, bank obligations and commercial
paper. A Fund also may purchase money market instruments when it has cash
reserves or in anticipation of taking a market position.
Investment Techniques
The following information supplements and should be read in conjunction
with each Fund's Prospectus.
Leverage. (All Funds) Leveraging (that is, buying securities using borrowed
money) exaggerates the effect on net asset value of any increase or decrease in
the market value of a Fund's portfolio. These borrowings will be subject to
interest costs which may or may not be recovered by appreciation of the
securities purchased; in certain cases, interest costs may exceed the return
received on the securities purchased. For borrowings for investment purposes,
the 1940 Act requires a Fund to maintain continuous asset coverage (total assets
including borrowings, less liabilities exclusive of borrowings) of 300% of the
amount borrowed. If the required 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 amount of its borrowings 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 pay a commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.
A Fund may enter into reverse repurchase agreements with banks, brokers or
dealers. This form of borrowing involves 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. Except for these
transactions, a Fund's borrowings generally will be unsecured.
Although Dreyfus Premier International Value Fund may borrow money for
leveraging as described above, it currently intends to borrow money only for
temporary or emergency (not leveraging) purposes, in an amount up to 15% of the
value of its total assets (including the amount borrowed) valued at the lesser
of cost or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While such borrowings exceed 5% of its total assets,
Dreyfus Premier International Value Fund will not make any additional
investments.
Short-Selling. (Dreyfus Premier Value Fund only) In these transactions, the
Fund sells a security it does not own in anticipation of a decline in the market
value of the security. To complete the transaction, the Fund must borrow the
security to make delivery to the buyer. The Fund is obligated to replace the
security borrowed by purchasing it subsequently 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, which would result in a loss or gain,
respectively.
The Fund also may make short sales "against the box," in which the Fund
enters into a short sale of a security it owns. Securities will not 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.
Until the Fund closes its short position or replaces the borrowed security,
it will: (a) segregate permissible liquid assets in an amount that, together
with the amount deposited with the broker as collateral, always equals the
current value of the security sold short; or (b) otherwise cover its short
position.
Lending Portfolio Securities. (All Funds) A Fund may lend securities from
its portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. In connection with such
loans, the Fund continues to be entitled to payments in amounts equal to the
dividends, interest or other distributions payable on the loaned securities
which affords the Fund an opportunity to earn interest on the amount of the loan
and at the same time to earn income on the loaned securities' collateral. Loans
of portfolio securities may not exceed 33-1/3% of the value of the Fund's total
assets, and 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. Such loans are terminable by the Fund 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. 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.
Although Dreyfus Premier International Value Fund may lend its portfolio
securities as described above, it currently has no intention of engaging in such
transactions.
Foreign Currency Transactions. (All Funds) A Fund may enter into foreign
currency transactions for a variety of purposes, including: to fix in U.S.
dollars, between trade and settlement date, the value of a security the Fund has
agreed to buy or sell; to hedge the U.S. dollar value of securities the Fund
already owns, particularly if it expects a decrease in the value of the currency
in which the foreign security is denominated; or to gain exposure to the foreign
currency in an attempt to realize gains.
Foreign currency transactions may involve, for example, a Fund's purchase
of foreign currencies for U.S. dollars or the maintenance of short positions in
foreign currencies. A short position would involve the Fund agreeing to exchange
an amount of a currency it did not currently own for another currency at a
future date in anticipation of a decline in the value of the currency sold
relative to the currency the Fund contracted to receive. A Fund's success in
these transactions will depend principally on the Manager's ability to predict
accurately the future exchange rates between foreign currencies and the U.S.
dollar.
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 the 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 United States or abroad.
Derivatives. (All Funds) A Fund may invest in, or enter into, derivatives,
such as options and futures, for a variety of reasons, including to hedge
certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for the Fund to
invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular derivative and the
portfolio as a whole. Derivatives permit a Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level of
risk, or change the character of the risk, of its portfolio by making
investments in specific securities. However, derivatives may entail investment
exposures that are greater than their cost would suggest, meaning that a small
investment in derivatives could have a large potential impact on a Fund's
performance.
If a Fund invests in derivatives at inopportune times or judges market
conditions incorrectly, such investments may lower the Fund's return or result
in a loss. A Fund also could experience losses if its derivatives were poorly
correlated with its other investments, or if the Fund were unable to liquidate
its position because of an illiquid secondary market. The market for many
derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
derivatives.
Although neither the Company nor any Fund will be a commodity pool, certain
derivatives subject the Funds to the rules of the Commodity Futures Trading
Commission which limit the extent to which a Fund can invest in such
derivatives. A Fund may invest in futures contracts and options with respect
thereto for hedging purposes without limit. However, no Fund may invest in such
contracts and options for other purposes if the sum of the amount of initial
margin deposits and premiums paid for unexpired options with respect to such
contracts, other than for bona fide hedging purposes, exceeds 5% of the
liquidation value of the Fund's assets, after taking into account unrealized
profits and unrealized losses on such contracts and options; 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% limitation.
Derivatives may be purchased on established exchanges or through privately
negotiated transactions referred to as over-the-counter derivatives.
Exchange-traded derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such derivatives. This guarantee usually
is supported by a daily variation margin system operated by the clearing agency
in order to reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated with
derivatives purchased on an exchange. By contrast, no clearing agency guarantees
over-the-counter derivatives. Therefore, each party to an over-the-counter
derivative bears the risk that the counterparty will default. Accordingly, the
Manager will consider the creditworthiness of counterparties to over-the-counter
derivatives in the same manner as it would review the credit quality of a
security to be purchased by a Fund. Over-the-counter derivatives are less liquid
than exchange-traded derivatives since the other party to the transaction may be
the only investor with sufficient understanding of the derivative to be
interested in bidding for it.
Futures Transactions--In General. (All Funds) A Fund may enter into futures
contracts in U.S. domestic markets, or on exchanges located outside the United
States. Foreign markets may offer advantages such as trading opportunities or
arbitrage possibilities not available in the United States. Foreign markets,
however, may have greater risk potential than domestic markets. For example,
some foreign exchanges are principal markets so that no common clearing facility
exists and an investor may look only to the broker for performance of the
contract. In addition, any profits that a Fund might realize in trading could be
eliminated by adverse changes in the currency exchange rate, or the Fund could
incur losses as a result of those changes. Transactions on foreign exchanges may
include commodities which are traded on domestic exchanges or those which are
not. Unlike trading on domestic commodity exchanges, trading on foreign
commodity exchanges is not regulated by the Commodity Futures Trading
Commission.
Engaging in these transactions involves risk of loss to a Fund which could
adversely affect the value of the Fund's net assets. Although each 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 trading 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.
Successful use of futures by a Fund also is subject to the Manager's
ability to predict correctly movements in the direction of the relevant market
and, to the extent the transaction is entered into for hedging purposes, to
ascertain the appropriate correlation between the position being hedged and the
price movements of the futures contract. For example, if a Fund uses futures to
hedge against the possibility of a decline in the market value of securities
held in its portfolio and the prices of such securities instead increase, 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. A
Fund may have to sell such securities at a time when it may be disadvantageous
to do so.
Pursuant to regulations and/or published positions of the Securities and
Exchange Commission, a Fund may be required to segregate permissible liquid
assets to cover its obligations relating to its transactions in derivatives. To
maintain this required cover, the Fund may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate a
derivative position at a reasonable price. In addition, the segregation of such
assets will have the effect of limiting the Fund's ability otherwise to invest
those assets.
Specific Futures Transactions. A Fund may purchase and sell stock index futures
contracts. A stock index future obligates a Fund to pay or receive an amount of
cash equal to a fixed dollar amount specified in the futures contract multiplied
by the difference between the settlement price of the contract on the contract's
last trading day and the value of the index based on the stock prices of the
securities that comprise it at the opening of trading in such securities on the
next business day.
A Fund may purchase and sell currency futures. A foreign currency future
obligates the Fund to purchase or sell an amount of a specific currency at a
future date at a specific price.
A Fund may purchase and sell interest rate futures contracts. An interest
rate future obligates the Fund to purchase or sell an amount of a specific debt
security at a future date at a specific price.
Options--In General. (All Funds) A Fund may invest up to 5% of its assets,
represented by the premium paid, in the purchase of call and put options. A Fund
may write (i.e., sell) covered call and put option contracts to the extent of
20% of the value of its net assets at the time such option contracts are
written. A call option gives the purchaser of the option the right to buy, and
obligates the writer to sell, the underlying security or securities at the
exercise price at any time during the option period, or at a specific date.
Conversely, a put option gives the purchaser of the option the right to sell,
and obligates the writer to buy, the underlying security or securities at the
exercise price at any time during the option period, or at a specific date.
A covered call option written by a Fund is a call option with respect to
which the Fund owns the underlying security or otherwise covers the transaction
by segregating permissibly liquid assets. A put option written by a Fund is
covered when, among other things, the Fund segregates permissible liquid assets
having a value equal to or greater than the exercise price of the option to
fulfill the obligation undertaken. The principal reason for writing covered call
and put options is to realize, through the receipt of premiums, a greater return
than would be realized on the underlying securities alone. A Fund receives a
premium from writing covered call or put options which it retains whether or not
the option is exercised.
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 of the
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, a 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.
Specific Options Transactions. A Fund may purchase and sell call and put options
in respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or traded
in the over-the-counter market. An option on a stock index is similar to an
option in respect of specific securities, except that settlement does not occur
by delivery of the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than in the case of a call, or less than in the
case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.
A Fund may purchase and sell call and put options on foreign currency.
These options convey the right to buy or sell the underlying currency at a price
which is expected to be lower or higher than the spot price of the currency at
the time the option is exercised or expires.
A 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 a 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 a Fund with another party of cash flows based upon the performance
of an index or a portion of an index of securities which usually includes
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.
Successful use by a Fund of options will be subject to the ability of the
Manager to predict correctly movements in the prices of individual stocks, the
stock market generally, foreign currencies or interest rates. To the extent such
predictions are incorrect, a Fund may incur losses.
