DREYFUS GLOBAL GROWTH FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
Your Fund recorded a total return of 11.95% for the fiscal year ended
December 31, 1996,* somewhat below the total return of 13.48% for the Morgan
Stanley Capital International World Index for the year.**
Dreyfus Global Growth lagged the World Index principally due to its
higher weighting in Japan and its lower weighting in the U.S. As the U.S.
performed much better than Japan over the period, this dual investment
decision was the primary reason for your Fund's underperformance versus the
World Index. Global Growth's European investments were near an "index weight"
for most of the year, and the European portion of the portfolio was well
diversified among six to twelve different markets. These included principally
the U.K., Germany, France, the Netherlands, and Switzerland. Positions in
Italy, Sweden, Finland, Norway, Portugal, Ireland and Spain were also held at
various times during the year. European investments contributed positively to
performance for the year. Taken as a whole, the Fund's emerging market
investments contributed positively to performance for the year. Hong Kong was
the standout.
INVESTMENT APPROACH
Since assuming management of the Dreyfus Global Growth Fund early in
1996, I have employed the investment style developed during my twelve years
of experience in international investment management. My consistent approach
to managing your Fund is explained below. The latter portion of this letter
details my current strategy for the Dreyfus Global Growth Fund.
My investment process is designed to deliver to investors a portfolio
that includes a wide variety of holdings in 15 to 25 markets around the
world, exposure to rapidly growing emerging markets when they are attractive
for investment, and active currency management. The crucial challenge for a
global investor is how to judge the relative attractiveness of various
markets when there are scores to choose from. I address this challenge by
evaluating information on growth, valuation, interest rates, liquidity,
technical factors and currency in each of the world's major markets. My work
in these areas is driven by PC-based tools I have developed over time.
Markets and industry sectors will be overweighted, underweighted or market
weighted relative to those of the Morgan Stanley Capital International World
Index. Presently, my strategy is to overweight or underweight markets and
industry sectors by no more than 70%, with two exceptions. First, the two
largest markets in the world, the U.S. and Japan, have a 50% to 150%
weighting band. The second exception is the asset class of emerging markets.
While these markets comprise only 4% of the World Index, the Global Growth
Fund may invest up to 20% of its assets in this area when significant
opportunities present themselves. The reason for this policy is twofold.
First, emerging markets have the highest secular GDP and EPS growth rates in
the world and I believe a global portfolio should offer shareholders
substantial exposure to this long-term opportunity. Second, emerging markets
often reach valuation extremes seldom seen in more developed equity markets.
In the investment process I have developed, stocks are managed in a
disciplined way. I search for stocks expected to have higher earnings growth
rates than the market in which they trade. Attractive companies often have
made a corporate change in management, strategy or business structure that
will positively alter their future growth rate. Stocks purchased also need to
have attractive valuations both relative to their own history and that of the
local market. Companies are sold when growth is forecast to fall below my own
or consensus estimates, the valuation target is reached or the weighting in
that market reduced as a result of an asset allocation decision.
Generally, foreign currencies are at least partially hedged, where
practicable, when I believe that a given currency has 10% or more downside
risk against the U.S. Dollar over the next 12 to 18 months.
MARKET OVERVIEW AND CURRENT OUTLOOK
U.S.A.
The American stock market roared ahead for the second consecutive year in
1996, producing a return of 22.95% as measured by the S&P 500 Index.*** In my
mid-year letter I expressed concern about a number of factors _ slowing
earnings growth, neutral valuation, and an end of the trend toward lower
interest rates _ that might cause U.S. market performance to moderate . While
earnings have slowed and interest rates have moved into a trading range, the
market has continued to perform well. The Global Growth Fund held 22%-25% of
its assets in U.S. equities for most of 1996 compared to 40% for the World
Index. A higher commitment to U.S. stocks could have produced higher returns
for the Fund. Nevertheless, your Fund did benefit from strong performances in
a number of U.S. industry groups during 1996. Chief among these were
technology and health care. Individual stocks such as disk drive producer
Seagate Technology and the networking company Cisco Systems as well as
pharmaceutical maker Warner Lambert made notable contributions to overall
returns.
After two years of very strong returns in the U.S. stock market, many
market observers continue to expect at least a "rest period" or a correction
in the uptrend. Rarely has the U.S. market moved ahead consistently for six
years _ as it has since 1991_without such a broad-based correction. I hasten
to add that corrections have occurred in individual stock groups on a regular
basis. Some professional investors refer to these as "internal corrections"
in the overall market. Your Fund has taken the opportunity in recent months
to acquire stocks in industry groups that have gone through such a correction
phase. Two of these areas are discussed below.
