<PAGE>
Dreyfus
Global
Growth Fund
Annual Report
December 31, 1997
<PAGE>
Dreyfus Global Growth Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report that Dreyfus Global Growth Fund recorded a total
return of 12.27%* for the fiscal year ended December 31, 1997. This compares
with total return of 15.76% for the Morgan Stanley Capital International World
Index which, like the Fund, includes U.S. as well as foreign stocks.**
Asian emerging markets caused turmoil in all of the world's markets during
the second half of 1997. In the semi-annual letter sent out at mid-year I noted
that "I believe the difficult economic transition that many Asian emerging
nations are going through now could last from a few months to several years or
more. As a result, your Fund has only a few, selective investments in Asia now."
This level of caution on these formerly high flying markets proved to be well
founded as currency, economic and market declines swept the region during the
second half of 1997. On the positive side, your Fund's gains during the year
just ended were assisted by a number of issues. U.S. and European markets
enjoyed strong gains again in 1997. Japan, on the other hand, continued to lag.
This Fund's investments in Japan were the major reason it underperformed the
World Index in 1997. Several growth-oriented stocks contributed positively to
returns. Investments in the technology area, including American-based Applied
Materials, Japanese-based Tokyo Electron and Advantest and U.K. software maker
Misys, contributed strongly to performance. Also in the U.K., cellular provider
Vodafone was a standout. Skandia, a Swedish-based financial services company,
highlighted the Nordic portion of the Global Growth Fund. In Germany, consumer
products giant Henkel was a strong performer. Although the stock was brought to
market in an initial public offering by the government late in the year,
Portuguese expressway owner/operator Brisa made an important contribution as
well. Also late in the year, Continental European financial services companies
performed well, particularly those in Italy, Spain and Denmark.
INVESTMENT APPROACH
Our investment process is designed to deliver to investors a well-diversified
portfolio that includes a 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. We address this challenge by evaluating inputs
on growth, valuation, interest rates, liquidity, technical factors and currency
in each of the world's major markets. Our work in these areas is driven by
PC-based tools developed over time. Under ordinary circumstances markets and
industry sectors are overweighted or underweighted relative to the Morgan
Stanley Capital International World Index by no more than 70%, with two
exceptions. First, the two largest markets in the world, the U.S. and Japan,
have a 50%-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 will invest up to 20% percent of its assets in this area when
significant opportunities present themselves.
Our stock selection process is highly disciplined. We 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. Stocks are usually sold when
growth is forecast to fall below Dreyfus' or consensus estimates, our valuation
target is reached or the weighting in that market reduced as a result of an
asset allocation decision.
Foreign currencies are at least partially hedged, where practicable, when we
believe that a given currency has 10% or more downside against the U.S. dollar
over the next 12 to 18 months.
<PAGE>
MARKET OVERVIEW AND CURRENT OUTLOOK
Continental Europe continued to offer a wide range of attractive markets and
stocks. The Continent has experienced solid earnings growth. Somewhat
surprisingly, long-term interest rates actually declined against a backdrop of
rising growth because inflation remained well under 2%. We remain positive on
the longer term direction of Continental European interest rates. From a macro
perspective, liquidity flows have also been a positive factor and appear likely
to remain so for Continental Europe. The term "liquidity flows" describes the
amount of money flowing into or out of a stock market. The government pension
plans that have dominated Continental European retirement planning over the last
50 years have been giving way to private plans, and a substantial portion of the
saving flowing into these plans have flowed into local stock markets. This
relatively new development could be an important short and long-term positive
for Continental European markets.
Our stock selection strategy remains the same. Many of your Fund's European
stocks fall into three areas. First, new companies that are either being spun
out of large companies or made available to investors for the first time through
initial public stock offerings. Such stocks represented about 12.5% of the Fund
at year end 1997. Second, we have positioned your Fund in a way that is intended
to benefit from major structural changes in Europe's economy, particularly in
areas such as personal savings and investing, and technology. Last, many
European investments undertaken by the Global Growth Fund are in mature
companies that have initiated restructuring programs designed to raise returns
on invested capital. In this latter area the financial services industry
currently merits special attention. Many investors may be aware that U.S.
financial services companies began a massive restructuring/consolidation at the
beginning of the current decade. Since that time this stock group has been one
of the top performers in the S&P 500. A similar trend began in the U.K. several
years later. Restructuring came to a wide range of Continental European
financial services companies only recently and has been gathering momentum. The
Global Growth Fund investment team believes this trend could offer important
investment opportunities for years to come.