Future Developments. (All Funds) A Fund may take advantage of opportunities
in the area of options and futures contracts and options on futures contracts
and any other derivatives 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. (All Funds) A Fund may purchase securities on a
forward commitment or when-issued basis, which means that delivery and payment
take place a number of days after the date of the commitment to purchase. The
payment obligation and the interest rate receivable on a forward commitment or
when-issued security are fixed when the Fund enters into the commitment but the
Fund does not make a payment until it receives delivery from the counterparty.
The Fund will commit 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 segregate
permissible liquid assets at least equal at all times to the amount of the
Fund's purchase commitments.
Securities purchased on a forward commitment or when-issued basis are
subject to changes in value (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 forward commitment or when-issued basis may expose a Fund to
risks because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a forward commitment or 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. Purchasing securities on a forward commitment or when-issued
basis when a 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.
Investment Considerations and Risks
Foreign Securities. (All Funds) 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.
Because evidences of ownership of foreign securities usually are held
outside the United States, a Fund investing in such securities will be subject
to additional risks which include possible adverse political and economic
developments, seizure or nationalization of foreign deposits and adoption of
governmental restrictions which might adversely affect or restrict the payment
of principal and interest on the foreign securities to investors located outside
the country of the issuer, whether from currency blockage or otherwise.
Moreover, foreign securities held by a Fund may trade on days when the Fund does
not calculate its net asset value and thus affect the Fund's net asset value on
days when investors have no access to the Fund.
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.
Lower Rated Securities. (Dreyfus Premier Value Fund only) The Fund may
invest up to 35% of its net assets in higher yielding (and, therefore, higher
risk) debt securities, such as those rated below Baa by Moody's Investors
Service, Inc. ("Moody's") and below BBB by Standard & Poor's Ratings Group
("S&P"), Fitch IBCA, Inc. ("Fitch") and Duff & Phelps Credit Rating Co. ("Duff,"
and with the other rating agencies, the "Rating Agencies") and as low as Caa by
Moody's or CCC by S&P, Fitch or Duff (commonly known as junk bonds). They may be
subject to certain risks and to greater market fluctuations than lower yielding
investment grade securities. See "Appendix" for a general description of the
Rating Agencies' 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.
You should be aware that the market values of many of these securities tend
to be more sensitive to economic conditions that are higher rated securities and
will fluctuate over time. These securities generally are considered by the
Rating Agencies to be, on balance, 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 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, 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 Fund may be able to sell such securities only to a limited
number of dealers or institutional investors. To the extent a secondary trading
market for these securities 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.
These securities may be particularly susceptible to economic downturns. It
is likely that an economic recession could disrupt severely the market for such
securities and may have an adverse impact on the value of such securities. In
addition, it is likely that any such economic downturn could adversely affect
the ability of the issuers of such securities to repay principal and pay
interest thereon and increase the incidence of default for such securities.
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.
Simultaneous Investments. (All Funds) Investment decisions for each Fund
are made independently from those of the other investment companies advised by
the Manager. If, however, such other investment companies desire to invest in,
or dispose of, the same securities as a 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.
Investment Restrictions
Each Fund's investment objective is a fundamental policy, which cannot be
changed without approval by the holders of a majority (as defined in the 1940
Act) of the Fund's outstanding voting shares. In addition, the Funds have
adopted certain investment restrictions as fundamental policies and certain
other investment restrictions as non-fundamental policies, as described below.
Dreyfus Premier Value Fund only. 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 1940
Act) of the Fund's outstanding voting shares. Investment restriction number 14
is not a fundamental policy and may be changed by vote of a majority of the
Company's Board members at any time. Dreyfus Premier Value 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 Company 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 1940 Act (which
currently limits borrowing to no more than 33-1/3% 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 Company's Board members.
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.
* * *
Dreyfus Premier International Value Fund only. The Fund has adopted
investment restrictions numbered 1 through 10 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined in
the 1940 Act) of the Fund's outstanding voting shares. Investment restrictions
numbered 11 and 12 are not fundamental policies and may be changed by vote of a
majority of the Company's Board members at any time. Dreyfus Premier
International Value Fund may not:
1. Invest more than 5% of its assets in the obligations of any single
issuer, except that up to 25% of the value of the Fund's total assets may be
invested, and securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities may be purchased, without regard to any such
limitation.
2. Hold more than 10% of the outstanding voting securities of any single
issuer. This Investment Restriction applies only with respect to 75% of the
Fund's total assets.
3. Invest more than 25% of the value of its total assets in the securities
of issuers in any single industry, provided that there shall be no limitation on
the purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
4. Invest in commodities, except that the Fund may purchase and sell
options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
5. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but the Fund may purchase and
sell securities that are secured by real estate or issued by companies that
invest or deal in real estate or real estate investment trusts.
6. Borrow money, except to the extent permitted under the 1940 Act (which
currently limits borrowing to no more than 33-1/3% 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. Make loans to others, except through the purchase of debt obligations
and the entry into repurchase agreements. 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
Company's Board.
8. 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.
9. Issue any senior security (as such term is defined in Section 18(f) of
the 1940 Act), except to the extent the activities permitted in Investment
Restriction Nos. 4, 6 and 11 may be deemed to give rise to a senior security.
10. Purchase securities on margin, but the Fund may make margin deposits in
connection with transactions in options, forward contracts, futures contracts,
including those relating to indices, and options on futures contracts or
indices.
11. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.
12. 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 of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
MANAGEMENT OF THE COMPANY
The Company's Board is responsible for the management and supervision of
each Fund. The Board approves all significant agreements with those companies
that furnish services to the Fund. These companies are as follows:
The Dreyfus Corporation..............Investment Adviser
Premier Mutual Fund Services, Inc....Distributor
Dreyfus Transfer, Inc................Transfer Agent
Mellon Bank, N.A.....................Custodian for Dreyfus Premier Value Fund
The Bank of New York.................Custodian for Dreyfus Premier International
Value Fund
Board members and officers of the Company, together with information as to
their principal business occupations during at least the last five years, are
shown below.
Board Members of the Company
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of the
Board of various funds in the Dreyfus Family of Funds. He also is a
director of The Muscular Dystrophy Association, HealthPlan Services
Corporation, a provider of marketing, administrative and risk management
services to health and other benefit programs, Carlyle Industries, Inc.
(formerly, Belding Heminway Company, Inc.), a button packager and
distributor, Century Business Services, Inc. (formerly, International
Alliance Services, Inc.), a provider of various outsourcing functions for
small and medium sized companies, and QuickCat.com, Inc., a private company
engaged in the development of high speed movement, routing, storage and
encryption of data across all modes of data transport. For more than five
years prior to January 1995, 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 Company's distributor. From
August 1994 until December 31, 1994, he was a director of Mellon Financial
Corporation. He is 56 years old and his address is 200 Park Avenue, New
York, New York 10166.
DAVID W. BURKE, Board Member. Board member of various funds in the Dreyfus
Family of Funds. Chairman of the Broadcasting Board of Governors, an
independent board within the United States Information Agency, from August
1995 to November 1998. From August 1994 through December 31, 1994, he was a
consultant to the Manager, and from October 1990 to August 1994, he was
Vice President and Chief Administrative Officer of the Manager. From 1977
to 1990, he 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. He is 63 years old and his address is 197 Eighth
Street, Charleston, Massachusetts 02109.
DIANE DUNST, Board Member. 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. She is 60
years old and her address is 1172 Park Avenue, New York, New York 10128.
ROSALIND GERSTEN JACOBS, Board Member. Marketing and Merchandising Consultant.
From 1977 to 1998 , she was a 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.
She is 74 years old and her address is 19 East 72nd Street, New York, New
York 10021.
JAY I. MELTZER, Board Member. Physician engaged in private practice
specializing in internal medicine. He is a Clinical Professor of Medicine
at Columbia University, College of Physicians and Surgeons; an Adjunct
Clinical Professor of Medicine at Cornell Medical College; and a Consultant
in Medicine at Memorial Sloan Ketting Cancer Center. He teaches in the
section on Society and Medicine and he supervises a group of medical ethics
Fellows. He writes a monthly commentary on medical affairs for the Medical
Herald. He is 71 years old and his address is 903 Park Avenue, New York,
New York 10021.
DANIEL ROSE, Board Member. Chairman and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and management
firm. In July 1994, he received a Presidential appointment to serve as a
Director and Vice Chairman of the Baltic-American Enterprise Fund, which
makes equity investments and loans and provides technical business
assistance to new business concerns in the Baltic states. He is also Past
Chairman of the Housing Committee of The Real Estate Board of New York,
Inc. and is President of the Harlem Educational Activities Fund, Inc. He is
70 years old and his address is c/o Rose Associates, Inc., 200 Madison
Avenue, New York, New York 10016.
WARREN B. RUDMAN, Board Member. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison. He also serves as a director of
Prime Succession, Inc., Collins & Aikman Corporation, Chubb Corporation,
and the Raytheon Company; and as a trustee of Boston College. He also
serves on the President's Foreign Intelligence Advisory Board (as Vice
Chairman through February 1998 and, currently, as Chairman), and a member
of the Senior Advisory Board of the Institute of Politics of the Kennedy
School of Government at Harvard University. From January 1981 to January
1993, Mr. Rudman served as a United States Senator from the state of New
Hampshire. From January 1993 to December 1994, Mr. Rudman served as
Chairman of the Federal Reserve Bank of Boston. He is 69 years old and his
address is c/o Paul, Weiss, Rifkind, Wharton & Garrison, 1615 L. Street,
N.W., Washington, D.C. 20036.
SANDER VANOCUR, Board Member. Since January 1992, Mr. Vanocur has been the
President of Old Owl Communications, a full-service communications firm.
From May 1995 to June 1996, he was a Professional in Residence at the
Freedom Forum in Arlington, VA and from January 1994 to May 1995, he served
as a Visiting Professional Scholar at the Freedom Forum First Amendment
Center at Vanderbilt University; and from November 1989 to November 1995,
he was 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 1977 to December 1991, he was Anchor of the ABC News
program "Business World," a weekly business program on the ABC television
network. Mr. Vanocur joined ABC News in 1977. He is 71 years old and his
address is 2626 Sycamore Canyon, Santa Barbara, CA 93108.