Energy is an area of the world economy that has been in the doldrums for
15 years, following the huge price surges of the seventies and early
eighties. The tenfold increase in oil prices between the early seventies and
early eighties made it very attractive for producers to drill new wells and
even develop higher-cost supplies that had been uneconomic at previously low
oil prices. This huge investment in new supplies caused the price of oil and
its companion fuel, natural gas, to remain weak for most of the eighties and
early nineties. As a result the stock prices of oil and gas companies and
so-called oil service companies (which help oil and gas companies explore for
and develop new resources) lagged the market for most of the period.
Recently, supply and demand for oil and gas products appear to have returned
to a more reasonable balance. As a result, oil and gas prices have moved up
meaningfully in the last year and the stock prices of energy companies have
performed well. Energy, in my view, remains an area appropriate for
investment emphasis by your Fund. The Fund's investments in the energy
industry have increased over the last few months of the fiscal year. Most
importantly, a significant position has been established in the industry's
technology leader, Schlumberger.
Another area of the U.S. market that I believe has offered renewed
opportunities over the last few months is technology. Americans lead the
world in important portions of technology such as software and networking.
When market corrections occur in various portions of the broad technology
group, the Global Growth fund team reassesses the fundamental growth outlook
for that area and decides whether to increase its investment. A recent
investment based on this continuing process is the networking company Cabletro
n Systems, which was added to the portfolio following a correction in the
stock price.
All in all, I remain constructive with respect to long-term prospects for the
U.S. stock market and expect to further increase U.S. exposure in your Fund
if the right opportunities present themselves.
JAPAN
Late in 1996 the Global Growth Fund reduced its weight in the Japanese
market from an overweight position relative to the World Index to a neutral
one. The reason for this tactical change had less to do with fundamentals,
which in our view continued to improve, and more to do with two of the market
factors, liquidity and technical analysis, that are among the six guidelines
our investment process uses in analyzing various stock markets around the
world. Both liquidity and the market's technical position deteriorated late
in the fourth quarter of 1996. Subsequent to the reduction of Japanese
exposure in the Global Growth Fund the main Nikkei Index in Tokyo declined
sharply in the last few trading sessions of 1996.
Nevertheless, the Fund's large position in Japan was a major contributor
to the Fund's underperformance relative to the World Index for the year in
1996. The Fund's overweighting in Japan was based on the following factors:
1. Corporate Japan has reported some of the strongest earnings of any
major market in the world.
2. Interest rates have been and may remain low.
3. The market has remained attractively priced when compared to its own
valuation history.
4. The recent weakening of the Yen is positive for Japanese
export-oriented companies.
The list above encompasses many of the ingredients I have found in other
bull markets over the years. What's been missing? In a word, confidence.
Japanese investors have suffered through a long bear market since the Nikkei
Index peaked at nearly 40,000 in late 1989. At its peak the Japanese market
was about twice as high as it now stands. Following a banking crisis, a
period of falling consumer prices, two false starts toward economic recovery,
and a good deal of political turmoil, Japanese investors are having a
difficult time focusing on the positive future rather than the recent,
unpleasant past. Nevertheless, my team and I have seen a good deal of growth
in Japanese companies, growth that is available at stock prices that are very
reasonable in the context of the Japanese market.
EUROPE
Your Fund is growth oriented. In Europe these days, my staff and I find
that many of the growth stocks fall into three categories.
One area is the "new growth company." Europe is spawning a large number
of new mid-sized growth companies that are either being spun out of larger
companies or made available to investors for the first time through initial
public stock offerings. Just in the last month my team has considered
companies in the computer software, temporary employment, consumer branded,
cellular telephone, leisure, and electronics businesses for inclusion in your
Fund. Many of these stocks offer more or less "pure plays" on some of the
faster growing areas of the European economy. Stocks held in your Fund in
this area during 1996 included the U.K. company Thistle Hotels, Portuguese
building products leader Cimpor Cimentos De Portugal, and the Swedish
engineering concern Garphyttan Industries.
Another area of continuing interest is the restructuring of more mature
companies. Europe will not become like the U.S. nor America like Europe. But
some European companies are taking cues from their U.S. counterparts that may
lead to enhanced stock performance over the next few years. Dreyfus Global
Growth holdings in Europe during 1996 featured the French conglomerate
Generale Des Eaux and the German consumer products/specialty chemicals group
Henkel. Lastly, I have positioned your Fund in a way that is intended to
benefit from major structural changes occurring in Europe's economy.