Many of our indicators turned neutral-to-negative for U.S. equities months
ago but the market's liquidity and technical readings remained quite strong.
Although earnings growth has been a very important driver for the U.S. market
over the last three years, we believe that the Asian slowdown could contribute
to an interruption of U.S. earnings growth. While a significant correction in
the U.S. market is possible at any time, we remain positive on the market longer
term and would view a correction as an opportunity to review the investment
potential of the larger number of high quality companies based in the U.S. In
the meantime, we believe that there are currently attractive U.S. stocks in the
mid-cap growth area, in some areas of technology and in growth portions of the
health care industry such as biotech.
On the other side of the world Japan's problems continued. After achieving
renown as the best performing major stock market of the 1980s, the market
remained firmly in a bear phase. The latest challenge for the Japanese market is
the crisis afflicting the formerly fast-growing emerging nations to the south of
it in Asia. The Japanese economy's ties to the region are more important than
those of either Europe or the U.S. Little or no earnings growth is expected by
us in the current year, and sentiment and liquidity remain very poor.
Nevertheless, we believe there are two positives about the market. First, many
stocks on the main Japanese exchange, the Nikkei, have become quite cheap by
several measures. Second, a few observers take the view that the effects of the
Asian crisis are pressing Japanese government and business leaders to undertake
reforms that are probably necessary to turn the market around. These include
changes in the banking system, including stricter credit standards, more
transparency of results and balance sheets, and the "freedom to fail" that is so
critical to pricing risk. On the company level, most Japanese companies remain
many years behind U.S. and European
<PAGE>
companies in developing higher returns on capital, tighter balance sheet
management, and the accountability to shareholders that seems to have had such
a positive influence on other markets in the world over the last 20 years. On
the negative side, we continue to caution that this development will be slow.
On the other hand, we believe that expectations are extremely low on the part
of both Japanese and international investors. This condition creates the
potential for positive developments in 1998. In the meantime, the Global Growth
Fund continues to invest in companies whose prospects meet our criteria for
growth and diversification.
Throughout the late 1980s and the first half of the 1990s Asian emerging
markets captivated many investors, economists and even politicians as models to
emulate. After years of success that dramatically raised local living standards,
Asian markets succumbed to a set of excesses unique to their brand of
capitalism. Over the last two years unproductive bank lending, overinvestment,
political favoritism and declining competitiveness versus other emerging
countries have humbled these markets. The scale of the decline is only suggested
by the graph below illustrating the 1997 decline in these markets. When one
considers that all of these markets had already declined substantially from
their highs of several years ago, and that the currencies of these nations have
also fallen dramatically, the scope of the crisis begins to come into focus.
Asian Emerging Markets
Index Levels
12/31/96 12/31/97
Malaysia 1230 571
Thailand 803 372
Korea 653 386
Indonesia 683 410
Source: Bloomberg Analytical Services. Indexes measured in local currencies.
This chart is for illustrative purposes only and is not a projection or
guarantee of future growth of Asian markets or fund performance.
<PAGE>
As mentioned at the beginning of this letter, your Fund escaped the direct
effects of problems afflicting Asian emerging markets. Now the question becomes
one of whether, and at what time and price, investment in these former champions
becomes attractive once again. The Global Growth investment team's research in
the region leads us to the following current conclusions. First, the worst
damage has most likely already been done to the currencies and stock markets of
these countries. Second, some, but probably not all, of these former "tigers"
could return to a strong growth path in the future. Third, these markets will
probably remain volatile for much of 1998. We will continue to conduct research
and visit companies to uncover opportunities.
I look forward to reporting the progress of this work in the semi-annual
letter this summer.
Sincerely,
/s/RON CHAPMAN
Ron Chapman
Portfolio Manager
January 20, 1998
New York, N.Y.