The Company has a standing nominating committee comprised of its Board
members who are not "interested persons" of the Company, as defined in the 1940
Act. The function of the nominating committee is to select and nominate all
candidates who are not "interested persons" of the Company for election to the
Company's Board.
The Company 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. Emeritus Board members are
entitled to receive an annual retainer and a per meeting fee of one-half the
amount paid to them as Board members. The aggregate amount of compensation paid
to each Board member by the Company for the fiscal year ended October 31, 1999,
and by all funds in the Dreyfus Family of Funds for which such person is a Board
member (the number of which is set forth in parenthesis next to each Board
member's total compensation) for the year ended December 31, 1999, were as
follows:
Total Compensation From
Aggregate Compensation Company and Fund Complex Paid
Name of Board Member From Company** to Board Member
Joseph S. DiMartino $6,250 $642,177(189)
David W. Burke $5,000 $228,500(59)
Diane Dunst $4,500 $ 37,750(16)
Rosalind Gersten Jacobs $5,000 $ 92,250(44)
Jay I. Meltzer $4,500 $ 37,750(16)
Daniel Rose $4,500 $ 78,625(31)
Warren B. Rudman $4,500 $ 68,000(25)
Sander Vanocur $5,000 $ 78,625(31)
- --------------------------------------------------------------------------------
* Represents the number of separate portfolios comprising the investment
companies in the Fund Complex, including the Funds, for which the Board
member serves.
** Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $2,683 for all Board members as a group.
Officers of the Company
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive Officer,
Chief Compliance Officer and a director of the Distributor and Funds
Distributor, Inc., the ultimate parent of which is Boston Institutional
Group, Inc., and an officer of other investment companies advised or
administered by the Manager. She is 42 years old.
MARGARET W. CHAMBERS, Vice President and Secretary. Senior Vice President and
General Counsel of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From August
1996 to March 1998, she was Vice President and Assistant General Counsel
for Loomis, Sayles & Company, L.P. From January 1986 to July 1996, she was
an associate with the law firm of Ropes & Gray. She is 40 years old.
*FREDERICK C. DEY, Vice President and Assistant Treasurer and Assistant
Secretary. Vice President, New Business Development of Funds Distributor,
Inc., since September 1994, and an officer of other investment companies
advised or administered by the Manger. He is 37 years old.
STEPHANIE D. PIERCE, Vice President, Assistant Secretary and Assistant
Treasurer. Vice President of the Distributor and Funds Distributor, Inc.,
and an officer of other investment companies advised or administered by the
Manager. From April 1997 to March 1998, she was employed as a Relationship
Manager with Citibank, N.A. From August 1995 to April 1997, she was an
Assistant Vice President with Hudson Valley Bank, and from September 1990
to August 1995, she was Second Vice President with Chase Manhattan Bank.
She is 31 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President of the
Distributor and Funds Distributor, Inc., and an officer of other investment
companies advised or administered by the Manager. From September 1989 to
July 1994, she was an Assistant Vice President and Client Manager for The
Boston Company, Inc. She is 35 years old.
GEORGE A. RIO, Vice President and Assistant Treasurer. Executive Vice President
and Client Service Director of Funds Distributor, Inc., and an officer of
other investment companies advised or administered by the Manager. From
June 1995 to March 1998, he was Senior Vice President and Senior Key
Account Manager for Putnam Mutual Funds. From May 1994 to June 1995, he was
Director of Business Development for First Data Corporation. He is 45 years
old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., and an officer of other investment
companies advised or administered by the Manager. He is 36 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc., and an officer of other investment
companies advised or administered by the Manager. He is 30 years old.
CHRISTOPHER J. KELLEY, Vice President and Assistant Secretary. Vice President
and Senior Associate General Counsel of the Distributor and Funds
Distributor, Inc., and an officer of other investment companies advised or
administered by the Manager. From April 1994 to July 1996, he was Assistant
Counsel at Forum Financial Group. He is 35 years old.
KATHLEEN K. MORRISEY, Vice President and Assistant Secretary. Manager of
Treasury Services Administration of Funds Distributor, Inc., and an officer
of other investment companies advised or administered by the Manager. From
July 1994 to November 1995, she was a Fund Accountant for Investors Bank &
Trust Company. She is 27 years old.
ELBA VASQUEZ, Vice President and Assistant Secretary. Assistant Vice President
of Funds Distributor, Inc., and an officer of other investment companies
advised or administered by the Manager. From March 1990 to May 1996, she
was employed by U.S. Trust Company of New York where she held various sales
and marketing positions. She is 38 years old.
*KAREN JACOPPO-WOOD, Vice President and Assistant Secretary. Vice President and
Senior Counsel of Funds Distributor, Inc., since February 1997, and an
officer of other investment companies advised or administered by the
Manager. From June 1994 to January 1996, she was Manager of SEC
Registration at Scudder, Stevens & Clark, Inc. She is 33 years old.
The address of each officer of the Company is 200 Park Avenue, New York,
New York 10166, except those officers indicated by (*), whose address is 60
State Street, Boston, Massachusetts 02109.
The Company's Board members and officers, as a group, owned less than 1% of
each Fund's voting securities outstanding on February 16, 2000.
The following shareholders owned of record 5% or more of the outstanding
voting securities of the indicated Funds on February 16, 2000: Premier Value
Fund: Class B - MLPF&S for the Sole Benefit of its customers, Attn: Fund
Administration, Jacksonville, FL (10.71%); Class C - MLFP&S, for the sole
benefit of its customers, Attn: Fund Administration, Jacksonville, FL (46.69%);
Class R - Old Kent Bank, FBO Jo Pierce 4F, Attn: Mutual Fund Specialist, Grand
Rapids MI (41.92%); The Dreyfus Trust Company, Custodian, FBO Gayle Striar
Herman under 403(b)(7) Plan, White Plains, NY (31.57%); Premier Mutual Fund
Services, Inc., Boston MA (24.57%); Premier International Value Fund: Class A -
MBIC c/o Mellon Bank, Wilmington, DE (85.22%); Class B - MBIC c/o Mellon Bank,
Wilmington, DE (65.77%); MLPF&S for the sole benefit of its customers, Attn:
Fund Administration, Jacksonville, FL (7.30%); Class C - MBIC c/o Mellon Bank,
Wilmington, DE (80.79%); First Union Securities, Inc., Michael M. Frank and
Roberta S. Frank Trust, Milwaukee, WI (13.74%); Class R - BOST & Co, Pittsburgh,
PA (44.61%); MBIC c/o Mellon Bank, Wilmington, DE (49.56%). A shareholder that
beneficially owns, directly or indirectly, more than 25% of a Fund's voting
securities may be deemed a "control person" (as defined in the 1940 Act) of the
Fund.
MANAGEMENT ARRANGEMENTS
Investment Adviser. The Manager is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation
("Mellon"). 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.
The Manager provides management services pursuant to a Management Agreement
(the "Agreement") between the Company and the Manager. As to each Fund, the
Agreement is subject to annual approval by (i) the Company's Board or (ii) vote
of a majority (as defined in the 1940 Act) of the outstanding voting securities
of such Fund, provided that in either event the continuance also is approved by
a majority of the Board members who are not "interested persons" (as defined in
the 1940 Act) of the Company or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. As to each Fund, the
Agreement is terminable without penalty, on 60 days' notice, by the Company's
Board or by vote of the holders of a majority of such Fund's shares, or, on not
less than 90 days' notice, by the Manager. The Agreement will terminate
automatically, as to the relevant Fund, in the event of its assignment (as
defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Christopher M. Condron, Chairman of the Board and Chief Executive Officer,
Stephen E. Canter, President, Chief Operating Officer, Chief Investment Officer
and a director; Thomas F. Eggers, Vice Chairman-Institutional and a director;
Ronald P. O'Hanley III, Vice Chairman; J. David Officer, Vice Chairman and a
director; Lawrence S. Kash, Vice Chairman, William T. Sandalls, Jr., Executive
Vice President; Stephen R. Byers, Senior Vice President, Mark N. Jacobs, Vice
President, General Counsel and Secretary; Diane P. Durnin, Vice
President-Product Development; Patrice M. Kozlowski, Vice President--Corporate
Communications; Mary Beth Leibig, Vice President--Human Resources; Ray Van Cott,
Vice President--Information Systems; Theodore A. Schachar, Vice President-Tax;
Wendy Strutt, Vice President; Richard Terres, Vice President; William H.
Maresca, Controller; James Bitetto, Assistant Secretary; Steven F. Newman,
Assistant Secretary; and Mandell L. Berman, Burton C. Borgelt, Steven G.
Elliott, Martin C. McGuinn, Richard W. Sabo and Richard F. Syron, directors.
Mellon Bank, N.A., the Manager's parent, and its affiliates may have
deposit, loan and commercial banking or other relationships with the issuers of
securities purchased by a Fund. The Manager has informed the Company that in
making its investment decisions it does not obtain or use material inside
information that Mellon Bank, N.A. or its affiliates may possess with respect to
such issuers.
The Manager has a personal securities trading policy (the "Policy") which
restricts the personal securities transactions of its employees. Its primary
purpose is to ensure that personal trading by the Manager's employees does not
disadvantage any fund managed by the Manager. Under the Policy, the Manager's
employees must preclear personal transactions in securities not exempt under the
Policy. In addition, the Manager's employees must report their personal
securities transactions and holdings, which are reviewed for compliance with the
Policy. In that regard, the Manager's portfolio managers and other investment
personnel also are subject to the oversight of Mellon's Investment Ethics
Committee. Portfolio managers and other investment personnel of the Manager who
comply with the Policy's preclearance and disclosure procedures and the
requirements of the Committee may be permitted to purchase, sell or hold
securities which also may be or are held in fund(s) they manage or for which
they otherwise provide investment advice.