Telecommunications is being deregulated. Important changes are taking place
in all aspects of the media_television, cable television, newspapers, movie
distribution, and the internet. Holdings in this area during 1996 included
Norwegian-based Nordic media leader Schibsted and the fast growing U.K.
satellite television company British Sky Broadcasting Group. These are but
two examples of industries undergoing rapid change. Your Fund seeks
investments in growing companies driving the change in each of these areas,
not defending themselves against it.
EMERGING MARKETS
Investments in selected emerging markets contributed positively to the
performance of your Fund relative to the World Index during 1996. The
highlight of your Fund's emerging markets investments during 1996 was Hong
Kong, which was overweight for nearly all of 1996. This British Crown
possession will be reunited with China in July, 1997. The prospect of
participating in the People's Republic of China's 10% economic growth rate
(which is some five times higher than the current U.S. growth rate) helped pro
pel the Hong Kong Hang Seng Index to a 33.5% gain in 1996. Stocks in which
your Fund held core positions such as the Asian financial services giant Hong
Kong & Shanghai Bank and real estate developer and owner Cheung Kong were
powerful market leaders in the advance. Shanghai Industrial Holdings and
China Resources Enterprises were also extremely strong Hong Kong market
performers that contributed to Global Growth Fund performance. These two are
part of a group of stocks called "red chips" because their business is almost
exclusively in fast growing China. They are viewed in the marketplace as
"pure plays" on the rapidly developing Chinese economy. These investments
contributed strongly to overall performance.
The Dreyfus Global Growth Fund also held investments in Mexico, Indonesia
and Singapore that contributed positively to Fund performance for the year,
while Thailand and the Philippines lagged.
Half a world away in Latin America your Fund had investments in that
continent's sleeping giant, Brazil. This huge country of 150 million people
is now two and one half years into a reform process that has seen inflation
fall drastically, the government make substantial progress in attacking the
nation's debt load, and the ongoing privatization of large portions of the
economy previously owned by the central, state and even local governments.
The Brazilian market was an outstanding performer, up 51%, in 1996.
Emerging markets could present a special opportunity to growth-oriented
investors, but we all need to keep in mind that they are riskier and more
volatile than stocks in more mature markets such as Germany, the Netherlands
and the U.S. For this reason valuation levels need to be watched even more
closely than in other areas of the world.
This is my first annual letter to shareholders of Dreyfus Global Growth.
I greatly appreciate your investment in the Fund and will continue to manage
the Fund toward its goal of long-term capital growth.
Sincerely,
[Ron Chapman signature logo]
Ron Chapman
Portfolio Manager
January 17, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. _ Unlike the Fund which may invest
in various types of securities and engage in different investment techniques,
the Morgan Stanley Capital International World Index is an arithmetical
average weighted by market value of the performance of some 1,400 securities
listed on the stock exchanges of the U.S.A., Europe, Canada, Australia, New
Zealand and the Far East. The index is unmanaged and includes net dividends
reinvested.
*** SOURCE: LIPPER ANALYTICAL SERVICES, INC. _ Reflects the reinvestment
of income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
<TABLE>
<CAPTION>
DREYFUS GLOBAL GROWTH FUND DECEMBER 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS GLOBAL GROWTH
FUND AND THE
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX
[Exhibit A:
Dollars
$31,838
Dreyfus Global Growth
Fund
$22,364
Morgan Stanley Capital
International
World Index*
*Source: Lipper Analytical Services, Inc.]
<S> <C> <C> <C>
Average Annual Total Returns
One Year Ended Five Years Ended From Inception (4/10/87)
December 31, 1996 December 31, 1996 to December 31, 1996
____________________ ____________________ ______________________
11.95% 6.61% 12.64%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Global Growth
Fund on 4/10/87 (Inception Date) to a $10,000 investment made in the Morgan
Stanley Capital International World Index on that date. For comparative
purposes, the value of the Index on 3/31/87 is used as the beginning value on
4/10/87. All dividends and capital gain distributions are reinvested.