* Total return includes reinvestments 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., Europe, Canada,
Australia, New Zealand and the Far East. The index is unmanaged and
includes net dividends reinvested.
<PAGE>
Dreyfus Global Growth Fund December 31, 1997
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS GLOBAL GROWTH
FUND AND THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX
Dollars
$35,742
Dreyfus
Global Growth Fund
$25,889
Morgan Stanley
Capital International
World Index*
[GRAPH INSERTED HERE]
*Source: Lipper Analytical Services, Inc.
Average Annual Total Returns
- --------------------------------------------------------------------------------
One Year Ended Five Years Ended Ten Years Ended From Inception (4/10/87)
December 31, 1997 December 31, 1997 December 31, 1997 to December 31, 1997
- ----------------- ----------------- ----------------- ------------------------
12.27% 9.71% 10.38% 12.60%
- ----------
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>
<PAGE>
Dreyfus Global Growth Fund
- --------------------------------------------------------------------------------
Statement of Investments December 31, 1997
Common Stocks--90.4% Shares Value
- ----------------------------------------------------------------------------- ----------- ------------
<S> <C> <C> <C>
Austria--.6% Wolford....................................... 8,500 $ 514,764
-----------
Brazil--.8% Compania de Saneamento
Basico do Estado de Sao Paolo.............. 3,000,000 712,301
-----------
Chile--1.0% Empresa Nacional Electricidad, A.D.R.......... 40,000 707,500
Quinenco, A.D.R............................... 16,700 192,050
-----------
899,550
-----------
Denmark--1.5% BG Bank....................................... 13,000 874,647
Den Danske Bank............................... 4,000 532,990
-----------
1,407,637
-----------
Finland--1.3% Merita Ltd, Cl. A............................. 220,000 1,202,715
-----------
France--6.6% Banque Nationale de Paris..................... 37,500 1,993,229
Bouygues Offshore............................. 10,000 418,875
Elf Aquitaine................................. 7,500 872,310
Generale Des Eaux............................. 7,000 976,987
Generale Des Eaux (Warrants).................. 7,000 4,757
Groupe AB, A.D.S...........................(a) 64,000 412,000
Rhone-Poulenc................................. 20,000 895,904
Rhone-Poulenc, A.D.R.......................(a) 11,000 488,125
-----------
6,062,187
-----------
Germany--5.7% Adidas........................................ 7,000 920,622
Allianz....................................... 5,300 1,372,873
Daimler Benz.................................. 7,000 491,050
Deutsche Bank................................. 16,000 1,129,516
GEA........................................... 2,200 831,573
Henkel........................................ 2,500 140,355
Metro......................................... 10,200 365,703
-----------
5,251,692
-----------
Ireland--1.3% Bank of Ireland............................... 75,000 1,155,007
-----------
Italy--5.0% Assicurazioni Generali........................ 30,000 738,230
Fiat.......................................... 330,000 957,167
Instituto Bancario San Paolo di Torino........ 85,000 816,365
Instituto Mobiliare Italiano.................. 80,000 948,468
Telecom Italia.............................(a) 180,000 1,151,430
------------
4,611,660
------------
Japan--7.3% Aiwa.......................................... 19,000 478,747
Bank of Tokyo-Mitsubishi...................... 25,000 344,642
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Global Growth Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------------- ----------- ------------
<S> <C> <C> <C>
Japan (continued) Canon ........................................ 30,000 $ 698,475
Dai Nippon Printing........................... 24,000 450,333
Daikin Industries............................. 60,000 226,085
Fuji Machine Manufacturing.................... 18,000 434,249
Minolta....................................... 90,000 505,246
Mitsui Fudosan................................ 55,000 530,749
Nintendo...................................... 10,000 987,975
Shimano....................................... 24,000 441,142
Sony.......................................... 4,500 399,785
Uni Charm..................................... 21,000 743,049
Yamanouchi Pharamaceutical.................... 20,000 428,888
-----------
6,669,365
-----------
Netherlands--5.0% ABN Amro Holding.............................. 47,000 915,569
Koninklijke Pakhoed........................... 29,000 836,662
Ordina Beheer................................. 28,000 385,264
Schlumberger.................................. 22,000 1,771,000
Unique International.......................... 30,000 639,147