The Manager manages each Fund's investments in accordance with the stated
policies of such Fund, subject to the approval of the Company's Board. The
Manager is responsible for investment decisions, and provides the Funds with
portfolio managers who are authorized by the Board to execute purchases and
sales of securities. Dreyfus Premier Value Fund's portfolio managers are Timothy
M. Ghriskey and Douglas Ramos. Dreyfus Premier International Value Fund's
portfolio managers are Sandor Cseh and D. Kirk Henry. The Manager also maintains
a research department with a professional staff of portfolio managers and
securities analysts who provide research services for the Funds and for other
funds advised by the Manager.
The Manager maintains office facilities on behalf of the Company, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Company. The Manager may pay the Distributor for shareholder
services from the Manager's own assets, including past profits but not including
the management fees paid by the Funds. The Distributor may use part or all of
such payments to pay Service Agents (as defined below) in respect of these
services. The Manager also may make such advertising and promotional
expenditures, using its own resources, as it from time to time deems
appropriate.
All expenses incurred in the operation of the Company are borne by the
Company, except to the extent specifically assumed by the Manager. The expenses
borne by the Company include: organizational costs, 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 or any of its affiliates, Securities and Exchange
Commission fees, state Blue Sky notification/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 Company's existence, costs of independent
pricing service, 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. In addition, Class B, Class C, and
Class T shares are subject to an annual distribution fee and Class A, Class B,
Class C, and Class T shares are subject to an annual service fee. See
"Distribution Plan and Shareholder Services Plan." Expenses attributable to a
particular Fund are charged against the assets of that Fund; other expenses of
the Company are allocated among the Funds on the basis determined by the Board,
including, but not limited to, proportionately in relation to the net assets of
each Fund.
As compensation for the Manager's services to the Company, the Company has
agreed to pay the Manager a monthly management fee at the annual rate of 0.75%
of the value of Dreyfus Premier Value Fund's average daily net assets, and 1.00%
of the value of Dreyfus Premier International Value Fund's average daily net
assets. For the fiscal years ended October 31, 1997, 1998, and 1999, the
management fees paid by the Company for Dreyfus Premier Value Fund amounted to
$1,996,529, $1,847,539, and $1,646,180, respectively. For the period March 31,
1998 (commencement of operations) through October 31, 1998, and for the fiscal
year ended October 31, 1999, the management fees payable by the Company for
Dreyfus Premier International Value Fund amounted $28,213 and $140,847,
respectively, which amounts were reduced in full in fiscal year 1998, so that no
management fee was actually paid to the Manager for fiscal 1998, and by $79,824
for the fiscal year ended October 31, 1999, resulting in $61,023 in management
fees actually being paid to the Manager for such period, each pursuant to
undertakings by the Manager then in fiscal years 1998 and 1999 so that no
management fee was paid to the Manager for fiscal years 1998 and 1999.
As to each Fund, 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 a Fund's net assets increases.
Distributor. Premier Mutual Fund Services, Inc., located at 60 State
Street, Boston, Massachusetts 02109, serves as each Fund's distributor on a best
efforts basis pursuant to an agreement with the Company which is renewable
annually.
With respect to Dreyfus Premier Value Fund, for the fiscal years ended
October 31, 1997, 1998, and 1999, the Distributor retained $14,319, $14,242, and
$0, respectively, from sales loads on Class A shares. For the same periods, the
Distributor retained $127,398, $91,346, and $90,351, respectively, from
contingent deferred sales charges ("CDSC") on Class B shares and $443, $914, and
$276 respectively, from the CDSC on Class C shares of Dreyfus Premier Value
Fund. With respect to Dreyfus Premier International Value Fund, for the period
from March 31, 1998 (commencement of operations) through October 31, 1998, and
for the fiscal year ended October 31, 1999, the Distributor retained $525 and
$0, respectively, from sales loads on Class A shares, $0 and $1,183,
respectively, from the CDSC on Class B shares, and $0 and $30, respectively,
from the CDSC on Class C shares. Neither Fund offered Class T Shares during the
fiscal year ended October 31, 1999.
The Distributor may pay dealers a fee based on 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 $1,000,000 ("Eligible Benefit Plans"). Generally, the fee paid
to dealers will not exceed 1% of the amount invested through such dealers. The
Distributor, however, may pay dealers a higher fee and 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 a Fund, including past profits or
any other source available to it.
The Distributor, at its expense, may provide promotional incentives to
dealers that sell shares of funds advised by the Manager which are sold with a
sales load. In some instances, these incentives may be offered only to certain
dealers who have sold or may sell significant amounts of shares.
Pursuant to an agreement between Dreyfus Service Corporation and the
Distributor, Dreyfus Service Corporation assumed the Distributor's
responsibility for paying commissions to Service Agents for selling Fund shares.
The proceeds of the CDSC and the Distribution Plan fees, in part, are paid to
Dreyfus Service Corporation to defray these expenses.
Transfer and Dividend Disbursing Agent and Custodian. Dreyfus Transfer,
Inc. (the "Transfer Agent"), a wholly-owned subsidiary of the Manager, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Company's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Company,
the Transfer Agent arranges for the maintenance of shareholder account records
for each Fund, the handling of certain communications between shareholders and
the Fund and the payment of dividends and distributions payable by the Fund. For
these services, the Transfer Agent receives a monthly fee computed on the basis
of the number of shareholder accounts it maintains for each Fund during the
month, and is reimbursed for certain out-of-pocket expenses.
Mellon Bank, N.A., the Manager's parent, One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, acts as custodian of the investments of Dreyfus
Premier Value Fund. The Bank of New York, 90 Washington Street, New York, New
York 10286, acts as custodian of the investments of Dreyfus Premier
International Value Fund. Neither custodian has any part in determining the
investment policies of a Fund or which securities are to be purchased or sold by
the Fund. Under separate custody agreements with the Company, each custodian
holds the relevant Fund's securities and keeps all necessary accounts and
records. For its custody services, each custodian receives a monthly fee based
on the market value of the relevant Fund's assets held in custody and receives
certain securities transactions charges.
HOW TO BUY SHARES
General. Class A shares, Class B shares, Class C shares, and Class T 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 the Manager or any of its affiliates or subsidiaries,
directors of the Manager, Board members of a fund advised by the Manager,
including members of the Company'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, IRAs set up under a Simplified Employee Pension Plan
("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 Retirement 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. Stock certificates are issued only upon your written request. No
certificates are issued for fractional shares. The Company 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 the relevant Fund's Prospectus and this Statement of Additional
Information, and, to the extent permitted by applicable regulatory authority,
may charge their clients direct fees. You should consult your Service Agent in
this regard.
The minimum initial investment is $1,000. Subsequent investments must be at
least $100. However, the minimum initial investment is $750 for
Dreyfus-sponsored Keogh Plans, IRAs (including regular IRAs, spousal IRAs for a
non-working spouse, Roth IRAs, SEP-IRAs and rollover IRAs) and 403(b)(7) Plans
with only one participant and $500 for Dreyfus-sponsored Education IRAs, with no
minimum for subsequent purchases. The initial investment must be accompanied by
the Account Application. The Company reserves the right to offer Fund shares
without regard to minimum purchase requirements to employees participating in
certain qualified or non-qualified employee benefit plans or other programs
where contributions or account information can be transmitted in a manner and
form acceptable to the Company. The Company reserves the right to vary further
the initial and subsequent investment minimum requirements at any time.
The Internal Revenue Code of 1986, as amended (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 a Fund by a
Retirement Plan. Participants and plan sponsors should consult their tax
advisers for details.
Fund shares also may be purchased through Dreyfus-Automatic Asset
Builder(R), 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.
Fund shares are sold on a continuous basis. Net asset value per share is
determined as of the close of trading on the floor of 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 floor of 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. Each 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 Company's
Board. For further information regarding the methods employed in valuing the
Funds' investments, see "Determination of Net Asset Value."
If an order is received in proper form by the Transfer Agent or other
entity authorized to receive orders on behalf of the Fund by the close of
trading on the floor of 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 floor of 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 floor of 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 dealers by the close of
trading on the floor of the New York Stock Exchange on any business day and
transmitted to the Distributor or its designee 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 floor of the New York
Stock Exchange on that day. Otherwise, the orders will be based on the next
determined public offering price. It is the dealer's responsibility to transmit
orders so that they will be received by the Distributor or its designee 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.
Class A Shares. The public offering price for Class A shares of each Fund
is the net asset value per share of that Class plus, except for shareholders
beneficially owning Class A shares of Dreyfus Premier Value Fund on November 30,
1996, a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
DEALERS'
AMOUNT OF TRANSACTION AS A % OF AS A % OF REALLOWANCE AS A
- ---------------------
OFFERING PRICE NET ASSET VALUE % OF OFFERING
PER SHARE PER SHARE PRICE
------------------- -------------------- -------------------
<S> <C> <C> <C>
Less than $50,000....................... 5.75 6.10 5.00
$50,000 to less than $100,000........... 4.50 4.70 3.75
$100,000 to less than $250,000.......... 3.50 3.60 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>
For shareholders who beneficially owned Class A shares of Dreyfus Premier
Value Fund on November 30, 1996, the public offering price for Class A shares of
such Fund 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'
AMOUNT OF TRANSACTION OFFERING PRICE NET ASSET VALUE REALLOWANCE AS A %
- ---------------------
PER SHARE PER SHARE OF 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 one year of purchase. Pursuant to an agreement
with the Distributor, Dreyfus Service Corporation may pay Service Agents an
amount up to 1% of the net asset value of Class A shares purchased by their
clients that are subject to a CDSC.
Set forth below is an example of the method of computing the offering price
of Class A shares of each Fund. The example assumes a purchase of Class A shares
of the Fund aggregating less than $50,000 subject to the schedule of sales
charges set forth above at a price based upon the net asset value of the Fund's
Class A shares on October 31, 1999:
Dreyfus Premier
International
Dreyfus Premier Value Fund
Value Fund
Net Asset Value per Share...... $22.00 $13.98
Per Share Sales Charge - 5.75%*
of offering price (6.10% of
net asset value per share)... $ 1.34 $ 0.85
------ ------
Per Share Offering Price to
the Public................... $23.34 $14.83
====== ======
- ---------------------
* Class A shares of Dreyfus Premier Value Fund purchased by shareholders
beneficially owning Class A shares of such Fund on November 30, 1996 are
subject to a different sales load schedule, as described above.