The Fund's performance shown in the line graph takes into account all
applicable fees and expenses. The Morgan Stanley Capital International World
Index, which is the property of Morgan Stanley & Co. Incorporated, is an
unmanaged index of global stock market performance, including the United
States, Canada, Europe, Australia, New Zealand and the Far East and includes
net dividends reinvested. The Index does not take into account charges, fees
and other expenses. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the
Financial Highlights section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS GLOBAL GROWTH FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1996
Common Stocks_98.1% Shares Value
______ ______
<S> <C> <C> <C>
Brazil_1.5% Centrais Eletricas Santa Catarina (a) 8,000 $ 732,000
Telecomunicacoes Brasileiras SA, A.D.R. 9,400 719,100
______
1,451,100
______
Canada_1.3% Ranger Oil....................... 130,000 1,283,750
______
China_1.6% China Overseas Land & Investment.. 500,000 253,733
China Resources Enterprises............ 200,000 449,932
New World Infrastructure............. (b) 100,000 292,197
Shanghai Industrial Holdings......... (b) 150,000 546,900
______
1,542,762
______
Finland_.6% Cultor Oy, Ser. 1................ 11,000 597,826
______
France_5.6% Elf Aquitaine.................... 7,500 682,514
Generale Des Eaux...................... 10,000 1,238,921
Groupe AB SA, A.D.R.................... 64,000 920,000
Lafarge SA............................. 10,000 599,807
Michelin, Cl. B........................ 20,000 1,079,383
Thomson................................ 25,000 810,693
______
5,331,318
______
Germany_.9% Continental AG.................. 43,000 772,939
Henkel KGaA............................ 2,500 119,727
______
892,666
______
Hong Kong_7.1% Cheung Kong Holdings.......... 120,000 1,066,649
Guanghan Holdings...................... 276,000 237,300
HKR International...................... 200,000 337,449
HSBC Holdings.......................... 60,000 1,283,858
Henderson Land Development............. 50,000 504,234
Hong Kong & China Gas.................. 300,000 579,869
Hong Kong Telecommunications, A.D.R.... 55,000 893,750
Hutchison Whampoa...................... 75,000 589,081
Hysan Development...................... 190,000 756,609
Hysan Development (warrants)........... 9,500 8,597
Sun Hung Kai Properties................ 45,000 551,263
______
6,808,659
______
Ireland_1.0% Bank of Ireland................. 110,000 1,001,917
______
Italy_3.4% Fiat SPA.......................... 300,000 903,359
Istituto Nazionale delle Assicurazioni. 400,000 526,745
Parmalat Finanziaria SPA............... 1,200,000 1,833,992
______
3,264,096
______
Japan_22.7% Advantest........................ 1,500 70,367
Bank of Tokyo-Mitsubishi............... 30,000 557,235
DDI......................................... 140 926,479
Daikin Industries...................... 120,000 1,067,818
Daiwa Securities....................... 51,000 453,822
DREYFUS GLOBAL GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Common Stocks (continued) Shares Value
______ ______
Japan (continued) Eisai...................... 30,000 $ 590,928
Fuji Bank.............................. 23,000 335,809
Fuji Photo Film........................ 23,000 759,049
Industrial Bank of Japan............... 37,000 642,505
Ishikawajima-Harima Heavy Industries... 113,000 502,764
Laox........................................ 36,500 554,989
Maruzen................................ 31,000 299,956
Matsushita Communications Industrial... 33,000 855,291
Matsushita Kotobuki Electric Industrial 25,000 652,267
Minebea................................ 120,000 1,003,542
Mitsubishi Heavy Industries............ 62,000 492,786
Mitusi & Co............................ 94,000 763,369
NKK......................................... (b) 171,000 385,580
Namco.................................. 20,000 613,390
Nichiei..................................... 15,000 1,107,975
Nitto Electric Works................... 73,000 1,236,172
Rohm........................................ 13,000 853,563
Sankyo................................. 30,000 850,107
Sekisui House.......................... 70,000 713,606
Shiseido............................... 80,000 926,133
Sony........................................ 13,000 852,440
Sumitomo Bank.......................... 25,000 360,691
TDK......................................... 14,000 913,174
Takashimaya............................ 64,000 768,552
Tokyo Style............................ 55,000 769,762
Toyota Motor........................... 33,000 949,373
______
21,829,494
______
Malaysia_3.5% Commerce Asset Holding Berhad.. 40,000 300,930
DCB Holdings Berhad.................... 75,000 256,879
KFC Holdings Berhad.................... 125,000 514,749