-----------
4,547,642
-----------
Portugal--3.1% Brisa Auto Estradas........................(a) 45,000 1,611,980
Electricidade de Portugal..................... 62,000 1,173,974
-----------
2,785,954
-----------
Spain--3.9% Aldeasa....................................... 45,000 954,053
Argentaria.................................... 18,000 1,095,241
Banco de Santander............................ 16,000 534,558
Repsol........................................ 24,000 1,023,957
-----------
3,607,809
-----------
Sweden--3.8% Electrolux, Cl. B............................. 17,000 1,179,737
Skandia Group Forsakrings..................... 15,000 707,502
Svenska Handelbanken, Ser. A.................. 18,000 622,300
Volvo, Ser. B................................. 36,000 965,755
-----------
3,475,294
-----------
Switzerland--3.3% Novartis...................................... 550 892,075
Schweizerische Lebensversicherungs-
und Rentenanst............................. 1,500 1,177,456
Union Bank of Switzerland..................(a) 665 961,182
-----------
3,030,713
-----------
Taiwan--.6% Taiwan Semiconductor Manufacturing, A.D.R..... 27,800 505,612
-----------
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Global Growth Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
Common Stocks (continued) Shares Value
- ----------------------------------------------------------------------------- ----------- ------------
<S> <C> <C> <C>
United States--27.5% AT&T.......................................... 37,000 $ 2,266,250
American Home Products........................ 14,000 1,071,000
Applied Materials..........................(a) 39,000 1,174,875
Beverly Enterprises........................(a) 60,000 780,000
Biogen.....................................(a) 60,000 2,182,500
CBS........................................... 30,000 883,125
Chubb......................................... 20,000 1,512,500
Consolidated Stores........................(a) 25,000 1,098,437
Culligan Water Technologies................(a) 25,000 1,256,250
Dean Foods.................................... 42,000 2,499,000
Electronic Arts............................(a) 36,000 1,361,250
First Union................................... 21,000 1,076,250
Fluor......................................... 20,000 747,500
MCI Communications............................ 60,000 2,568,780
Monsanto...................................... 25,000 1,050,000
NationsBank................................... 25,000 1,520,312
PharMerica.................................... 27,306 283,299
3COM.......................................(a) 30,000 1,048,125
Tech Data..................................(a) 21,000 816,375
-----------
25,195,828
-----------
United Kingdom--12.1% Diageo........................................ 102,000 937,358
Gallaher Group................................ 210,000 1,117,557
Granada Group................................. 112,000 1,710,828
JBA Holdings.................................. 50,000 849,993
Misys......................................... 48,857 1,476,556
Powerscreen International..................... 95,000 953,317
Scottish and Newcastle........................ 70,000 857,138
Sema Group.................................... 19,000 461,871
SmithKline Beecham............................ 125,000 1,279,097
Vodafone Group................................ 200,000 1,442,115
-----------
11,085,830
-----------
TOTAL COMMON STOCKS
(cost $74,510,535)......................... $82,721,560
===========
Preferred Stocks--1.0%
- -------------------------------------------------------------------------------
Germany; Henkel
(cost $556,249)............................ 14,500 $ 914,813
===========
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Global Growth Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
Principal
Short-Term Investments--6.4% Amount Value
- ------------------------------------------------------------------------------- ----------- ------------
<S> <C> <C> <C>
U.S. Treasury Bills: 5.16%, 1/22/1998.............................. $5,040,000 $ 5,025,182
5.28%, 2/5/1998............................... 440,000 437,849
5.21%, 3/5/1998............................... 415,000 411,261
-----------
TOTAL SHORT-TERM INVESTMENTS
(cost $5,873,983).......................... $ 5,874,292
===========
TOTAL INVESTMENTS (cost $80,940,767)........................................... 97.8% $89,510,665
====== ===========
CASH AND RECEIVABLES (NET)..................................................... 2.2% $ 1,964,144
====== ===========
NET ASSETS..................................................................... 100.0% $91,474,809
====== ===========
<FN>
Notes to Statement of Investments:
- --------------------------------------------------------------------------------
(a) Non-income producing.