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 such shares) may purchase Class A shares
for themselves directly or pursuant to an employee benefit plan or other
program, or for their spouses or minor children, at net asset value, provided
they have furnished the Distributor with such information as it may request from
time to time in order to verify eligibility for this privilege. This privilege
also applies to full-time employees of financial institutions affiliated with
NASD member firms whose full-time employees are eligible to purchase Class A
shares at net asset value. In addition, Class A shares are offered at net asset
value to full-time or part-time employees of the Manager or any of its
affiliates or subsidiaries, directors of the Manager, Board members of a fund
advised by the Manager, including members of the Company's Board, or the spouse
or minor child of any of the foregoing.
Class A shares are 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, 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 Premier Family of Funds, or the Dreyfus Family of Funds, or certain
funds advised by Founders Asset Management LLC, 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 Premier Family of Funds or in the Dreyfus Family of
Funds, or certain funds advised by Founders Asset Management LLC, 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 Manager or its
affiliates. The purchase of Class A shares of a Fund must be made within 60 days
of such redemption and the shares redeemed must have been subject to an initial
sales charge or a contingent deferred sales charge.
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).
Class T Shares. The public offering price for Class T shares is the net
asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
Total Sales Load
-----------------------------------------
--------------------
Dealers'
As a % of offering As a % of Reallowance as of
price per share net asset value % of offering price
per share
Amount of Transaction
<S> <C> <C> <C> <C>
Less than $50,000........................... 4.50 4.70 4.00
$50,000 to less than $100,000............... 4.00 4.20 3.50
$100,000 to less than 250,000............... 3.00 3.10 2.50
$250,000 to less than 500,000............... 2.00 2.00 1.75
$500,000 to less than $1,000,000............ 1.50 1.50 1.25
$1,000,000 or more.......................... -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of Class T shares
purchased without an initial sales charge as part of an investment of at least
$1,000,000 and redeemed within one year of purchase. Pursuant to an agreement
with the Distributor, Dreyfus Service Corporation may pay Service Agents an
amount up to 1% of the net asset value of Class T shares purchased by their
clients that are subject to a CDSC. Because the expenses associated with Class A
shares will be lower than those associated with Class T shares, purchasers
investing $1,000,000 or more in the Fund (assuming ineligibility to purchase
Class R shares) generally will find it beneficial to purchase Class A shares
rather than Class T shares.
Set forth below is an example of the method of computing the offering price
of each Fund's Class T shares. The example assumes a purchase of Class T shares
of the Fund aggregating less than $50,000 subject to the schedule of sales
charges set forth above at the initial offering price on March 1, 2000 for Class
T shares of $12.50:
Net Asset Value per share............................................ $12.50
Per Share Sales Charge - 4.50% of offering price
(4.70% of net asset value per share)............................. $ .59
-------
Per Share Offering Price to Public................................... $13.09
======
Class T shares are offered at net asset value without a sales load to
employees participating in Eligible Benefit Plans. Class T 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, 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 Premier Family of Funds or the Dreyfus Family of Funds, or certain funds
advised by Founders, or certain other products made available by the Distributor
to such plans, or (b) invested all of its assets in certain funds in Dreyfus
Premier Family of Funds or the Dreyfus Family of Funds or certain funds advised
by Founders, or certain other products made available by the Distributor to such
plans.
Sales Loads--Class A and Class T. The scale of sales loads applies to
purchases of Class A and Class T 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 (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.
Dealer Reallowance -- Class A and Class T. The dealer reallowance provided
with respect to Class A and Class T shares may be changed from time to time but
will remain the same for all dealers. The Distributor, at its own expenses, may
provide additional promotional incentive to dealers that sell shares of funds
advised by the Manager which are sold with a sales load, such as Class A and
Class T shares. In some instances, these incentives may be offered only to
certain dealers who have sold or may sell significant amounts of such shares.
Right of Accumulation -- Class A and Class T Shares. Reduced sales loads
apply to any purchase of Class A and Class T shares, shares of other funds in
the Dreyfus Premier Family of Funds, shares of certain other funds advised by
the Manager or Founders which are sold with a sales load and shares acquired by
a previous exchange of such shares (hereinafter referred to as "Eligible
Funds"), by you and any related "purchaser" as defined above, where the
aggregate investment, including such purchase, is $50,000 or more. If, for
example, you previously purchased and still hold Class A shares, or shares of
any other Eligible Fund or combination thereof, with an aggregate current market
value of $40,000 and subsequently purchase Class A or Class T shares or shares
of an Eligible Fund having a current value of $20,000, the sales load applicable
to the subsequent purchase would be reduced to 4.5% of the offering price in the
case of Class A shares, or 4.0% of the offering paid in the case of Class T
shares. 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. Class A shares purchased by
shareholders beneficially owning Class A shares of Dreyfus Premier Value Fund on
November 30, 1996 are subject to a different sales load schedule, as described
above under "Class A Shares."
To qualify for reduced sales loads, at the time of purchase you or your
Service Agent must notify the Distributor if orders are made by wire, or the
Transfer Agent if orders are made by mail. The reduced sales load is subject to
confirmation of your holdings through a check of appropriate records.
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 in the relevant Fund's Prospectus and in this Statement of
Additional Information under "How to Redeem Shares--Contingent Deferred Sales
Charge--Class B Shares."
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. 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. The public offering price for Class C 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 redemptions of Class C shares
made within the first year of purchase. See "Class B Shares" above and "How to
Redeem Shares."
Class B and C Shares. Pursuant to an agreement with the Distributor,
Dreyfus Service Corporation compensates certain Service Agents for selling Class
B and Class C shares at the time of purchase from its own assets. The proceeds
of the CDSC and the distribution fee, in part, are used to defray these
expenses.
Class R Shares. The public offering for Class R shares is the net asset
value per share of that Class.
Dreyfus TeleTransfer Privilege. You may purchase shares by telephone if you
have checked the appropriate box and supplied the necessary information on the
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 a bank account maintained in
a domestic financial institution which is an Automated Clearing House ("ACH")
member may be so designated.
Dreyfus TeleTransfer purchase orders may be made at any time. Purchase
orders received by 4:00 p.m., New York time, on any day that the Transfer Agent
and the New York Stock Exchange are open for business will be credited to the
shareholder's Fund account on the next bank business day following such purchase
order. Purchase orders made after 4:00 p.m., New York time, on any day the
Transfer Agent and the New York Stock Exchange are open for business, or orders
made on Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's Fund
account on the second bank business day following such purchase order. To
qualify to use Dreyfus TeleTransfer Privilege, the initial payment for purchase
of shares must be drawn on, and redemption proceeds paid to, the same bank and
account as are 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 "How to Redeem Shares--Dreyfus TeleTransfer
Privilege."
Reopening an Account. You may reopen an account with a minimum investment
of $100 without filing a new Account Application during the calendar year the
account is closed or during the following calendar year, provided the
information on the old Account Application is still applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class B, Class C, and Class T shares are subject to a Distribution Plan and
Class A, Class B, Class C, and Class T shares are subject to a Shareholder
Services Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities and
Exchange Commission under the 1940 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 Company's Board has adopted such
a plan (the "Distribution Plan") with respect to each Fund's Class B, Class C,
and Class T shares, pursuant to which the Fund pays the Distributor for
distributing each such Class of shares a fee at the annual rate of 0.75% of the
value of the average daily net assets of Class B and Class C shares, and 0.25%
of the value of the average daily net assets of Class T shares. The Distributor
may pay one or more Service Agents in respect of advertising, marketing and
other distribution services and determines the amounts, if any, to be paid to
Service agents and the basis on which such payments are made. The Company's
Board believes that there is a reasonable likelihood that the Distribution Plan
will benefit each Fund and holders of its Class B, Class C, and Class T 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 for its review. In addition, the Distribution Plan provides that it may
not be amended to increase materially the costs which holders of a Fund's Class
B, Class C, or Class T shares may bear pursuant to the Distribution Plan without
the approval of the holders of such shares and that other material amendments of
the Distribution Plan must be approved by the Company's Board, and by the Board
members who are not "interested persons" (as defined in the 1940 Act) of the
Company and have no direct or indirect financial interest in the operation of
the Distribution Plan or in any agreements entered into in connection with the
Distribution Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. As to each Fund, 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. As to the relevant Class of shares
of a Fund, 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 in any agreements entered into in connection with the Distribution Plan or by
vote of the holders of a majority of such Class of shares.
For the fiscal year ended October 31, 1999, Dreyfus Premier Value Fund paid
the Distributor $301,614 with respect to Class B shares and $4,856 with respect
to Class C shares pursuant to the Distribution Plan. For the fiscal year ended
October 31, 1999, Dreyfus Premier International Value Fund paid the Distributor
$4,954 with respect to Class B shares and $3,856 with respect to Class C shares
pursuant to the Distribution Plan. Neither Fund offered Class T shares during
the fiscal year ended October 31, 1999.
Shareholder Services Plan. The Company has adopted a Shareholder Services
Plan with respect to each Fund, pursuant to which the Fund pays the Distributor
for the provision of certain services to the holders of the Fund's Class A,
Class B, Class C, and Class T shares a fee at the annual rate of 0.25% of the
value of the average daily net assets 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 such shareholder
accounts. Under the Shareholder Services Plan, the Distributor may make payments
to 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 material amendments must be approved by the Company's Board, and by the
Board members who are not "interested persons" (as defined in the 1940 Act) of
the Company 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. As to each Fund, 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. As to
the relevant Class of shares of a Fund, the Shareholder Services Plan is
terminable at any time by vote of a majority of the Board members 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 fiscal year ended October 31, 1999, Dreyfus Premier Value Fund paid
the Distributor $446,550 with respect to Class A shares, $100,538 with respect
to Class B shares, and $1,619 with respect to Class C shares pursuant to the
Shareholder Services Plan. For the fiscal year ended October 31, 1999, Dreyfus
Premier International Value Fund paid the Distributor $9,135 with respect to
Class A shares, $1,652 with respect to Class B shares, and $1,285 with respect
to Class C shares pursuant to the Shareholder Services Plan. Neither Fund
offered Class T shares during the fiscal year ended October 31, 1999.