Road Builder Holdings Berhad........... 50,000 283,112
Tenaga Nasional Berhad................. 415,000 1,988,319
______
3,343,989
______
Mexico_0% Grupo Financiero, Cl. B............ 2,407 8,211
______
Netherlands_4.9% Goudsmit NV................. 6,000 534,567
Philips Electronics.................... 23,000 931,443
PolyGram NV............................ 20,000 1,018,223
Schlumberger........................... 10,000 998,750
Vnu-Vernigde Nederlandse Uitgeversbedrijven
Verenigd Bezit....................... 60,000 1,253,109
______
4,736,092
______
Norway_.6% Schibsted ASA..................... 30,000 553,201
______
Philippines_1.0% Ayala Land.................. 262,500 299,429
Filinvest Land....................... (b) 500,000 155,893
DREYFUS GLOBAL GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Common Stocks (continued) Shares Value
______ ______
DREYFUS GLOBAL GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Common Stocks (continued) Shares Value
______ ______
Philippines (continued) Manila Electric, Cl. B 45,500 $ 371,958
Pilipino Telephone................... (b) 200,000 169,201
______
996,481
______
Portugal_.9% Cimpor Cimentos de Portugal..... 38,000 817,557
______
Sweden_1.9% Garphyttan Industrier AB......... 65,700 854,868
Skandia Group Forsakrings AB........... 34,000 959,356
______
1,814,224
______
Switzerland_1.9% Elektrowatt AG, Cl. B....... 1,400 556,243
Novartis AG.......................... (b) 1,100 1,257,025
______
1,813,268
______
United Kingdom_10.5% British Sky Broadcasting Group PLC 190,000 1,704,965
Grand Metropolitan PLC................. 205,000 1,614,887
Great Universal Stores PLC............. 100,000 1,048,050
Lucas Varity PLC....................... 26,500 1,007,000
Misys PLC.............................. 6,900 131,278
Serco Group PLC........................ 13,600 156,741
Telewest PLC......................... (b) 300,000 642,187
Thistle Hotels......................... 430,000 1,336,520
Vodafone Group PLC................... (b) 580,000 2,453,327
______
10,094,955
______
United States_27.2% AT&T..................... 15,000 652,500
AlliedSignal........................... 18,800 1,259,600
America Online....................... (b) 20,000 665,000
American Home Products................. 14,000 820,750
Cabletron Systems...................... 42,000 1,396,500
Chubb....................................... 20,000 1,075,000
Cisco Systems.......................... 15,000 954,375
Culligan Water Technologies.......... (b) 25,000 1,012,500
Digital Equipment.................... (b) 20,000 727,500
Disney (Walt).......................... 20,000 1,392,500
Host Marriott........................ (b) 50,000 800,000
Landstar Systems..................... (b) 60,000 1,395,000
Lucent Technologies.................... 4,861 224,821
Lyondell Petrochemical................. 50,000 1,100,000
McDonald's............................. 20,000 905,000
Mead........................................ 18,000 1,046,250
Millipore.............................. 25,000 1,034,375
Monsanto............................... 25,000 971,875
Murphy Oil............................. 20,000 1,112,500
Parker-Hannifin........................ 15,000 581,250
Seagate Technology................... (b) 20,000 790,000
Sears, Roebuck & Co.................... 35,000 1,614,375
Talbots..................................... 45,000 1,288,125
Warner-Lambert......................... 16,000 1,200,000
DREYFUS GLOBAL GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Common Stocks (continued) Shares Value
______ ______
United States (continued) Westinghouse Electric 60,000 $ 1,192,500
Witco....................................... 30,000 915,000
______
26,127,296
______
TOTAL COMMON STOCKS
(cost $89,537,335)................... $94,308,862
======
Preferred Stocks_1.2%
Brazil_.5% Telecomunicacoes do Rio de Janerio SA (b) 3,800,000 $ 480,906
Germany_.7% Henkel KGaA...................... 14,500 727,352
______
TOTAL PREFERRED STOCKS
(cost $973,016)...................... $ 1,208,258
======
Principal
Short-Term Investments_3.3% Amount
______
U.S. Treasury Bills: 4.95%, 3/6/1997......... $ 2,557,000 $ 2,534,447
4.91%, 3/13/1997....................... 605,000 599,077
______
TOTAL SHORT-TERM INVESTMENTS
(cost $3,133,640).................... $ 3,133,524
======
TOTAL INVESTMENTS (cost $93,643,991)........................................ 102.6% $98,650,644
====== ======
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (2.6%) $ (2,474,397)
====== ======
NET ASSETS.................................................................. 100.0% $96,176,247
====== ======
Notes to Statement of Investments:
(a) Security exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1996, this security amounted to $732,000 or .76% of net assets.