</FN>
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Global Growth Fund
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997
Cost Value
------------ -----------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $80,940,767 $89,510,665
Cash............................................. 1,886,817
Receivable for investment securities sold........ 681,180
Dividends and interest receivable................ 154,802
Prepaid expenses................................. 8,018
-----------
92,241,482
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 62,596
Due to Distributor............................... 19,125
Payable for forward currency exchange contracts.. 528,243
Payable for shares of Beneficial Interest redeemed 37,922
Accrued expenses................................. 118,787
-----------
766,673
-----------
NET ASSETS..................................................................... $91,474,809
===========
REPRESENTED BY: Paid-in capital.................................. $85,932,431
Accumulated undistributed investment income--net. 8,178
Accumulated distributions in excess of net realized gain
(loss) on investments, forward currency exchange
contracts and foreign currency transactions.... (3,030,831)
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 8,565,031
-----------
NET ASSETS..................................................................... $91,474,809
===========
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized). 2,649,659
NET ASSET VALUE, offering and redemption price per share....................... $34.52
======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Global Growth Fund
- --------------------------------------------------------------------------------
Statement of Operations Year Ended December 31, 1997
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME: Cash dividends (net of $129,310 foreign taxes
withheld at source)...................... $1,121,858
Interest................................... 126,749
----------
Total Income.......................... $ 1,248,607
EXPENSES: Management fee--Note 3(a).................. 715,144
Shareholder servicing costs--Note 3(b)..... 348,422
Custodian fees............................. 88,632
Professional fees.......................... 52,922
Trustees' fees and expenses--Note 3(c)..... 35,003
Registration fees.......................... 30,812
Interest expense--Note 2................... 8,243
Prospectus and shareholders' reports....... 5,527
Miscellaneous.............................. 2,565
----------
Total Expenses........................ 1,287,270
-----------
INVESTMENT (LOSS)--NET................................................... (38,663)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and
foreign currency transactions............ $6,607,440
Net realized gain (loss) on forward currency
exchange contracts
Short transactions....................... 1,161,198
----------
Net Realized Gain (Loss).............. 7,768,638
Net unrealized appreciation (depreciation)
on investments and foreign currency
transactions............................. 3,781,544
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 11,550,182
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $11,511,519
===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Global Growth Fund
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Investment income (loss)--net........................................... $ (38,663) $ 527,265
Net realized gain (loss) on investments................................. 7,768,638 14,966,097
Net unrealized appreciation (depreciation) on investments............... 3,781,544 (3,697,427)
------------- ------------
Net Increase (Decrease) in Net Assets Resulting from Operations... 11,511,519 11,795,935
------------- ------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net............................................. (251,558) (439,378)
In excess of investment income--net..................................... -- (134,021)
From net realized gain on investments................................... (6,680,619) (14,850,060)
In excess of net realized gain on investments........................... (3,030,831) (655,599)
------------- ------------
Total Dividends................................................... (9,963,008) (16,079,058)
------------- ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................... 89,828,509 9,280,357
Dividends reinvested.................................................... 9,578,154 15,250,877
Cost of shares redeemed................................................. (105,656,612) (28,632,556)
------------- ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (6,249,949) (4,101,322)
------------- ------------
Total Increase (Decrease) in Net Assets........................ (4,701,438) (8,384,445)
NET ASSETS:
Beginning of Period..................................................... 96,176,247 104,560,692
------------- ------------
End of Period........................................................... $ 91,474,809 $ 96,176,247
============= ============
Undistributed investment income (Distributions in excess of investment income)--net $ 8,178 $ (134,021)
------------- ------------
Shares Shares
------------- ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 2,304,373 231,324
Shares issued for dividends reinvested.................................. 281,514 443,082
Shares redeemed......................................................... (2,714,455) (724,738)
------------- ------------
Net Increase (Decrease) in Shares Outstanding..................... (128,568) (50,332)
============= ============
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $34.62 $36.97 $32.99 $35.66 $29.24
------ ------ ------ ------ ------
Investment Operations:
Investment income (loss)--net..................... (.01) .19 1.01 .33 .14
Net realized and unrealized gain (loss) on investments 4.19 4.19 2.97 (3.00) 6.28
------ ------ ------ ------ ------
Total from Investment Operations.................. 4.18 4.38 3.98 (2.67) 6.42
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net............. (.11) (.18) -- -- --
Dividends in excess of investment income--net..... -- (.06) -- -- --
Dividends from net realized gain on investments... (2.87) (6.22) -- -- --
Dividends in excess of net realized gain on investments (1.30) (.27) -- -- --
------ ------ ------ ------ ------
Total Distributions............................... (4.28) (6.73) -- -- --
------ ------ ------ ------ ------
Net asset value, end of period.................... $34.52 $34.62 $36.97 $32.99 $35.66
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN.............................. 12.27% 11.95% 12.06%(1) (7.49%)(1) 21.96%(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets. 1.34% 1.39% 1.46% 1.40% 1.37%
Ratio of interest expense and dividends on securities
sold short to average net assets............... .01% -- .01% -- .13%
Ratio of net investment income (loss) to average
net assets..................................... (.04%) .51% .86% .57% .96%
Portfolio Turnover Rate........................... 145.59% 163.12% 225.45% 147.28% 186.97%
Average commission rate paid(2)................... $.0256 $.0263 -- -- --
Net Assets, end of period (000's Omitted)......... $91,475 $96,176 $104,561 $134,067 $159,383
<FN>
- --------------
(1) Exclusive of sales load.
(2) 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.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
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") is the distributor of the Fund's shares, which are sold to the
public without a sales charge.
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 and 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. Dividends in excess of net realized
gains for financial statement purposes result from Federal income tax
distribution requirements. To the extent that net realized capital gain can be
offset by capital loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.
(e) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
During the year ended December 31, 1997, the Fund reclassified $432,420 from
accumulated net realized gain on investments to undistributed net investment
income. This reclassification was the result of permanent book to tax
differences, primarily from foreign currency transactions and passive foreign
investment companies. The results of operations and net assets were not
affected by the reclassification.
<PAGE>
Dreyfus Global Growth Fund
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NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2--Bank Line of Credit:
In accordance with an agreement with a bank, the Fund may borrow up to $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.
The average daily amount of borrowings outstanding during the period ended
December 31, 1997 was approximately $124,000 with a related weighted average
annualized interest rate of 6.66%.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management 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) Under the Shareholder Services Plan the Fund pays the Distributor for the
provision of certain services at an 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, 1997, the Fund was charged $238,381 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. During the period
ended December 31, 1997, the Fund was charged $68,640 pursuant to the transfer
agency agreement.
(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, 1997 amounted to $134,159,036 and $156,211,022,
respectively.
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 gain on each open
contract. At December 31, 1997, there were no open forward currency exchange
contracts.
(b) At December 31, 1997, accumulated net unrealized appreciation on
investments was $8,569,898, consisting of $13,027,691 gross unrealized
appreciation and $4,457,793 gross unrealized depreciation.
At December 31, 1997, 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).
<PAGE>
Dreyfus Global Growth Fund
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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, 1997, 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 and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1997 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, 1997, 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.
/s/ Ernst & Young LLP
New York, New York
January 30, 1998
<PAGE>
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, 1997:
--the total amount of taxes paid to foreign countries was $129,310.
--the total amount of income sourced from foreign countries was $971,859.
As required by Federal tax law rules, shareholders will receive notification
of their proportionate share of foreign taxes paid and foreign source income for
the 1997 calendar year with Form 1099-DIV which will be mailed by January 31,
1998.
For Federal tax purposes the Fund hereby designates $2.495 per share as a
long-term capital gain distribution (of which 41.08% is subject to the 20%
maximum Federal tax rate) of the $4.250 per share paid on December 19, 1997.
The Fund also designates 5.76% of the ordinary dividends paid during the
fiscal year ended December 31, 1997 as qualifying for the corporate dividends
received deduction.
<PAGE>
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. 033AR9712
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
DREYFUS STANLEY
GLOBAL CAPITAL
PERIOD GROWTH INTERNATIONAL
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
12/31/97 35,742 25,889
*Source: Lipper Analytical Services, Inc.