HOW TO REDEEM SHARES
Contingent Deferred Sales Charge--Class B Shares. A CDSC is imposed on any
redemption 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 held by you at the time of redemption.
If the aggregate value of 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. Pursuant to an agreement with the
Distributor, Dreyfus Service Corporation receives the proceeds from the CDSC
imposed on the redemption of Class B shares.
The following table sets forth the rates of the CDSC for Class B shares of
each Fund, except as set forth below for certain shareholders of Dreyfus Premier
Value Fund:
Year Since CDSC as a % of
Purchase Payment Amount Invested or
Was Made Redemption Proceeds
First................................................ 4.00
Second............................................... 4.00
Third................................................ 3.00
Fourth............................................... 3.00
Fifth................................................ 2.00
Sixth................................................ 1.00
The following table sets forth the rates of the CDSC for Class B shares of
Dreyfus Premier Value Fund purchased by shareholders who beneficially owned
Class B shares of such Fund on November 30, 1996:
Year Since CDSC as a % of
Purchase Payment Amount Invested or
Was Made Redemption Proceeds
First................................................ 3.00
Second............................................... 3.00
Third................................................ 2.00
Fourth............................................... 2.00
Fifth................................................ 1.00
Sixth................................................ 0.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing
shares acquired pursuant to the reinvestment of dividends and distributions;
then of amounts representing the increase in net asset value of Class B shares
above the total amount of payments for the purchase of Class B shares made
during the preceding six years; then of amounts representing the cost of shares
purchased six years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of time within the
applicable six-year period.
For example, assume an investor purchased 100 shares at $10 per share for a
cost of $1,000. Subsequently, the shareholder acquired five additional shares
through dividend reinvestment. During the second year after the purchase the
investor decided to redeem $500 of the 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 in the second year after purchase) for a total CDSC of $9.60.
Contingent Deferred Sales Charge--Class C Shares. A CDSC of 1% 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.
Waiver of CDSC. The CDSC 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, (d) a distribution following retirement under a
tax-deferred retirement plan or upon attaining age 70 1/2in the case of an IRA
or Keogh plan or custodial account pursuant to Section 403(b) of the Code, and
(e) redemptions pursuant to the Automatic Withdrawal Plan, as described below.
If the Company's Board determines to discontinue the waiver of the CDSC, the
disclosure herein will be revised appropriately. 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 or this Statement of Additional
Information 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.
Redemption Through a Selected Dealer. If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by the
Transfer Agent prior to the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), the redemption request will be
effective on that day. If a redemption request is received by the Transfer Agent
after the close of trading on the floor of the New York Stock Exchange, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to your
account with the Selected Dealer. See "How to Buy Shares" for a discussion of
additional conditions or fees that may be imposed upon redemption.
In addition, the Distributor or its designee will accept orders from
Selected Dealers with which the Distributor has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by dealers
by the close of trading on the floor of the New York Stock Exchange on any
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 Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
Reinvestment Privilege. Upon written request, you may reinvest up to the
number of Class A, Class B, or Class T shares you have redeemed, within 45 days
of redemption, at the then-prevailing net asset value without a sales load, or
reinstate your account for the purpose of exercising Fund Exchanges. Upon
reinstatement, with respect to Class B shares, or Class A or Class T shares if
such shares were subject to a CDSC, your account will be credited with an amount
equal to the CDSC previously paid upon redemption of the shares reinvested. The
Reinvestment Privilege may be exercised only once.
Wire Redemption Privilege. By using this Privilege, you authorize the
Transfer Agent to act on wire, telephone or letter redemption instructions from
any person representing himself or herself to be you, or a representative of
your Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Company 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 ($1,000 minimum) will
be transferred by Federal Reserve wire only to the commercial bank account you
have specified on the Account Application or Shareholder Services Form, or to a
correspondent bank if your bank is not a member of the Federal Reserve System.
Fees ordinarily are imposed by such bank and borne by the investor. Immediate
notification by the correspondent bank to your bank is necessary to avoid a
delay in crediting the funds to your bank account.
If you have access to telegraphic equipment you 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
If you do not have direct access to telegraphic equipment you may have the
wire transmitted by contacting a TRT Cables operator at 1-800-654-7171, toll
free. You should advise the operator that the above transmittal code must be
used and you should also inform the operator of the Transfer Agent's answer back
sign.
To change the commercial bank or account designated to receive 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. You may request by telephone that
redemption proceeds be transferred between your Fund account and your bank
account. Only a bank account maintained in a domestic financial institution
which is an ACH member may be designated. Holders of jointly registered Fund or
bank accounts may redeem through the Dreyfus TeleTransfer Privilege for transfer
to their bank account not more than $500,000 within any 30-day period.
Redemption proceeds will be on deposit in your account at an ACH member bank
ordinarily two business days after receipt of the redemption request. You should
be aware that if you have selected the Dreyfus TeleTransfer Privilege, any
request for a wire redemption will be effected as a Dreyfus TeleTransfer
transaction through the ACH system unless more prompt transmittal specifically
is requested. See "How to Buy 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.
Redemption Commitment. The Company has committed itself to pay in cash all
redemption requests by any shareholder of record of a Fund, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of such
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 reserves the right to make payments in whole or in part in securities or
other assets 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
securities are valued. If the recipient sells such securities, brokerage charges
would be incurred.
Suspension of Redemptions. 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 relevant 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
Fund Exchanges. You may purchase, in exchange for shares of a Fund, shares
of the same Class of another Fund or of certain other funds managed or
administered by the Manager or Founders Asset Management LLC, an affiliate of
the Manager, to the extent such shares are offered for sale in your state of
residence. Class T shares also may be exchanged for Class A shares of Dreyfus
Premier fixed income funds that do not offer Class T shares. Shares of the same
Class of such 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"), but 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 a CDSC that are exchanged for shares of
another fund will be subject to the higher applicable CDSC of the two
funds, and for purposes of calculating CDSC rates and conversion
periods, if any, 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, your Service Agent acting on
your behalf must notify the Transfer Agent of your prior ownership of fund
shares and your account number.
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 Manager. 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 Shares." Redemption proceeds for Exchange
Account shares are paid by Federal wire or check only. Exchange Account shares
also are eligible for the Dreyfus Auto-Exchange Privilege, Dreyfus Dividend
Sweep and the Automatic Withdrawal Plan.
To request an exchange, your Service Agent acting on your 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 you check the applicable "No" box on the
Account Application, indicating that you specifically refuse this Privilege. By
using the Telephone Exchange Privilege, you authorize the Transfer Agent to act
on telephonic instructions (including over The Dreyfus Touch(R) automated
telephone system) from any person representing himself or herself to be you, or
a representative of your Service Agent, and reasonably believed by the Transfer
Agent to be genuine. 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. No fees currently are
charged shareholders directly in connection with exchanges, although the Company
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal administrative fee in accordance with rules promulgated
by the Securities and Exchange Commission.
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 the fund into which the exchange is being made.
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.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege permits
you to purchase, in exchange for shares of a Fund, shares of the same Class of
certain other funds advised by the Manager or Founders, of whether you and a
shareholder. Class T shares also may be exchanged for Class A shares of Dreyfus
Premier fixed income funds that do not offer Class T shares. 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
notification by the investor. You will be notified if your account falls below
the amount designated to be exchanged under this Privilege. In this case, your
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 only 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 1-800-554-4611. The Company 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.
Dreyfus-Automatic Asset Builder(R). 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.
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 U.S. Government
automatically deposited into your fund account. You may deposit as much of such
payments as you elect.
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 ACH 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. It is the sole responsibility of your employer to
arrange for transactions under the Dreyfus Payroll Savings Plan.
Dreyfus Dividend Options. Dreyfus Dividend Sweep allows you to invest
automatically your dividends or dividends and capital gain distributions, if
any, from a Fund in shares of the same Class of certain other funds advised by
the Manager or Founders of which you are 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"), but 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 the
shares of other funds that impose a CDSC and the applicable CDSC, if
any, will be imposed upon redemption of such shares.
Dreyfus Dividend ACH permits you to transfer electronically dividends or
dividends and capital gain distributions, if any, from a 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.
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. Withdrawal
payments are the proceeds from sales of Fund shares, not the yield on the
shares. If withdrawal payments exceed reinvested dividends and distributions,
your shares will be reduced and eventually may be depleted. Automatic Withdrawal
may be terminated at any time by you, the Company or the Transfer Agent. Shares
for which certificates have been issued may not be redeemed through the
Automatic Withdrawal Plan.
No CDSC with respect to Class B shares will be imposed on withdrawals made
under the Automatic Withdrawal Plan, provided that the amounts withdrawn under
the plan do not exceed on an annual basis 12% of the account value at the time
the shareholder elects to participate in the Automatic Withdrawal Plan.
Withdrawals with respect to Class B shares under the Automatic Withdrawal Plan
that exceed on an annual basis 12% of the value of the shareholders account will
be subject to a CDSC on the amounts exceeding 12% of the initial account value.
Withdrawals of Class A and Class T shares subject to a CDSC and Class C shares
under the Automatic Withdrawal Plan will be subject to any applicable CDSC.
Purchases of additional Class A or Class T shares where the sales load is
imposed concurrently with withdrawals of Class A or Class T shares generally are
undesirable.
Certain 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.
Letter of Intent--Class A and Class T Shares. By signing a Letter of Intent
form, which can be obtained by calling 1-800-554-4611, 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 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 or Class T shares of the Fund 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 or Class T
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.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The Company
makes available to corporations a variety of prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan. In addition, the
Company makes available Keogh Plans, IRAs (including regular IRAs, spousal IRAs
for a non-working spouse, Roth IRAs, SEP-IRAs, Rollover IRAs and Education IRAs)
and 403(b)(7) Plans. Plan support services also are available.
If you wish to purchase Fund shares in conjunction with a Keogh Plan, a
403(b)(7) Plan or an IRA, including a SEP-IRA, you may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs may
charge a fee, 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 acting as custodian. Purchases for these plans may not
be made in advance of receipt of funds.