(b) Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS GLOBAL GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
Cost Value
______ ______
ASSETS: Investments in securities_See Statement of Investments $93,643,991 $98,650,644
Cash....................................... 97,345
Dividends receivable....................... 168,641
Prepaid expenses........................... 10,475
______
98,927,105
______
LIABILITIES: Due to The Dreyfus Corporation and affiliates 86,955
Due to Distributor......................... 1,797
Payable for investment securities purchased 2,296,015
Net unrealized depreciation on forward
currency exchange contracts_Note 4(a).... 222,745
Payable for shares of Beneficial Interest redeemed 23,310
Accrued expenses........................... 120,036
______
2,750,858
______
NET ASSETS.................................................................. $96,176,247
======
REPRESENTED BY: Paid-in capital............................ $92,182,380
Accumulated distributions in excess of
investment income_net.................... (134,021)
Accumulated net realized gain (loss) on investments,
forward currency exchange contracts
and foreign currency transactions........ (655,599)
Accumulated net unrealized appreciation (depreciation)
on investments, forward currency exchange contracts
and foreign currency transactions........ 4,783,487
______
NET ASSETS.................................................................. $96,176,247
======
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest
authorized) ........................................... 2,778,227
NET ASSET VALUE, offering and redemption price per share.................... $34.62
===
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS GLOBAL GROWTH FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME
INCOME: Cash dividends (net of $156,102 foreign taxes
withheld at source).................... $ 1,617,547
Interest................................... 351,921
______
Total Income......................... $1,969,468
EXPENSES: Management fee_Note 3(a)................... 778,330
Shareholder servicing costs_Note 3(b)...... 376,350
Custodian fees............................. 110,150
Professional fees.......................... 93,758
Trustees' fees and expenses_Note 3(c)...... 35,689
Prospectus and shareholders' reports....... 25,451
Registration fees.......................... 14,933
Interest expense_Note 2.................... 3,453
Miscellaneous.............................. 4,089
______
Total Expenses....................... 1,442,203
______
INVESTMENT INCOME_NET....................................................... 527,265
______
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments and
foreign currency transactions.......... $13,179,678
Net realized gain (loss) on forward currency
exchange contracts
Short transactions..................... 1,356,001
Net realized gain (loss) on financial futures 430,418
______
Net Realized Gain (Loss)............... 14,966,097
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions [including ($282,246)
net unrealized (depreciation) on financial futures] (3,697,427)
______
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 11,268,670
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $11,795,935
======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GLOBAL GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1996 December 31, 1995
__________________ __________________
<S> <C> <C>
OPERATIONS:
Investment income_net............................................... $ 527,265 $ 1,023,867
Net realized gain (loss) on investments............................. 14,966,097 5,290,747
Net unrealized appreciation (depreciation) on investments........... (3,697,427) 7,171,308
______ ______
Net Increase (Decrease) in Net Assets Resulting from Operations... 11,795,935 13,485,922
______ ______
DIVIDENDS TO SHAREHOLDERS:
From investment income_net.......................................... (439,378) ____
In excess of investment income_net.................................. (134,021) ____
From net realized gain on investments............................... (14,850,060) ____
In excess of net realized gain on investments....................... (655,599) ____
______ ______
Total Dividends................................................... (16,079,058) ____
______ ______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold....................................... 9,280,357 2,940,303
Dividends reinvested................................................ 15,250,877 ____
Cost of shares redeemed............................................. (28,632,556) (45,932,630)
______ ______
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (4,101,322) (42,992,327)
______ ______
Total Increase (Decrease) in Net Assets....................... (8,384,445) (29,506,405)
NET ASSETS:
Beginning of Period................................................. 104,560,692 134,067,097
______ ______
End of Period....................................................... $ 96,176,247 $104,560,692
====== ======
Undistributed investment income (distributions in excess of
investment income)_net....................................................... $ (134,021) $ 7,058,630
______ ______
Shares Shares
______ ______
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 231,324 84,174
Shares issued for dividends reinvested.............................. 443,082 ____
Shares redeemed..................................................... (724,738) (1,319,377)
______ ______
Net Increase (Decrease) in Shares Outstanding..................... (50,332) (1,235,203)
====== ======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS GLOBAL GROWTH FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Year Ended December 31,
______________________________________________________
PER SHARE DATA: 1996 1995 1994 1993 1992
___ ___ ___ ___ ___
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $36.97 $32.99 $35.66 $29.24 $30.06
___ ___ ___ ___ ___
Investment Operations:
Investment income_net........................ .19 1.01 .33 .14 .50(1)
Net realized and unrealized gain (loss)
on investments............................. 4.19 2.97 (3.00) 6.28 (1.32)(1)
___ ___ ___ ___ ___
Total from Investment Operations............. 4.38 3.98 (2.67) 6.42 (.82)
___ ___ ___ ___ ___
Distributions:
Dividends from investment income_net......... (.18) ._ ._ ._ ._
Dividends in excess of investment income_net. (.06) ._ ._ ._ ._
Dividends from net realized gain on investments (6.22) . _ ._ ._ ._
Dividends in excess of net realized gain on investments (.27) ._ ._ ._ ._
___ ___ ___ ___ ___
Total Distributions.......................... (6.73) ._ ._ ._ ._
___ ___ ___ ___ ___
Net asset value, end of period............... $34.62 $36.97 $32.99 $35.66 $29.24
___ ___ ___ ___ ___
___ ___ ___ ___ ___
TOTAL INVESTMENT RETURN.......................... 11.95% 12.06%(2) (7.49%)(2) 21.96%(2) (2.73%)(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets 1.39% 1.46% 1.40% 1.37% 1.50%(3)
Ratio of interest expense and dividends on
securities sold short to average net assets ._ .01% ._ .13% .11%
Ratio of net investment income
to average net assets...................... .51% .86% .57% .96% 1.67%
Portfolio Turnover Rate...................... 163.12% 225.45% 147.28% 186.97% 439.07%
Average commission rate paid (4)............. $.0263 ._ ._ ._ ._
Net Assets, end of period (000's Omitted).... $96,176 $104,561 $134,067 $159,383 $111,364
(1) Based on an average of shares outstanding at each month end.