You should read the prototype retirement plan and the appropriate form of
custodial agreement for further details on eligibility, service fees and tax
implications, and you should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
Valuation of Portfolio Securities. Portfolio securities, including covered
call options written by a 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. Any assets or liabilities
initially expressed in terms of foreign currency will be translated into U.S.
dollars at the midpoint of the New York interbank market spot exchange rate as
quoted on the day of such translation by the Federal Reserve Bank of New York
or, if no such rate is quoted on such date, at the exchange rate previously
quoted by the Federal Reserve Bank of New York, or at such other quoted market
exchange rate as may be determined to be appropriate by the Manager. Forward
currency contracts will be valued at the current cost of offsetting the
contract. If a Fund has to obtain prices as of the close of trading on various
exchanges throughout the world, the calculation of net asset value may not take
place contemporaneously with the determination of prices of certain of the
Funds' securities. Short-term investments may be carried at amortized cost,
which approximates value. Expenses and fees, including the management fee and
fees pursuant to the Distribution Plan and Shareholder Services Plan, are
accrued daily and taken into account for the purpose of determining the net
asset value of each Fund's shares. Because of the difference 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
recent market quotations are not readily available, or are not valued by a
pricing service approved by the Company's Board, are valued at fair value as
determined in good faith by the Board. The Board will review the method of
valuation on a current basis. In making their good faith valuation of restricted
securities, the Board members 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 if the
Board members 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.
New York Stock Exchange Closings. The holidays (as observed) on which the
New York Stock Exchange is closed currently are: New Year's Day, Martin Luther
King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Management believes that each Fund has qualified as a "regulated investment
company" under the Code for the fiscal year ended October 31, 1999. Each 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 securities gains to
the extent that such income and gains are distributed to shareholders in
accordance with 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 and meet certain asset diversification and other requirements. If a
Fund did not qualify as a regulated investment company, it would be treated for
tax purposes as an ordinary corporation subject to Federal income tax. The term
"regulated investment company" does not imply the supervision of management or
investment practices or policies by any government agency.
If you elect to receive dividends and distributions in cash, and your
dividend or distribution check is returned to the Fund as undeliverable or
remains uncashed for six months, the Fund reserves the right to reinvest such
dividends or distributions and all future dividends and distributions payable to
you in additional Fund shares at net asset value. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.
Any dividend or distribution paid shortly after an investor's purchase may
have the effect of reducing the aggregate net asset value of the shares below
the cost of the investment. Such a dividend or distribution would be a return of
investment in an economic sense, although taxable as stated in the Fund's
Prospectus. In addition, the Code provides that if a shareholder holds shares of
a 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.
Depending upon the composition of a Fund's income, the entire amount or a
portion of the dividends paid by such Fund from net investment income may
qualify for the dividends received deduction allowable to qualifying U.S.
corporate shareholders ("dividends received deduction"). In general, dividend
income of a Fund distributed to qualifying corporate shareholders will be
eligible for the dividends received deduction only to the extent that such
Fund's income consists of dividends paid by U.S. corporations. However, Section
246(c) of the Code provides that if a qualifying corporate shareholder has
disposed of Fund shares held for less than 46 days, which 46 days generally must
be during the 90-day period commencing 45 days before the shares become
ex-dividend, and has received a dividend from net investment income with respect
to such shares, the portion designated by the Fund as qualifying for the
dividends received deduction will not be eligible for such shareholder's
dividends received deduction. In addition, the Code provides other limitations
with respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding Fund shares.
A Fund may qualify for and may make an election permitted under Section 853
of the Code so that shareholders may be eligible to claim a credit or deduction
on their Federal income tax returns for, and will be required to treat as part
of the amounts distributed to them, their pro rata portion of qualified taxes
paid or incurred by the Fund to foreign countries (which taxes relate primarily
to investment income). A Fund may make an election under Section 853 of the
Code, provided that more than 50% of the value of the Fund's total assets at the
close of the taxable year consists of securities in foreign corporations, and
the Fund satisfies the applicable distribution provisions of the Code. The
foreign tax credit available to shareholders is subject to certain limitations
imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will be
treated as capital gains and losses. However, a portion of the gain or loss
realized from the disposition of foreign currencies (including foreign currency
denominated bank deposits) and non-U.S. dollar denominated securities (including
debt instruments and certain futures or forward contracts and options) may be
treated as ordinary income or loss under Section 988 of the Code. In addition,
all or a portion of any gains realized from the sale or other 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, any gain or loss realized by a Fund from
certain financial futures or forward contracts and 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 the exercise or lapse of such contracts and options as well as from
closing transactions. In addition, any such contract or option 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 a Fund involving certain futures or forward
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, override or modify 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 as ordinary income.
If a Fund were treated as entering into "straddles" by reason of its
engaging in financial futures or forward contracts or options transactions, such
"straddles" could be characterized as "mixed straddles" if the futures or,
forward contracts or options transactions comprising a part of such "straddles"
were governed by Section 1256 of the Code. A Fund may make one or more elections
with respect to "mixed straddles." Depending upon which election is made, if
any, the results to the Fund may differ. 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 on "straddle" positions may
be treated as short-term capital gain or ordinary income.
The Taxpayer Relief Act of 1997 included constructive sale provisions that
generally apply if the Fund either (1) holds an appreciated financial position
with respect to stock, certain debt obligations, or partnership interests
("appreciated financial position") and then enters into a short sale, futures or
forward contract, or offsetting notional principal contract (collectively, a
"Contract") with respect to the same or substantially identical property or (2)
holds an appreciated financial position that is a Contract and then acquires
property that is the same as, or substantially identical to, the underlying
property. In each instance, with certain exceptions, the Fund generally will be
taxed as if the appreciated financial position were sold at its fair market
value on the date the Fund enters into the financial position or acquires the
property, respectively. Transactions that are identified hedging or straddle
transactions under other provisions of the Code can be subject to the
constructive sale provisions.
If a Fund invests in an entity that is classified as a "passive foreign
investment company" ("PFIC") for Federal income tax purposes, the operation of
certain provisions of the Code applying to PFICs could result in the imposition
of certain Federal income taxes on the Fund. In addition, gain realized from the
sale or other disposition of PFIC securities may be treated as ordinary income
under Section 1291 of the Code and, with respect to PFIC securities that are
marked-to-market, under Section 1296 of the Code.
Investment by a 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 each 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 will 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
Manager's fees are not reduced as a consequence of the receipt of such
supplemental information. Such information may be useful to the Manager in
serving both the Funds and other clients which it advises and, conversely,
supplemental information obtained by the placement of business of other clients
may be useful to the Manager in carrying out its obligations to the Funds.
Sales by a broker of shares of a Fund or other funds advised by the Manager
or its affiliates may be taken into consideration, and brokers also will be
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, in certain cases, result from two or
more funds advised or administered by the Manager being engaged simultaneously
in the purchase or sale of the same security. Certain of a Fund's transactions
in securities of foreign issuers may not benefit from the negotiated commission
rates available to the Funds for transactions in securities of domestic issuers.
When transactions are executed in the over-the-counter market, a Fund will deal
with the primary market makers unless a more favorable price or execution
otherwise is obtainable. Foreign exchange transactions are made with banks or
institutions in the interbank market at prices reflecting a mark-up or mark-down
and/or commission.
Portfolio turnover may vary from year to year as well as within a year. In
periods in which extraordinary market conditions prevail, the Manager will not
be deterred from changing a Fund's investment strategy as rapidly as needed, in
which case higher turnover rates can be anticipated which would result in
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.
In connection with its portfolio securities transactions for the fiscal
years ended October 31, 1997, 1998, and 1999, Dreyfus Premier Value Fund paid
total brokerage commissions of $981,266, $912,349, and $721,856, respectively.
For the period March 31, 1998 (commencement of operations) to October 31, 1998,
and for the fiscal year ended October 31, 1999, Dreyfus Premier International
Value Fund paid total brokerage commissions of $7,276 and $13,631, respectively.
These amounts do not include gross spreads and concessions with principal
transactions which, where determinable for such periods, amounted to $168,718,
$250,570 and $28,743 in fiscal 1997, 1998 and 1999, respectively, for Dreyfus
Premier Value Fund, and $75 and $0, respectively, in fiscal 1998 and 1999 for
Dreyfus Premier International Value Fund. None of the aforementioned amounts
were paid to the Distributor.
The aggregate amount of transactions during the last fiscal year in
securities effected on an agency basis through a broker for, among other things,
research services, and the commissions and concessions related to such
transactions were as follows:
Transaction Commissions and
Amount Concessions
Dreyfus Premier Value Fund $64,284,978 $77,494
Dreyfus Premier International Value Fund $ 13,631 $0
The Company contemplates that, consistent with the policy of obtaining the
most favorable net price, brokerage transactions may be conducted through the
Manager or its affiliate, Dreyfus Brokerage Services, Inc. ("DBS"). The
Company's Board has adopted procedures (the "Procedures") in conformity with
Rule 17e-1 under the 1940 Act to ensure that all brokerage commissions paid to
the Manager or its affiliates are reasonable and fair. These procedures were
adopted at a Board meeting held on November 4, 1998.
During the fiscal year ended October 31, 1999, Dreyfus Premier Value Fund
paid to DBS brokerage commissions of $11,444. During the fiscal years ended
October 31, 1999, this amounted to approximately 2% of the aggregate brokerage
commissions paid by the Fund for transactions involving approximately 5% of the
aggregate dollar amount of transactions for which the Fund paid brokerage
commissions.
Since the Procedures were initially adopted on November 4, 1998, no
information is provided for prior fiscal years of the Company.
With respect to Dreyfus Premier International Value Fund, no brokerage
commissions were paid to the Manager or its affiliates for the fiscal year ended
October 31, 1999.
PERFORMANCE INFORMATION
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum offering
price in the case of Class A) per share 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 1 from the result. A Class's average annual total return figures
calculated in accordance with such formula assume that in the case of Class A or
Class T 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.