(2) Exclusive of sales load.
(3) Net of expenses reimbursed.
(4) For fiscal years beginning January 1, 1996, the Fund is
required to disclose its average commission rate paid per share for
purchases and sales of investment securities.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS GLOBAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Global Growth Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company. The Fund's investment objective is capital
growth. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. Premier
Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the
Fund's shares, which are sold to the public without a sales charge.
On December 15, 1995, the Fund's Trustees approved a change of the Fund's
name, effective on January 1, 1996, from "Dreyfus Global Growth, L.P. (A
Strategic Fund)" to "Dreyfus Global Growth Fund." Effective on January 1,
1996, the Fund was reorganized as a Massachusetts business trust under the
name Dreyfus Global Growth Fund.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Forward currency exchange contracts are
valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in the market
prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amount of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
Dividends in excess of investment income-net result from Federal income
tax distribution requirements, primarily from foreign currency transactions.
Dividends in excess of net realized gains for financial statement purposes
result from Federal income tax distribution requirements, primarily losses
from securities transactions incurred during the period ended December 31,
1996, which are stated for Federal income tax purposes as arising in 1997.
DREYFUS GLOBAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Prior to January 1, 1996, the Fund was a limited partnership and was not
required to distribute net investment income or
realized capital gains to avoid Federal income and excise taxes. Prior years'
net investment income and realized gains and losses had been allocated to
shareholders and not paid, in accordance with the limited partnership
structure. This resulted in a difference between financial reporting purposes
versus Federal income tax purposes, with respect to the treatment of such
allocated net investment income and realized gains and losses. The Fund has
therefore reclassified $23,644,726 from accumulated net realized gains on
investments and $7,058,630 from undistributed investment income-net to
paid-in capital. During the year ended December 31, 1996, the Fund
reclassified $87,887 from undistributed net investment income to
undistributed net realized gains. These reclassifications had no effect on
net investment income, net realized gains and net assets.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2_BANK LINE OF CREDIT:
In accordance with an agreement with a bank, the Fund may borrow up to
the $10 million under a short-term unsecured line of credit. Interest on
borrowings is charged at rates which are related to the Federal Funds rate in
effect from time to time. At December 31, 1996, there were no outstanding
borrowings under the line of credit.
The average daily amount of short-term debt outstanding during the period
ended December 31, 1996 was $59,126, with a related weighted average
annualized interest rate of 5.84%. The maximum amount borrowed at any time
during the period ended December 31, 1996 was $2,760,000.
NOTE 3_MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the value
of the Fund's average daily net assets and is payable monthly.
(b) The Fund adopted a Shareholder Services Plan, pursuant to which it
pays the Distributor for the provision of certain services to Fund
shareholders a fee at the annual rate of .25 of 1% of the value of the Fund's
average daily net assets. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. The Distributor may make
payments to Service Agents (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
December 31, 1996, the Fund was charged $259,443 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $78,373 during the period ended December 31, 1996.
(c) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Trustee Emeritus receives 50% of such compensation.
NOTE 4_SECURITIES TRANSACTIONS:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and forward currency exchange contracts,
during the period ended December 31, 1996 amounted to $158,544,934 and
$173,876,345, respectively.