The average annual total return for the one-, five-, and ten-year periods
ended October 31, 1999, or since the Fund's commencement of operations (as
indicated), for each Fund (and Class of shares), was a follows:
<TABLE>
<CAPTION>
Average Annual Average Annual Average Annual Average Annual
Total Return for Total Return for Total Return for Total Return
Name of Fund One Year 5 Years 10 Years Since Inception
<S> <C> <C> <C> <C>
Dreyfus Premier Value
Fund
Class A 6.70% 12.48% 10.34% N/A
Class B 8.38% 12.70% N/A 9.79%(2)
Class C 11.25% N/A N/A 12.74%(3)
Class R 12.99% N/A N/A 13.41%(4)
Dreyfus Premier
International Value Fund
Class A 17.58% N/A N/A 4.04%(1)
Class B 19.70% N/A N/A 4.67%(2)
Class C 22.77% N/A N/A 7.14%(3)
Class R 25.12% N/A N/A 8.23%(4)
- ---------------------------
(1) From October 16, 1986 (commencement of operations) through October 31, 1999.
(2) From January 15, 1993 (commencement of operations) through October 31, 1999.
(3) From September 1, 1995 (commencement of operations) through October 31,
1999.
(4) From March 31,1998 (commencement of operations) through October 31, 1999.
</TABLE>
Total return is calculated by subtracting the amount of the Fund's net
asset value (maximum offering price in the case of Class A or Class T) per share
at the beginning of a stated period from the net asset value per share at the
end of the period (after giving effect to the reinvestment of dividends and
distributions during the period and any applicable CDSC), and dividing the
result by the net asset value 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 or Class T 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 or Class T 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 each Fund for the indicated period ended October 31,
1999 was as follows:
<TABLE>
<CAPTION>
Total Return Since Total Return Since Inception Based
Inception Based on Net Asset Value on Maximum Offering Price (with
(without deduction of maximum deduction of maximum CDSC0
Name of Fund Sales Load, as Applicable)
<S> <C> <C>
Dreyfus Premier Value Fund
Class A 375.17%(1) 348.02%(1)
Class B 88.74%(2) 88.74%(2)
Class C 64.87%(3) 64.87%(3)
Class R 68.98%(3) N/A
Dreyfus Premier International
Value Fund
Class A 12.97%(4) 6.50%(4)
Class B 11.53%(4) 7.53%(4)
Class C 11.59%(4) 11.59%(4)
Class R 13.41%(4) N/A
- ---------------------------
(1) From October 16, 1986 (commencement of operations) through October 31, 1999.
(2) From January 15, 1993 (commencement of operations) through October 31, 1999.
(3) From September 1, 1995 (commencement of operations) through October 31,
1999.
(4) From March 31,1998 (commencement of operations) through October 31,
1999.
</TABLE>
No performance information is provided for Class T shares of either Fund,
which were not available to the public during the fiscal year ended October 31,
1999)
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, Morgan
Stanley Capital International (EAFE) Index, Money Magazine, Morningstar, Inc.,
Value Line, Inc., Ibbotson Associates, 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 each 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, retirement planning, college planning and IRA investing. From time
to time advertising materials for the Fund also may refer to Morningstar or
Value Line ratings and related analyses supporting the rating. In addition,
advertising material for the Fund may, from time to time, include biographical
information relating to its portfolio manager and may refer to, or include
commentary by the portfolio manager relating to investment strategy, any or all
aspects related to value investing, asset growth, current or past business,
political, economic or financial conditions and other matters of general
interest to investors.
INFORMATION ABOUT THE COMPANY AND FUNDS
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.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
shareholders may not consider each year the election of Board members or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Company to hold a special
meeting of shareholders for purposes of removing a Board member from office.
Shareholders may remove a Board member by the affirmative vote of two-thirds of
the Company's outstanding voting shares. In addition, the Board will call a
meeting of shareholders for the purpose of electing Board members if, at any
time, less than a majority of the Board members then holding office have been
elected by shareholders.
The Company is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for certain
matters under the 1940 Act and for other purposes. A shareholders of one
portfolio is not deemed to be a shareholder of any other portfolio. For certain
matters shareholders vote together as a group; as to others they vote separately
by portfolio.
To date, the Board has authorized the creation of two series of shares. All
consideration received by the Company for shares of one of the series and all
assets in which such consideration is invested will belong to that series
(subject only to the rights of creditors of the Company) and will be subject to
the liabilities related thereto. The income attributable to, and the expenses
of, one series are treated separately from those of the other series. The
Company has the ability to create, from time to time, new series without
shareholder approval.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
company, such as the Company, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each series affected by such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear that the interests
of each series in the matter are identical or that the matter does not affect
any interest of such series. However, the Rule exempts the selection of
independent accountants and the election of Board members from the separate
voting requirements of the Rule.
Each Fund is intended to be a long-term investment vehicle and is not
designed to provide investors with a means of speculating on short-term market
movements. A pattern of frequent purchases and exchanges can be disruptive to
efficient portfolio management and, consequently, can be detrimental to the
Fund's performance and its shareholders. Accordingly, if the Company's
management determines that an investor is following a market-timing strategy or
is otherwise engaging in excessive trading, the Company, with or without prior
notice, may temporarily or permanently terminate the availability of Fund
Exchanges, or reject in whole or part any purchase or exchange request, with
respect to such investor's account. Such investors also may be barred from
purchasing other funds in the Dreyfus Family of Funds. Generally, an investor
who makes more than four exchanges out of a Fund during any calendar year or who
makes exchanges that appear to coincide with a market-timing strategy may be
deemed to be engaged in excessive trading. Accounts under common ownership or
control will be considered as one account for purposes of determining a pattern
of excessive trading. In addition, the Company may refuse or restrict purchase
or exchange requests for Fund shares by any person or group if, in the judgment
of the Company's management, the Fund would be unable to invest the money
effectively in accordance with its investment objective and policies or could
otherwise be adversely affected or if the Fund receives or anticipates receiving
simultaneous orders that may significantly affect the Fund (e.g., amounts equal
to 1% or more of the Fund's total assets). If an exchange request is refused,
the Company will take no other action with respect to the Fund shares until it
receives further instructions from the investor. A Fund may delay forwarding
redemption proceeds for up to seven days if the investor redeeming shares is
engaged in excessive trading or if the amount of the redemption request
otherwise would be disruptive to efficient portfolio management or would
adversely affect the Fund. The Company's policy on excessive trading applies to
investors who invest in a Fund directly or through financial intermediaries, but
does not apply to the Dreyfus Auto-Exchange Privilege, to any automatic
investment or withdrawal privilege described herein, or to participants in
employer-sponsored retirement plans.
During times of drastic economic or market conditions, the Company may
suspend Fund Exchanges temporarily without notice and treat exchange requests
based on their separate components -- redemption orders with a simultaneous
request to purchase the other fund's shares. In such a case, the redemption
request would be processed at the Fund's next determined net asset value but the
purchase order would be effective only at the net asset value next determined
after the fund being purchased receives the proceeds of the redemption, which
may result in the purchase being delayed.
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of a Massachusetts business trust.
However, the Company's Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Company and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Company or a Trustee. The Agreement and Declaration of
Trust provides for indemnification from each Fund's property for all losses and
expenses of any shareholder held personally liable for the obligations of the
Fund. Thus, the risk of a shareholder's incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself would
be unable to meet its obligations, a possibility which management believes is
remote. Upon payment of any liability incurred by the Fund, the shareholder
paying such liability will be entitled to reimbursement from the general assets
of the Fund. the Company intends to conduct its operations in such a way so as
to avoid, as far as possible, ultimate liability of the shareholders for
liabilities of the Fund.
Each Fund will send annual and semi-annual financial statements to all its
shareholders.
COUNSEL AND INDEPENDENT AUDITORS
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Company, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the shares
being sold pursuant to each Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the Company.
<PAGE>
APPENDIX
Description of S&P, Moody's, Fitch and Duff 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 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
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.
S&P's letter ratings may be modified by the addition of a plus (+) or a
minus (-) sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
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 that 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 (+)
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-1.
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.
B
Issues carrying this designation are regarded as having only speculative
capacity for timely payment.
C
This designation is assigned to short-term obligations with doubtful
capacity for payment.
Moody's
Bond Ratings
Aaa
Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and generally are 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 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 as 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 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 rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security 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 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 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 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.
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.
Fitch
Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to meet
the obligations of a specific debt issue or class of debt. The ratings take into
consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong ability to pay interest
and repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse impact on these bonds
and, therefore, impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds with higher
ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While bonds in this class
are currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic activity throughout
the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
Plus (+) and minus (-) signs are used with a rating symbol to indicate the
relative position of a credit within the rating category. Plus and minus signs,
however, are not used in the AAA category covering 12-36 months.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's bond rating analysis,
the short-term rating places greater emphasis than bond ratings on the existence
of liquidity necessary to meet the issuer's obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
Duff
Bond Ratings
AAA
Bonds rated AAA are considered highest credit quality. The risk factors are
negligible, being only slightly more than for risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality. Protection factors are
strong. Risk is modest but may vary slightly from time to time because of
economic conditions.
A
Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
BBB
Bonds rated BBB are considered to have below average protection factors
but still considered sufficient for prudent investment. There may be
considerable variability in risk for bonds in this category during economic
cycles.
BB
Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial protection
factors fluctuate according to industry conditions or company fortunes. Overall
quality may move up or down frequently within the category.
B
Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating within
this category or into a higher or lower quality rating grade.
CCC
Bonds rated CCC are well below investment grade securities. Such bonds may
be in default or have considerable uncertainty as to timely payment of interest,
preferred dividends and/or principal. Protection factors are narrow and risk can
be substantial with unfavorable economic or industry conditions and/or with
unfavorable company developments.
Plus (+) and minus (-) signs are used with a rating symbol (except AAA) to
indicate the relative position of a credit within the rating category.
Commercial Paper Ratings
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors which are supported by ample asset protection.
Risk factors are minor. Paper rated Duff-2 is regarded as having good certainty
of timely payment, good access to capital markets and sound liquidity factors
and company fundamentals. Risk factors are small. Paper rated Duff 3 is regarded
as having satisfactory liquidity and other protection factors. Risk factors are
larger and subject to more variation. Nevertheless, timely payment is expected.