<TABLE>
<CAPTION>
DREYFUS GLOBAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In addition, the following summarizes open forward currency exchange contracts at December 31, 1996:
Foreign Unrealized
Currency Appreciation
Forward Currency Sales Contracts Amount Proceeds Value (Depreciation)
______________________________ _____________ __________ ___________ _______________
<S> <C> <C> <C> <C>
British Pounds, expiring 3/10/97.... 1,600,000 $2,584,480 $2,736,320 $(151,840)
French Francs, expiring 3/10/97..... 7,500,000 1,429,797 1,450,733 (20,936)
French Francs, expiring 4/7/97...... 7,500,000 1,451,603 ,453,291 (1,688)
Dutch Guilders, expiring 3/10/97.... 2,250,000 1,292,509 1,307,607 (15,098)
Dutch Guilders, expiring 4/7/97..... 2,250,000 1,307,000 1,313,792 (6,792)
German Deutsche Marks, expiring 3/10/97 800,000 515,298 522,057 (6,759)
German Deutsche Marks, expiring 4/7/97 800,000 522,227 523,046 (819)
Italian Lire, expiring 3/10/97...... 1,600,000,000 1,034,795 1,050,696 (15,901)
Italian Lire, expiring 4/7/97....... 1,600,000,000 1,046,435 1,049,593 (3,158)
Swedish Krona, expiring 3/10/97..... 2,200,000 322,903 322,576 327
Swedish Krona, expiring 4/7/97...... 2,200,000 323,054 323,135 (81)
_____
$(222,745)
=====
</TABLE>
The Fund enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. When executing forward currency exchange
contracts, the Fund is obligated to buy or sell a foreign currency at a
specified rate on a certain date in the future. With respect to sales of
forward currency exchange contracts, the Fund would incur a loss if the value
of the contract increases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to
purchases of forward currency exchange contracts, the Fund would incur a loss
if the value of the contract decreases between the date the forward contract
is opened and the date the forward contract is closed. The Fund realizes a
gain if the value of the contract increases between those dates. The Fund is
also exposed to credit risk associated with counter party nonperformance on
these forward currency exchange contracts which is typically limited to the
unrealized gains on such contracts that are recognized in the Statement of
Assets and Liabilities.
The Fund may invest in financial futures contracts in order to gain
exposure to or protect against changes in the market. The Fund is exposed to
market risk as a result of changes in the value of the underlying financial
instruments. Investments in financial futures require the Fund to "mark to
market" on a daily basis, which reflects the change in the market value of
the contracts at the close of each day's trading. Typically, variation margin
payments are received or made to reflect daily unrealized gains or losses.
When the contracts are closed, the Fund recognizes a realized gain or loss.
These investments require initial margin deposits with a custodian, which
consist of cash or cash equivalents, up to approximately 10% of the contract
amount. The amount of these deposits is determined by the exchange or Board
of Trade on which the contract is traded and is subject to change. At
December 31, 1996, there were no financial futures contracts outstanding.
(b) At December 31, 1996, accumulated net unrealized appreciation on
investments and forward currency exchange contracts was $4,783,908,
consisting of $10,254,771 gross unrealized appreciation and $5,470,863 gross
unrealized depreciation.
At December 31, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS GLOBAL GROWTH FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Dreyfus Global Growth Fund
We have audited the accompanying statement of assets and liabilities of
Dreyfus Global Growth Fund, including the statement of investments, as of
December 31, 1996, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in
the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Global Growth Fund at December 31, 1996, the results of
its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally accepted
accounting principles.
[ERNST & YOUNG LLP signature logo]
New York, New York
February 18, 1997
DREYFUS GLOBAL GROWTH FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund elects to provide each
shareholder with their portion of the Fund's foreign taxes paid and the
income sourced from foreign countries. Accordingly, the Fund hereby makes the
following designations regarding its fiscal year ended December 31, 1996:
_the total amount of taxes paid to foreign countries was $156,102.
_the total amount of income sourced to foreign countries was $475,941.
For Federal tax purposes the Fund hereby designates $2.98 per share as a
long-term capital gain distribution of the $6.73 per share paid on December
23, 1996. The Fund also designates 4.02% of the ordinary dividends paid
during the fiscal year ended December 31, 1996 as qualifying for the
corporate dividends received deduction.
[Dreyfus lion "d" logo]
DREYFUS GLOBAL GROWTH FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 033AR9612
[Dreyfus logo]
Global
Growth Fund
Annual Report
December 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
DREYFUS GLOBAL GROWTH FUND AND THE MORGAN STANLEY
CAPITAL INTERNATIONAL WORLD INDEX
EXHIBIT A:
MORGAN STANLEY
CAPITAL
PERIOD DREYFUS GLOBAL INTERNATIONAL
GROWTH FUND WORLD INDEX*
4/10/87 10,000 10,000
12/31/87 13,308 9,483
12/31/88 15,369 11,692
12/31/89 18,600 13,634
12/31/90 19,677 11,313
12/31/91 23,123 13,381
12/31/92 22,492 12,681
12/31/93 27,431 15,535
12/31/94 25,377 16,325
12/31/95 28,438 19,708
12/31/96 31,838 22,364
*Source: Lipper Analytical Services, Inc.
